EXECUTION COPY
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$85,000,000
CREDIT AGREEMENT
AMONG
AXIOHM TRANSACTION SOLUTIONS, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
XXXXXX BROTHERS INC.,
AS ARRANGER
XXXXXX COMMERCIAL PAPER INC.,
AS SYNDICATION AGENT
AND
XXXXXX COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF OCTOBER 2, 1997
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . 25
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . . . 26
2.1 Term Loan Commitments. . . . . . . . . . . . . . . . . . . . . . . 26
2.2 Procedure for Term Loan Borrowing. . . . . . . . . . . . . . . . . 26
2.3 Repayment of Term Loans. . . . . . . . . . . . . . . . . . . . . . 26
2.4 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . 28
2.5 Procedure for Revolving Credit Borrowing . . . . . . . . . . . . . 28
2.6 Repayment of Loans; Evidence of Debt . . . . . . . . . . . . . . . 29
2.7 Commitment Fees, etc. . . . . . . . . . . . . . . . . . . . . . . 29
2.8 Termination or Reduction of Revolving Credit Commitments . . . . . 30
2.9 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . 30
2.10 Mandatory Prepayments and Commitment Reductions. . . . . . . . . . 30
2.11 Conversion and Continuation Options. . . . . . . . . . . . . . . . 31
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches. . . . . 32
2.13 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . 32
2.14 Computation of Interest and Fees . . . . . . . . . . . . . . . . . 33
2.15 Inability to Determine Interest Rate . . . . . . . . . . . . . . . 33
2.16 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . . . . 34
2.17 Requirements of Law. . . . . . . . . . . . . . . . . . . . . . . . 36
2.18 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.19 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.20 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . 39
2.21 Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . 40
2.22 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 3. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . . 40
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.2 Procedure for Issuance of Letter of Credit . . . . . . . . . . . . 41
3.3 Commissions, Fees and Other Charges. . . . . . . . . . . . . . . . 41
3.4 L/C Participations . . . . . . . . . . . . . . . . . . . . . . . . 42
3.5 Reimbursement Obligation of the Borrower . . . . . . . . . . . . . 43
3.6 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . 43
3.7 Letter of Credit Payments. . . . . . . . . . . . . . . . . . . . . 43
3.8 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 44
4.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . 44
4.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . 45
4.4 Corporate Power; Authorization; Enforceable Obligations. . . . . . 45
4.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.6 No Material Litigation . . . . . . . . . . . . . . . . . . . . . . 46
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4.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . 46
4.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . 46
4.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.11 Federal Regulations. . . . . . . . . . . . . . . . . . . . . . . . 47
4.12 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.13 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.14 Investment Company Act; Other Regulations. . . . . . . . . . . . . 48
4.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.16 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.17 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 48
4.18 Accuracy of Information, etc . . . . . . . . . . . . . . . . . . . 49
4.19 Security Documents . . . . . . . . . . . . . . . . . . . . . . . . 50
4.20 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.21 Senior Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 51
4.22 Regulation H . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 51
5.1 Conditions to Initial Extension of Credit. . . . . . . . . . . . . 51
5.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . . 56
SECTION 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 56
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 56
6.2 Certificates; Other Information. . . . . . . . . . . . . . . . . . 57
6.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . 58
6.4 Conduct of Business and Maintenance of Existence, etc. . . . . . . 58
6.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . 58
6.6 Inspection of Property; Books and Records; Discussions . . . . . . 59
6.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . 59
6.9 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . 61
6.10 Additional Collateral, etc . . . . . . . . . . . . . . . . . . . . 61
6.11 Limitation on Designated Senior Debt . . . . . . . . . . . . . . . 63
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 63
7.1 Financial Condition Covenants. . . . . . . . . . . . . . . . . . . 63
7.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . 65
7.3 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . 66
7.4 Limitation on Fundamental Changes. . . . . . . . . . . . . . . . . 68
7.5 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . 68
7.6 Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . 69
7.7 Limitation on Capital Expenditures . . . . . . . . . . . . . . . . 70
7.8 Limitation on Investments, Loans and Advances. . . . . . . . . . . 70
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments or Merger Agreement, etc . . . . . . . . . . . . . . . 71
7.10 Limitation on Transactions with Affiliates . . . . . . . . . . . . 71
7.11 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . . . 71
7.12 Limitation on Changes in Fiscal Periods. . . . . . . . . . . . . . 72
7.13 Limitation on Negative Pledge Clauses. . . . . . . . . . . . . . . 72
7.14 Limitation on Restrictions on Subsidiary Distributions . . . . . . 72
7.15 Limitation on Lines of Business. . . . . . . . . . . . . . . . . . 72
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7.16 Limitation on Activities of the Dardel and Axiohm-Inv. . . . . . . 72
SECTION 8. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9. THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . 76
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . 76
9.4 Reliance by Administrative Agent . . . . . . . . . . . . . . . . . 77
9.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . 77
9.6 Non-Reliance on Agents and Other Lenders . . . . . . . . . . . . . 77
9.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 78
9.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . 78
9.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . . 79
9.10 Authorization to Release Liens . . . . . . . . . . . . . . . . . . 79
9.11 Arranger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 79
10.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . 79
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
10.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . 81
10.4 Survival of Representations and Warranties. . . . . . . . . . . . 81
10.5 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . 81
10.6 Successors and Assigns; Participations and Assignments. . . . . . 82
10.7 Adjustments; Set-off. . . . . . . . . . . . . . . . . . . . . . . 85
10.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 85
10.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . 86
10.13 Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . . 87
10.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . 87
10.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 87
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ANNEXES:
A Pricing Grid
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of XxXxxxxxx, Will & Xxxxx
F-2 Form of Legal Opinion of Xxxxxx, Sonsini, Xxxxxxxx & Xxxxxx
F-3 Form of Legal Opinion of Xxxxxxxxx and May
F-4 Form of Legal Opinion of Gide Loyrette Nouel
F-5 Form of Legal Opinion of Xxxxxx Xxxxxx, Esq.
F-6 Form of Legal Opinion of Xxxxx & Xxxxx
F-7 Form of Legal Opinion of Xxxxxx Xxx, P.C.
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
H Form of Prepayment Option Notice
I Form of Exemption Certificate
J Form of Nantissement de Fonds de Commerce
K-1 Form of Australian Pledge Agreement
K-2 Form of U.K. Pledge Agreement
K-3 Form of French Pledge Agreements
L-1 Form of Notice of Borrowing (Drawings)
L-2 Form of Notice of Borrowing (Conversions)
L-3 Form of Notice of Borrowing (Continuations)
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CREDIT AGREEMENT, dated as of October 2, 1997, among AXIOHM
TRANSACTION SOLUTIONS, INC. (f/k/a DH Technology, Inc.), a California
corporation (the "BORROWER"), the several banks and other financial institutions
or entities from time to time parties to this Agreement (the "LENDERS"), XXXXXX
BROTHERS INC., as arranger, XXXXXX COMMERCIAL PAPER INC., as syndication agent
(in such capacities, the "SYNDICATION AGENT"), and XXXXXX COMMERCIAL PAPER INC.,
as administrative agent (the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, AX Acquisition Corporation ("ACQUISITION CO."), a wholly
owned subsidiary of Axiohm IPB, Inc. ("AXIOHM-IPB"), which is a wholly owned
subsidiary of Axiohm S.A. ("AXIOHM S.A."), made an offer (the "TENDER OFFER") to
purchase up to 7,000,000 (but not fewer than 6,500,000) of the outstanding
shares (the "SHARES") of common stock (which represented approximately 88.0% of
the Shares outstanding as of July 11, 1997), without par value, of the Borrower,
pursuant to an Offer to Purchase dated July 16, 1997 (as amended, supplemented
or otherwise modified from time to time, the "OFFER TO PURCHASE") at a price of
$25.00 per Share;
WHEREAS, the Offer to Purchase was made pursuant to an Agreement and
Plan of Merger dated as of July 14, 1997 (including the schedules thereto, the
"MERGER AGREEMENT") among Axiohm S.A., Acquisition Co. and the Borrower, which
provides that (i) immediately prior to the Merger (as defined below),
Acquisition Co. will offer in an exchange offer made pursuant to an exemption
under the Securities Act of 1933, as amended (the "EXCHANGE OFFER") to (x) the
shareholders of Axiohm S.A. and (y) the shareholders of Dardel Technologies,
S.A., a French corporation ("DARDEL") and a shareholder of Axiohm S.A., the
right to exchange their stock of Axiohm S.A. (or Xxxxxx, as the case may be),
with Acquisition Co. for an aggregate of approximately 5,518,524 of the Shares
acquired by Acquisition Co. in the Tender Offer and an aggregate of
approximately $12,197,900 in cash, (ii) simultaneously with the consummation of
the Exchange Offer, Axiohm-IPB will sell to the Borrower, and the Borrower will
purchase from Axiohm-IPB, all of the outstanding shares of capital stock of
Acquisition Co. in exchange for the assumption by the Borrower, on a joint and
several basis with Acquisition Co. and Axiohm-IPB, of all obligations of Axiohm-
IPB or Acquisition Co. in respect of the $175,000,000 Credit Agreement, dated as
of August 19, 1997, among Axiohm S.A., Axiohm-IPB, Acquisition Co., the lenders
party thereto and Xxxxxx Commercial Paper Inc., as arranger, syndication agent
and administrative agent (the "TENDER FACILITY") and in respect of the Interim
Preferred Stock described below, and (iii) immediately following the events
described in the foregoing clauses (i) and (ii) (collectively, the "PRE-MERGER
TRANSACTIONS"), Acquisition Co. will be merged (the "MERGER") with and into the
Borrower, with the Borrower being the surviving corporation of the Merger;
WHEREAS, (i) to provide a portion of the financing for the Tender
Offer and certain related expenses, (A) Acquisition Co. required the Tender
Facility and (B) Acquisition
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Co. received $24,000,000 as cash equity constituting proceeds of $24,000,000
in liquidation value of preferred stock (the "INTERIM PREFERRED STOCK")
issued by Axiohm-IPB and (ii) to provide a portion of the financing for the
Merger and certain related expenses, the refinancing of certain indebtedness
of the Borrower, the repayment of amounts owing under the Tender Facility and
to provide financing for future working capital and other general corporate
purposes, the Borrower will require at the time of the Merger financing
comprised of senior credit facilities made available pursuant to this
Agreement equal to $85,000,000, comprised of term loan facilities aggregating
$50,000,000 and a $35,000,000 revolving credit facility and $120,000,000 in
proceeds of unsecured senior subordinated notes (as more fully defined
herein, the "SENIOR SUBORDINATED NOTES") issued by the Borrower;
WHEREAS, after giving effect to the Pre-Merger Transactions and the
Merger, (i) the Borrower will succeed to all rights and obligations of
Acquisition Co., (ii) Dardel will be a wholly owned Subsidiary of the Borrower,
(iii) 100% of the stock of Axiohm S.A. will be owned either directly by the
Borrower or indirectly by the Borrower through its ownership of Dardel and (iv)
Axiohm-IPB will continue as a wholly owned Subsidiary of Axiohm S.A.; and
WHEREAS, the Lenders are willing to make the senior credit facilities
referred to above available at the time of the Merger upon and subject to the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors
(or persons performing similar functions) of such Person or (b) direct or
cause the direction of the management and policies of such Person, whether
by contract or otherwise.
"AGENTS": the collective reference to the Syndication Agent and the
Administrative Agent.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
3
"APPLICABLE MARGIN": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Base Rate Eurodollar
Loans Loans
--------- ----------
Revolving Credit Loans 1.50% 2.50%
Tranche A Term Loans 1.50% 2.50%
Tranche B Term Loans 2.00% 3.00%
; PROVIDED, that on and after the first Adjustment Date occurring at least
one year after the Merger, the Applicable Margin with respect to Revolving
Credit Loans and Tranche A Term Loans will be determined pursuant to the
Pricing Grid.
"APPLICATION": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter
of Credit.
"ASSET SALE": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (c), (d), (e) or (f) of Section 7.5) which yields gross
proceeds to the Borrower or any of its Subsidiaries (valued at the initial
principal amount thereof in the case of non-cash proceeds consisting of
notes or other debt securities and valued at fair market value in the case
of other non-cash proceeds) in excess of $100,000.
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNMENT AND ACCEPTANCE": as defined in Section 10.6(c).
"ASSIGNOR": as defined in Section 10.6(c).
"AUSTRALIAN PLEDGE AGREEMENT": the Pledge Agreement to be executed
and delivered by the Borrower in favor of the Administrative Agent,
substantially in the form of Exhibit K-1, as the same may be amended,
supplemented or otherwise modified from time to time.
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Revolving Credit
Lender at any time, an amount equal to the excess, if any, of (a) such
Xxxxxx's Revolving Credit Commitment OVER (b) such Xxxxxx's Revolving
Extensions of Credit.
"AXIOHM-IPB": as defined in the recitals hereto.
"AXIOHM-INV": Axiohm Investissements, a Subsidiary of the Borrower
organized in France.
"BASE RATE": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the
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Base CD Rate in effect on such day plus 1% and (c) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof: "PRIME RATE" shall mean the rate of interest per annum publicly
announced from time to time by Xxxxxxxx, N.A. as its prime rate in
effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the
Administrative Agent in connection with extensions of credit to
debtors); "BASE CD RATE" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the C/D Reserve
Percentage and (b) the C/D Assessment Rate; and "THREE-MONTH SECONDARY
CD RATE" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line
of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing
selected by it. Any change in the Base Rate due to a change in the
Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the
effective day of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"BASE RATE LOANS": Loans the rate of interest applicable to which is
based upon the Base Rate.
"BENEFITTED LENDER": as defined in Section 10.7(a).
"BOARD": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"BORROWER": as defined in the preamble hereto.
"BORROWING DATE": any Business Day specified by the Borrower as a
date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BUSINESS": as defined in Section 4.17(b).
"BUSINESS DAY": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the interbank eurodollar
market.
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"CAPITAL EXPENDITURES": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for
the acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which should be
capitalized under GAAP on a consolidated balance sheet of such Person and
its Subsidiaries.
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under
GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such
time determined in accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition;
(b) certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of one year or less from the date
of acquisition issued by any Lender or by any commercial bank organized
under the laws of the United States or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of
an issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P")
or P-2 by Xxxxx'x Investors Service, Inc. ("MOODY'S"), or carrying an
equivalent rating by a nationally recognized rating agency, if both of the
two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within nine months from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by
any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of
which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of one year or less
from the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause (b)
of this definition; or (g) shares of money market mutual or similar funds
which invest at least 95% of their assets in assets satisfying the
requirements of clauses (a) through (f) of this definition.
6
"C/D ASSESSMENT RATE": for any day as applied to any Base Rate Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund maintained by the Federal Deposit
Insurance Corporation (the "FDIC") classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Section 327.4 (or any
successor provision) to the FDIC (or any successor) for the FDIC's (or such
successor's) insuring time deposits at offices of such institution in the
United States.
"C/D RESERVE PERCENTAGE": for any day as applied to any Base Rate
Loan, that percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board, for determining the maximum reserve
requirement for a Depositary Institution (as defined in Regulation D of the
Board as in effect from time to time) in respect of new non-personal time
deposits in Dollars having a maturity of 30 days or more.
"CLOSING DATE": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied, which date shall not occur later
than October 16, 1997.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COMMITMENT": as to any Lender, the sum of the Tranche A Term Loan
Commitment, the Tranche B Term Loan Commitment and the Revolving Credit
Commitment of such Lender.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"CONFIDENTIAL INFORMATION MEMORANDUM": the Confidential Information
Memorandum dated September 1997 and furnished to the Lenders.
"CONSOLIDATED CURRENT ASSETS": at any date, all amounts (other than
cash and Cash Equivalents) which would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on
a consolidated balance sheet of the Borrower and its Subsidiaries at such
date.
"CONSOLIDATED CURRENT LIABILITIES": at any date, all amounts which
would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet
of the Borrower and its Subsidiaries at such date, but excluding (a) the
current portion of any Funded Debt of the Borrower and its
7
Subsidiaries and (b) without duplication of clause (a) above, all
Indebtedness consisting of Revolving Credit Loans to the extent
otherwise included therein.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income for
such period PLUS, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period,
the sum of (a) total income tax expense, (b) interest expense, amortization
or writeoff of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness
(including the Loans), (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary or non-recurring expenses or
losses (including, whether or not otherwise includable as a separate item
in the statement of such Consolidated Net Income for such period, losses on
sales of assets outside of the ordinary course of business), (f) any other
non-cash charges (other than non-cash charges in connection with the
Borrower's use of the LIFO method of inventory accounting) and (g) for the
period from the Closing Date through the end of the 1998 fiscal year, up to
$3 million in the aggregate of transaction expenses and restructuring
charges, and MINUS, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income,
(b) any extraordinary or non-recurring income or gains (including, whether
or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets
outside of the ordinary course of business) and (c) any other non-cash
income, all as determined on a consolidated basis.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period, the ratio
of (a) Consolidated EBITDA for such period less the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such
period on account of Capital Expenditures (excluding the principal amount
of Indebtedness incurred in connection with such expenditures) or taxes to
(b) Consolidated Fixed Charges for such period.
"CONSOLIDATED FIXED CHARGES": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
provision for cash income taxes made by the Borrower or any of its
Subsidiaries on a consolidated basis in respect of such period and (c)
scheduled payments made during such period on account of principal of
Indebtedness (other than Indebtedness of the types described in clauses
(f), (g) and (k) of the definition thereof) of the Borrower or any of its
Subsidiaries (including scheduled principal payments in respect of the Term
Loans).
"CONSOLIDATED INTEREST COVERAGE RATIO": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest
Expense for such period.
"CONSOLIDATED INTEREST EXPENSE": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing
8
and net costs under Interest Rate Protection Agreements to the extent such
net costs are allocable to such period in accordance with GAAP).
"CONSOLIDATED LEVERAGE RATIO": as at the last day of any period of
four consecutive fiscal quarters, the ratio of (a) Consolidated Total Debt
on such day to (b) Consolidated EBITDA for such period; PROVIDED that for
purposes of calculating Consolidated EBITDA of the Borrower and its
Subsidiaries for any period, the Consolidated EBITDA of any Person acquired
by the Borrower or its Subsidiaries during such period shall be included on
a PRO FORMA basis for such period (assuming the consummation of each such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period) if the
consolidated balance sheet of such acquired Person and its consolidated
Subsidiaries as at the end of the period preceding the acquisition of such
Person and the related consolidated statements of income and stockholders'
equity and of cash flows for the period in respect of which Consolidated
EBITDA is to be calculated (i) have been previously provided to the
Administrative Agent and the Lenders and (ii) either (A) have been reported
on without a qualification arising out of the scope of the audit (other
than a "going concern" or like qualification or exception) by independent
certified public accountants of nationally recognized standing or (B) have
been found acceptable by the Administrative Agent.
"CONSOLIDATED NET INCOME": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; PROVIDED that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries, (b) the income
(or deficit) of any Person (other than a Subsidiary of the Borrower) in
which the Borrower or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by
the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"CONSOLIDATED TOTAL DEBT": at any date, the sum of, without
duplication, (a) the aggregate principal amount of all Funded Debt of the
Borrower and its Subsidiaries at such date, determined on a consolidated
basis in accordance with GAAP PLUS (b) all indebtedness of such Person for
borrowed money MINUS (c) the amount of cash held by the Borrower and the
Subsidiary Guarantors in an aggregate amount not to exceed $5,000,000 to
the extent such cash is not subject to a Lien (except in favor of the
Lenders).
"CONSOLIDATED WORKING CAPITAL": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
9
"CONTINUING DIRECTOR": (i) any director of the board of directors of
the Borrower on the Closing Date, (ii) a director whose nomination for
election to the board of directors of the Borrower is recommended by at
least 50% of the then Continuing Directors or (iii) a director elected to
the board of directors of the Borrower with the approval of the holders of
at least 80% of the common stock of the Borrower having voting power for
the election of directors held by the Permitted Investors.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"DARDEL": as defined in the recitals hereto.
"DEFAULT": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DISCLOSURE LETTER": the Disclosure Letter dated as of the date
hereof between the Syndication Agent, the Lenders and the Borrower, as
amended, supplemented or otherwise modified from time to time.
"DISPOSITION": with respect to any Property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "DISPOSE" and "DISPOSED OF" shall have correlative
meanings.
"DOLLARS" and "$": dollars in lawful currency of the United States.
"DOMESTIC SUBSIDIARY": any Subsidiary of any Loan Party organized
under the laws of any jurisdiction within the United States.
"ECF PERCENTAGE": 75%; PROVIDED, that, with respect to each fiscal
year of the Borrower ending on or after December 31, 1997, the ECF
Percentage shall be reduced to 50% if the Consolidated Leverage Ratio as of
the last day of such fiscal year is less than 3.00 to 1.00.
"ENVIRONMENTAL CONSULTANT": as defined in Section 6.8(d).
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses,
registrations, approvals, notifications, exemptions and any other
authorization required under any Environmental Law.
10
"ENVIRONMENTAL PROFESSIONAL": as defined in Section 6.8(c).
"ENVIRONMENTAL PROGRAM": as defined in Section 6.8(c).
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a
member bank of the Federal Reserve System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London
time, two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
Service (or otherwise on such service), the "EURODOLLAR BASE RATE" for
purposes of this definition shall be determined by reference to such other
comparable publicly quoted service for displaying eurodollar rates as may
be reasonably selected by the Administrative Agent or, in the absence of
such availability, by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 11:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency
and exchange operations are then being conducted for delivery on the first
day of such Interest Period for the number of days comprised therein.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
-----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
11
"EVENT OF DEFAULT": any of the events specified in Section 8,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"EXCESS CASH FLOW": for any fiscal year of the Borrower, the excess,
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income
for such fiscal year, (ii) an amount equal to the amount of all non-cash
charges (including depreciation and amortization) deducted in arriving at
such Consolidated Net Income, (iii) decreases in Consolidated Working
Capital for such fiscal year, (iv) an amount equal to the aggregate net
non-cash loss on the Disposition of Property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income and (v) the net increase during such fiscal year
(if any) in deferred tax accounts of the Borrower OVER (b) the sum, without
duplication, of (i) an amount equal to the amount of all non-cash credits
included in arriving at such Consolidated Net Income, (ii) the aggregate
amount actually paid by the Borrower and its Subsidiaries in cash during
such fiscal year on account of Capital Expenditures (excluding the
principal amount of Indebtedness incurred in connection with such
expenditures and any such expenditures financed with the proceeds of any
Reinvestment Deferred Amount), (iii) the aggregate amount of all
prepayments of Revolving Credit Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Credit
Commitments and all optional prepayments of the Term Loans during such
fiscal year, (iv) the aggregate amount of all regularly scheduled principal
payments of Funded Debt (including, without limitation, the Term Loans) of
the Borrower and its Subsidiaries made during such fiscal year (other than
in respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (v) increases in
Consolidated Working Capital for such fiscal year, (vi) an amount equal to
the aggregate net non-cash gain on the Disposition of Property by the
Borrower and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income, and (vii) the net decrease during
such fiscal year (if any) in deferred tax accounts of the Borrower.
"EXCESS CASH FLOW APPLICATION DATE": as defined in Section 2.10(c).
"EXCHANGE OFFER": as defined in the recitals hereto.
"EXCLUDED FOREIGN SUBSIDIARIES": any Foreign Subsidiary the pledge of
all or any part of whose Capital Stock as Collateral would, in the good
faith judgment of the Borrower, result in material adverse tax consequences
to the Borrower, PROVIDED that the term "Foreign Subsidiary" shall not
include any Subsidiary (a) which is properly treated as a partnership or
branch of the Borrower or a Domestic Subsidiary for United States federal
income tax purposes and (b) the pledge of all or any part of whose Capital
Stock as Collateral would not result in material adverse tax consequences
to the Borrower.
"FACILITY": each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder (the "TRANCHE A TERM LOAN FACILITY"),
(b) the Tranche B Term Loan Commitments and the Tranche B Term Loans made
thereunder (the "TRANCHE
12
B TERM LOAN FACILITY") and (c) the Revolving Credit Commitments and the
extensions of credit made thereunder (the "REVOLVING CREDIT FACILITY").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"FRENCH PLEDGE AGREEMENTS": the Pledge Agreements creating a charge
over the stock capital of Axiohm S.A., Xxxxxx and Axiohm Investissements to
be executed and delivered by the Borrower and Xxxxxx in favor of the
Administrative Agent, substantially in the form of Exhibit K-3, as the same
may be amended, supplemented or otherwise modified from time to time.
"FRENCH SECURITY DOCUMENT": the Nantissement de Fonds de Commerce to
be executed and delivered by Axiohm S.A., substantially in the form of
Exhibit J, as the same may be amended, supplemented or otherwise modified
from time to time.
"FOREIGN SUBSIDIARY": any Subsidiary of any Loan Party that is not a
Domestic Subsidiary.
"FUNDED DEBT": as to any Person, all Indebtedness of such Person that
matures more than one year from the date of its creation or matures within
one year from such date but is renewable or extendible, at the option of
such Person, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders
to extend credit during a period of more than one year from such date,
including, without limitation, all current maturities and current sinking
fund payments in respect of such Indebtedness whether or not required to be
paid within one year from the date of its creation and, in the case of the
Borrower, Indebtedness in respect of the Loans.
"FUNDING OFFICE": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time set forth in the opinions and pronouncements
of the Accounting Principles Board and the American Institute of Certified
Public Accountants and the statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity
as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances of the Borrower as of
the date of determination, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the December
31, 1996 audited financial statements of
13
the Borrower delivered pursuant to Section 4.1(c). In the event that
any "Accounting Change" (as defined below) shall occur and such change
results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then the Borrower and the
Administrative Agent agree to enter into negotiations in order to amend
such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for
evaluating the Borrower's financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required
Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting
Changes had not occurred. "Accounting Changes" refers to changes in
accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government (including, without limitation, the National
Association of Insurance Commissioners).
"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "PRIMARY OBLIGATIONS") of any other third Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any Property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person
14
may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum
amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.
"H-S-R ACT": the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976,
as amended.
"INCUR": as defined in Section 7.2.
"INDEBTEDNESS": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of Property or services (other
than current trade payables and accrued current obligations incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to Property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of
such Property), (e) all Capital Lease Obligations of such Person, (f) all
obligations of such Person, contingent or otherwise, as an account party
under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any Capital Stock (other than common
stock) of such Person, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g)
above; (i) all obligations of the kind referred to in clauses (a) through
(h) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on
Property (including, without limitation, accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation, (j) for the purposes of Section
8(e) only, all obligations of such Person in respect of Interest Rate
Protection Agreements and (k) the liquidation value of any preferred
Capital Stock of such Person or of its Subsidiaries held by any Person
other than such Person and its Wholly Owned Subsidiaries. It is understood
and agreed that the amount of any Indebtedness described in clause (i) for
which recourse is limited to certain property of such Person shall be the
lower of (x) the amount of the obligation and (y) the fair market value of
the property of such Person securing such obligation to the extent of
recourse to such property.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
15
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents,
patent licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to sue at law or in equity for any infringement
or other impairment thereof, including the right to receive all proceeds
and damages therefrom.
"INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last
day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three months,
or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest Period and (d) as to any Loan (other than
any Revolving Credit Loan that is a Base Rate Loan), the date of any
repayment or prepayment made in respect thereof.
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of Borrowing
with respect thereto; and (b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent
not less than three Business Days prior to the last day of the then current
Interest Period with respect thereto; PROVIDED that, all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date or beyond the date final payment is
due on the Tranche A Term Loans or the Tranche B Term Loans, as the
case may be, shall end on the Revolving Credit Termination Date or
such due date, as applicable;
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month ending
one, two, three or six months thereafter, as the case may be, as
designated in the relevant Notice of Borrowing; and
16
(iv) the Borrower shall use reasonable efforts to select Interest
Periods so as not to require a payment or prepayment of any Eurodollar
Loan during an Interest Period for such Loan.
"INTEREST RATE PROTECTION AGREEMENT": any interest rate protection
agreement, interest rate futures contract, interest rate option, interest
rate cap or other interest rate hedge arrangement, to or under which the
Borrower or any of its Subsidiaries is a party or a beneficiary on the date
hereof or becomes a party or a beneficiary after the date hereof.
"ISSUING LENDER": one or more Lenders to be selected by the
Syndication Agent and the Borrower (with the consent of such Lender) after
the Syndication Date, in its capacity as issuer of any Letter of Credit.
"L/C COMMITMENT": $7,500,000.
"L/C FEE PAYMENT DATE": the last day of each March, June, September
and December and the last day of the Revolving Credit Commitment Period.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to Section 3.5.
"L/C PARTICIPANTS": the collective reference to all the Revolving
Credit Lenders other than the Issuing Lender.
"LENDERS": as defined in the preamble hereto.
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever, whether or
not filed, recorded or otherwise perfected under applicable law (including,
without limitation, any conditional sale or other title retention agreement
and any capital lease having substantially the same economic effect as any
of the foregoing and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"LOAN": as defined in Section 2.1.
"LOAN DOCUMENTS": this Agreement, the Security Documents, the
Syndication Letter Agreement, the Applications and the Notes.
"LOAN PARTIES": the Borrower and each Subsidiary of the Borrower
which is a party to a Loan Document.
17
"MAJORITY FACILITY LENDERS": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"MAJORITY REVOLVING CREDIT FACILITY LENDERS": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
consummation of the Merger, (b) the business, assets, property or condition
(financial or otherwise) of the Borrower, Axiohm S.A. and their
Subsidiaries taken as a whole or (c) the validity or enforceability of this
Agreement or any of the other Loan Documents or the rights or remedies of
the Agents or the Lenders hereunder or thereunder.
"MATERIAL ENVIRONMENTAL AMOUNT": an amount payable by the Borrower
and/or its Subsidiaries in excess of $1,000,000 per fiscal year for
remedial costs, compliance costs, compensatory damages, punitive damages,
fines, penalties or any combination thereof, in any case pursuant to any
Environmental Law or with respect to any Materials of Environmental
Concern.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MERGER": as defined in the recitals hereto.
"MERGER AGREEMENT": as defined in the recitals hereto.
"MORTGAGED PROPERTIES": the real properties listed on Schedule 1.1B
to the Disclosure Letter, as to which the Administrative Agent for the
benefit of the Lenders shall be granted a Lien pursuant to the Mortgages.
"MORTGAGES": each of the mortgages and deeds of trust made by any
Loan Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Lenders, substantially in the form of Exhibit D (with
such changes thereto as shall be advisable under the law of the
jurisdiction in which such mortgage or deed of trust is to be recorded), as
the same may be amended, supplemented or otherwise modified from time to
time.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
18
"NET CASH PROCEEDS": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees and other professional fees,
amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset which is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document), the amount of such net cash proceeds which are
attributable to (and payable to) minority interests, the amount of any
reserve reasonably maintained by the Borrower and its Subsidiaries with
respect to indemnification obligations owing pursuant to the definitive
documentation pursuant to which the Asset Sale is consummated (with any
unused portion of such reserve to constitute Net Cash Proceeds on the date
upon which the indemnification obligations terminate) and other reasonable
fees and expenses actually incurred in connection therewith and net of
taxes paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax
sharing arrangements) and (b) in connection with any issuance or sale of
equity securities or debt securities or instruments or the incurrence of
loans, the cash proceeds received from such issuance or incurrence, net of
attorneys' fees, investment banking fees, accountants' fees and other
professional fees, underwriting discounts and commissions and other
reasonable fees and expenses actually incurred in connection therewith.
"NON-EXCLUDED TAXES": as defined in Section 2.18(a).
"NON-U.S. LENDER": as defined in Section 2.18(d).
"NOTES": the collective reference to any promissory note evidencing
Loans.
"NOTICE OF BORROWING": (i) with respect to (a) any borrowing of
Loans, a Notice of Borrowing (Drawings), substantially in the form of
Exhibit L-1, (b) any conversion of Loans, a Notice of Borrowing
(Conversions), substantially in the form of Exhibit L-2 and (c) any
continuation of Eurodollar Loans, a Notice of Borrowing (Continuations),
substantially in the form of Exhibit L-3 or (ii) telephonic notice of any
such borrowing, conversion or continuation promptly confirmed in writing
(in a form reasonably acceptable to the Administrative Agent).
"OBLIGATIONS": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender (or, in the case of
Interest Rate Protection Agreements, any affiliate of any Lender), whether
direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise
19
under, out of, or in connection with, this Agreement, any other Loan
Document, the Letters of Credit, any Interest Rate Protection Agreement
entered into with any Lender or any affiliate of any Lender or any other
document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all
fees, charges and disbursements of counsel to the Administrative Agent
or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise.
"OFFER TO PURCHASE": as defined in the recitals hereto.
"OTHER TAXES": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or from the execution, delivery or
enforcement of, or otherwise with respect to, this Agreement.
"PARTICIPANT": as defined in Section 10.6(b).
"PAYMENT OFFICE": the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and
the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED INVESTORS": collectively, Xxxxxx, Messrs. Xxxxxxx Xxxxx,
Xxxxxx Xxxxxx and Xxxxxxx Xxxxx, and Persons under their control (PROVIDED
that for purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise).
"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PRE-MERGER TRANSACTIONS": as defined in the recitals hereto.
"PRICING GRID": the pricing grid attached hereto as Annex A.
"PRO FORMA BALANCE SHEET": as defined in Section 4.1(a).
"PROJECTIONS": as defined in Section 6.2(c).
20
"PROPERTIES": as defined in Section 4.17(a).
"PROPERTY": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"RECOVERY EVENT": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding
relating to any asset (other than inventory) of the Borrower or any of its
Subsidiaries.
"REGISTER": as defined in Section 10.6(d).
"REGULATION G": Regulation G of the Board as in effect from time to
time.
"REGULATION U": Regulation U of the Board as in effect from time to
time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"REINVESTMENT DEFERRED AMOUNT": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of
its Subsidiaries in connection therewith which are not applied to prepay
the Term Loans or reduce the Revolving Credit Commitments pursuant to
Section 2.10(b) as a result of the delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and
that the Borrower (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an
Asset Sale or Recovery Event to acquire assets useful in its business.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire
assets useful in the Borrower's business.
"REINVESTMENT PREPAYMENT DATE": with respect to any Reinvestment
Event, the earlier of (a) the date occurring twelve months after such
Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets useful
in the Borrower's business with all or any portion of the relevant
Reinvestment Deferred Amount.
21
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section
2615.
"REQUIRED LENDERS": the holders of more than 50% of (a) until the
Closing Date, the Commitments and (b) thereafter, the sum of (i) the
aggregate unpaid principal amount of the Term Loans and (ii) the Total
Revolving Credit Commitments or, if the Revolving Credit Commitments have
been terminated, the Total Revolving Extensions of Credit.
"REQUIRED PREPAYMENT LENDERS": the Majority Facility Lenders in
respect of each Facility.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case,
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, president or
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"REVOLVING CREDIT COMMITMENT": as to any Lender, the obligation of
such Lender, if any, to make Revolving Credit Loans and Letters of Credit,
in an aggregate principal and/or face amount not to exceed the amount set
forth under the heading "Revolving Credit Commitment" opposite such
Xxxxxx's name on Schedule 1.1A to the Disclosure Letter or in the
Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original amount of the Total Revolving Credit Commitments is
$35,000,000.
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and including
the Closing Date to the Revolving Credit Termination Date.
"REVOLVING CREDIT LENDER": each Lender which has a Revolving Credit
Commitment or which has made Revolving Credit Loans.
"REVOLVING CREDIT LOANS": as defined in Section 2.4.
"REVOLVING CREDIT NOTE": as defined in Section 2.6(e).
"REVOLVING CREDIT PERCENTAGE": as to any Revolving Credit Lender at
any time, the percentage which such Xxxxxx's Revolving Credit Commitment
then constitutes of the
22
Total Revolving Credit Commitments (or, at any time after the Revolving
Credit Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Xxxxxx's Revolving Credit
Loans then outstanding constitutes of the aggregate principal amount of
the Revolving Credit Loans then outstanding).
"REVOLVING CREDIT TERMINATION DATE": the earlier of (a) the Scheduled
Revolving Credit Termination Date and (b) the date on which all the Term
Loans shall mature or be paid in full.
"REVOLVING EXTENSIONS OF CREDIT": as to any Revolving Credit Lender
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then outstanding
and (b) such Xxxxxx's Revolving Credit Percentage of the L/C Obligations
then outstanding.
"SCHEDULED REVOLVING CREDIT TERMINATION DATE": October 2, 2002.
"SEC": the Securities and Exchange Commission (or successors thereto
or an analogous Governmental Authority).
"SECURITY DOCUMENTS": the collective reference to the Guarantee and
Collateral Agreement, the Mortgages, the Australian Pledge Agreement, the
French Pledge Agreements and the U.K. Pledge Agreement, the French Security
Document and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any Property of any Person to
secure the obligations and liabilities of any Loan Party under any Loan
Document.
"SENIOR SUBORDINATED NOTE INDENTURE": the Indenture entered into by
the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes, together with all instruments
and other agreements entered into by the Borrower and certain of its
Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
Section 7.9.
"SENIOR SUBORDINATED NOTES": the unsecured senior subordinated notes
of the Borrower issued on the Closing Date pursuant to the Senior
Subordinated Note Indenture, and unsecured senior subordinated notes of the
Borrower registered under the Securities Act of 1933, as amended, with
terms identical in all material respects to those issued on the Closing
Date.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise", as of
such date, as such value is established and such liabilities
23
are evaluated in accordance with Section 101(32) of the federal
Bankruptcy Code and the state laws governing determinations of the
insolvency of debtors of New York and each state where such Person is
doing business or has its principal place of business, (b) the present
fair saleable value of the tangible and intangible assets of such Person
will, as of such date, be greater than the amount that will be required
to pay the liability of such Person on its debts as such debts become
absolute and matured, (c) such Person will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business,
and (d) such Person will be able to pay its debts as they mature. For
purposes of this definition, (i) "debt" means liability on a "claim" and
(ii) "claim" means any (x) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"SUBSIDIARY": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"SUBSIDIARY GUARANTOR": each Subsidiary of the Borrower (other than
any Excluded Foreign Subsidiary) that guarantees the Obligations pursuant
to the Guarantee and Collateral Agreement.
"SYNDICATION DATE": the date on which the Syndication Agent completes
the syndication of the Facilities and the entities selected in such
syndication process become parties to this Agreement, which date shall be
no later than October 31, 1997.
"SYNDICATION LETTER AGREEMENT": the letter agreement, dated as of the
date hereof, between the Borrower and the Syndication Agent relating to the
syndication of the Facilities.
"TENDER FACILITY": as defined in the recitals hereto.
"TENDER OFFER": as defined in the recitals hereto.
"TERM LOAN LENDERS": the collective reference to the Tranche A Term
Loan Lenders and the Tranche B Term Loan Lenders.
24
"TERM LOANS": the collective reference to the Tranche A Term Loans
and Tranche B Term Loans.
"TERM NOTE": as defined in Section 2.6(e).
"TOTAL REVOLVING CREDIT COMMITMENTS": at any time, the aggregate
amount of the Revolving Credit Commitments at such time.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders at such time.
"TRANCHE A TERM LOAN": as defined in Section 2.1.
"TRANCHE A TERM LOAN COMMITMENT": as to any Lender, the obligation of
such Lender, if any, to make a Tranche A Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth under
the heading "Tranche A Term Loan Commitment" opposite such Xxxxxx's name on
Schedule 1.1A to the Disclosure Letter or in the Assignment and Acceptance
pursuant to which such Lender became a party hereto. The original
aggregate amount of the Tranche A Term Loan Commitments is $35,000,000.
"TRANCHE A TERM LOAN LENDER": each Lender which has a Tranche A Term
Loan Commitment or which has made a Tranche A Term Loan.
"TRANCHE A TERM LOAN PERCENTAGE": as to Tranche A Term Loan Lender at
any time, the percentage which such Xxxxxx's Tranche A Term Loan Commitment
then constitutes of the aggregate Tranche A Term Loan Commitments (or, at
any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender's Tranche A Term Loans then outstanding
constitutes of the aggregate principal amount of the Tranche A Term Loans
then outstanding).
"TRANCHE B TERM LOAN": as defined in Section 2.1.
"TRANCHE B TERM LOAN COMMITMENT": as to Tranche B Term Loan Lender,
the obligation of such Lender, if any, to make a Tranche B Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche B Term Loan Commitment" opposite such Xxxxxx's
name on Schedule 1.1A or in the Assignment and Acceptance pursuant to which
such Lender became a party hereto. The original aggregate amount of the
Tranche B Term Loan Commitments is $15,000,000.
"TRANCHE B TERM LOAN LENDER": each Lender which has a Tranche B Term
Loan Commitment or which has made a Tranche B Term Loan.
"TRANCHE B TERM LOAN PERCENTAGE": as to any Lender at any time, the
percentage which such Xxxxxx's Tranche B Term Loan Commitment then
constitutes of the aggregate
25
Tranche B Term Loan Commitments (or, at any time after the Closing Date,
the percentage which the aggregate principal amount of such Lender's
Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"TRANSACTION DOCUMENTATION": collectively, the Merger Agreement, the
Offer to Purchase (including all documents and materials filed with the SEC
in connection therewith), the Senior Subordinated Note Indenture and all
documentation executed in connection with the Exchange Offer and the other
transactions contemplated hereby, in each case, including all schedules,
exhibits, certificates, documents and agreements entered into, executed or
delivered in connection therewith, and as each such agreement, filing,
schedule, exhibit, certificate or document may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.9.
"TRANSFEREE": as defined in Section 10.15.
"TYPE": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"U.K. PLEDGE AGREEMENT": the Pledge Agreement to be executed and
delivered by the Borrower in favor of the Administrative Agent,
substantially in the form of Exhibit K-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication
No. 500, as the same may be amended from time to time.
"UNITED STATES": the United States of America.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, Section and Exhibit
references are to this Agreement unless otherwise specified, and Schedule
references are to the Disclosure Letter unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
26
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 TERM LOAN COMMITMENTS. Subject to the terms and conditions
hereof, (a) each Tranche A Term Loan Lender severally agrees to make a term loan
(a "TRANCHE A TERM LOAN") to the Borrower on the Closing Date in an amount not
to exceed the amount of the Tranche A Term Loan Commitment of such Lender and
(b) each Tranche B Term Loan Lender severally agrees to make a term loan (a
"TRANCHE B TERM LOAN") to the Borrower on the Closing Date in an amount not to
exceed the amount of the Tranche B Term Loan Commitment of such Lender. The
Term Loans may from time to time be Eurodollar Loans or Base Rate Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.13.
2.2 PROCEDURE FOR TERM LOAN BORROWING. The Borrower shall give the
Administrative Agent irrevocable Notice of Borrowing (which notice must be
received by the Administrative Agent prior to 10:00 A.M., New York City time,
one Business Day prior to the anticipated Closing Date) requesting that the Term
Loan Lenders make the Term Loans on the Closing Date and specifying the amount
to be borrowed. The Term Loans made on the Closing Date shall initially be Base
Rate Loans or Eurodollar Loans (if prior to the time the Borrower gives the
Administrative Agent notice in accordance with this Section 2.2, the Borrower
shall have executed an indemnity agreement in form and substance satisfactory to
the Syndication Agent) and no Term Loan may be converted into or continued as a
Eurodollar Loan having an Interest Period in excess of one month prior to the
Syndication Date; PROVIDED that the Eurodollar Rate shall be redetermined as of
the Syndication Date (based on the Interest Period selected by the Borrower and
communicated to the Administrative Agent in accordance with the terms hereof)
and such redetermined Eurodollar Rate shall apply to all Eurodollar Loans
outstanding as of the Syndication Date. Upon receipt of such notice the
Administrative Agent shall promptly notify each Term Loan Lender thereof. Not
later than 12:00 Noon, New York City time, on the Closing Date each Term Loan
Lender shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the Term Loan or Term Loans to be
made by such Lender. The Administrative Agent shall make available to the
Borrower with the aggregate of the amounts made available to the Administrative
Agent by the Term Loan Lenders in immediately available funds.
2.3 REPAYMENT OF TERM LOANS. (a) The Tranche A Term Loan of each
Tranche A Lender shall mature in 20 consecutive quarterly installments,
commencing on March 31, 1998, each of which shall be in an amount equal to such
Lender's Tranche A Term Loan Percentage multiplied by the amount set forth below
opposite such installment:
Installment Principal Amount
March 31, 1998 $700,000
June 30, 1998 700,000
September 30, 1998 700,000
December 31, 1998 700,000
March 31, 1999 1,850,000
June 30, 1999 1,850,000
27
September 30, 1999 1,850,000
December 31, 1999 1,850,000
March 31, 2000 1,850,000
June 30, 2000 1,850,000
September 30, 2000 1,850,000
December 31, 2000 1,850,000
March 31, 2001 2,175,000
June 30, 2001 2,175,000
September 30, 2001 2,175,000
December 31, 2001 2,175,000
March 31, 2002 2,175,000
June 30, 2002 2,175,000
September 30, 2002 2,175,000
December 31, 2002 2,175,000
(b) The Tranche B Term Loan of each Tranche B Lender shall mature in
24 consecutive quarterly installments, commencing on March 31, 1998, each of
which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
Installment Principal Amount
March 31, 1998 $100,000
June 30, 1998 100,000
September 30, 1998 100,000
December 31, 1998 100,000
March 31, 1999 100,000
June 30, 1999 100,000
September 30, 1999 100,000
December 31, 1999 100,000
March 31, 2000 100,000
June 30, 2000 100,000
September 30, 2000 100,000
December 31, 2000 100,000
March 31, 2001 100,000
June 30, 2001 100,000
September 30, 2001 100,000
December 31, 2001 100,000
March 31, 2002 100,000
June 30, 2002 100,000
September 30, 2002 100,000
December 31, 2002 100,000
March 31, 2003 3,250,000
June 30, 2003 3,250,000
September 30, 2003 3,250,000
28
December 31, 2003 3,250,000
2.4 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("REVOLVING CREDIT LOANS") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Xxxxxx's Revolving
Credit Percentage of the sum of the L/C Obligations then outstanding, does not
exceed the amount of such Xxxxxx's Revolving Credit Commitment. During the
Revolving Credit Commitment Period the Borrower may use the Revolving Credit
Commitments by borrowing, prepaying the Revolving Credit Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
The Revolving Credit Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.5 and 2.11, PROVIDED that no Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Revolving Credit Termination Date.
2.5 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, PROVIDED that the Borrower shall give the
Administrative Agent irrevocable Notice of Borrowing (which notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City time,
(a) three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date,
in the case of Base Rate Loans), specifying (i) the amount and Type of Revolving
Credit Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the
case of Eurodollar Loans, the respective amounts of each such Type of Loan and
the respective lengths of the initial Interest Period therefor. Any Revolving
Credit Loans made on the Closing Date shall initially be Base Rate Loans and no
Revolving Credit Loan may be made as, converted into or continued as a
Eurodollar Loan having an Interest Period in excess of one month prior to the
Syndication Date; PROVIDED that the Eurodollar Rate shall be redetermined as of
the Syndication Date (based on the Interest Period selected by the Borrower and
communicated to the Administrative Agent in accordance with the terms hereof)
and such redetermined Eurodollar Rate shall apply to all Eurodollar Loans
outstanding as of the Syndication Date. Each borrowing under the Revolving
Credit Commitments shall be in an amount equal to (x) in the case of Base Rate
Loans, $1,000,000 or a whole multiple thereof (or, if the then aggregate
Available Revolving Credit Commitments are less than $1,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $2,500,000 or a whole multiple
of $1,000,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Credit
Lender thereof. Each Revolving Credit Lender will make the amount of its PRO
rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the Funding Office prior to 12:00 Noon, New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent crediting the account of
the
29
Borrower on the books of the Funding Office with the aggregate of the
amounts made available to the Administrative Agent by the Revolving Credit
Lenders and in like funds as received by the Administrative Agent.
2.6 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Term Loan Lender, as
the case may be, (i) the then unpaid principal amount of each Revolving
Credit Loan of such Revolving Credit Lender on the Revolving Credit
Termination Date (or such earlier date on which the Loans become due and
payable pursuant to Section 8) and (ii) the principal amount of each Term
Loan of such Term Loan Lender in installments according to the amortization
schedule set forth in Section 2.3 (or on such earlier date on which the Loans
become due and payable pursuant to Section 8). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time
to time outstanding from the date hereof until payment in full thereof at the
rates per annum, and on the dates, set forth in Section 2.13.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to
such Lender resulting from each Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(e), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each
Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Xxxxxx's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.6(b) shall, to the extent permitted
by applicable law, be PRIMA FACIE evidence of the existence and amounts of
the obligations of the Borrower therein recorded; PROVIDED that the failure
of any Lender or the Administrative Agent to maintain the Register or any
such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made
to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, promptly following the request to
the Administrative Agent by any Lender, the Borrower will execute and deliver
to such Lender (i) a promissory note of the Borrower evidencing any Term
Loans (a "TERM NOTE") or Revolving Credit Loans (a "REVOLVING CREDIT NOTE"),
as the case may be, of such Lender, substantially in the forms of Exhibit G-1
or G-2, respectively, with appropriate insertions as to date and principal
amount.
2.7 COMMITMENT FEES, ETC. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from
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and including the Closing Date to the last day of the Revolving Credit
Commitment Period, computed at the rate per annum of .375% on the average
daily amount of the Available Revolving Credit Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears on
the last day of each March, June, September and December and on the Revolving
Credit Termination Date, commencing on the first of such dates to occur after
the date hereof.
(b) The Borrower agrees to pay to the Arranger and the Syndication
Agent the fees in the amounts and on the dates from time to time agreed to in
writing by the Borrower and the Syndication Agent.
(c) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing
by the Borrower and the Administrative Agent.
2.8 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS. The
Borrower shall have the right, upon not less than two Business Days' notice
to the Administrative Agent, to terminate the Revolving Credit Commitments
or, from time to time, to reduce the amount of the Revolving Credit
Commitments; PROVIDED that no such termination or reduction of Revolving
Credit Commitments shall be permitted to the extent that, after giving effect
thereto and to any prepayments of the Revolving Credit Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Credit Commitments. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments then in effect.
2.9 OPTIONAL PREPAYMENTS. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at
least three Business Days prior thereto in the case of Eurodollar Loans and
at least one Business Day prior thereto in the case of Base Rate Loans, which
notice shall specify the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans or Base Rate Loans; PROVIDED that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.19. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof. If any such notice
is given, the amount specified in such notice shall be due and payable on the
date specified therein, together with (except in the case of Revolving Credit
Loans which are Base Rate Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Term Loans and Revolving Credit Loans shall
be in an aggregate principal amount of $1,000,000 or a whole multiple thereof.
2.10 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) Unless
the Required Prepayment Lenders shall otherwise agree, if any Capital Stock or
Indebtedness shall be issued or Incurred by the Borrower or any of its
Subsidiaries (excluding any Indebtedness Incurred in accordance with Section 7.2
or Capital Stock issued in accordance with Section 7.9), an amount equal to 100%
of the Net Cash Proceeds of any Indebtedness Incurred and 75% of the Net Cash
Proceeds of any Capital Stock issued shall be applied on the date of such
issuance or
31
Incurrence toward the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.10(d).
(b) Unless the Required Prepayment Lenders shall otherwise agree,
if on any date the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be
applied on such date toward the prepayment of the Term Loans and the
reduction of the Revolving Credit Commitments as set forth in Section
2.10(d); PROVIDED that notwithstanding the foregoing, (i) the aggregate Net
Cash Proceeds of Asset Sales and Recovery Events that may be excluded from
the foregoing requirement pursuant to a Reinvestment Notice shall not exceed
$2,000,000 in any fiscal year of the Borrower and (ii) on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event shall be applied toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.10(d).
(c) Unless the Required Prepayment Lenders shall otherwise agree,
if, for any fiscal year of the Borrower commencing with the fiscal year
ending December 31, 1997, there shall be Excess Cash Flow, the Borrower
shall, on the relevant Excess Cash Flow Application Date, apply the ECF
Percentage of such Excess Cash Flow toward the prepayment of the Term Loans
and the reduction of the Revolving Credit Commitments as set forth in Section
2.10(d). Except as set forth in Section 2.16(d), each such prepayment and
commitment reduction shall be made on a date (an "EXCESS CASH FLOW
APPLICATION DATE") no later than five days after the earlier of (i) the date
on which the financial statements of the Borrower referred to in Section
6.1(a), for the fiscal year with respect to which such prepayment is made,
are required to be delivered to the Lenders and (ii) the date such financial
statements are actually delivered.
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section 2.10 shall be applied,
FIRST, to the prepayment of the Term Loans and, SECOND, to reduce permanently
the Revolving Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving Credit Loans
to the extent, if any, that the Total Revolving Extensions of Credit exceed
the amount of the Total Revolving Credit Commitments as so reduced, PROVIDED
that if the aggregate principal amount of Revolving Credit Loans then
outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Borrower shall, to the extent of the
balance of such excess, replace outstanding Letters of Credit and/or deposit
an amount in cash in a cash collateral account established with the
Administrative Agent for the benefit of the Lenders on terms and conditions
satisfactory to the Administrative Agent. The application of any prepayment
pursuant to this Section 2.10 shall be made, FIRST, to Base Rate Loans and,
SECOND, to Eurodollar Loans. Each prepayment of the Loans under this Section
2.10 (except in the case of Revolving Credit Loans that are Base Rate Loans)
shall be accompanied by accrued interest to the date of such prepayment on
the amount prepaid.
2.11 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable Notice of
Borrowing of such election, PROVIDED that any such conversion of Eurodollar
Loans may only be made on the last day of an Interest Period
32
with respect thereto. The Borrower may elect from time to time to convert
Base Rate Loans to Eurodollar Loans by giving the Administrative Agent at
least three Business Days' prior irrevocable Notice of Borrowing of such
election (which notice shall specify the length of the initial Interest
Period therefor), PROVIDED that no Base Rate Loan under a particular Facility
may be converted into a Eurodollar Loan (i) when any Event of Default has
occurred and is continuing and the Administrative Agent or the Majority
Facility Lenders in respect of such Facility have determined in its or their
sole discretion not to permit such conversions or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable Notice of Borrowing to the Administrative Agent,
in accordance with the applicable provisions of the term "Interest Period"
set forth in Section 1.1, of the length of the next Interest Period to be
applicable to such Loans, PROVIDED that no Eurodollar Loan under a particular
Facility may be continued as such (i) when any Event of Default has occurred
and is continuing and the Administrative Agent has or the Majority Facility
Lenders in respect of such Facility have determined in its or their sole
discretion not to permit such continuations or (ii) after the date that is
one month prior to the final scheduled termination or maturity date of such
Facility, and PROVIDED, FURTHER, that if the Borrower shall fail to give any
required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to Base Rate Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
2.12 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF EURODOLLAR TRANCHES.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than eight
Eurodollar Tranches shall be outstanding at any one time.
2.13 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
which is equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section 2.13
PLUS 2%
33
or (y) in the case of Reimbursement Obligations, the rate applicable to Base
Rate Loans under the Revolving Credit Facility PLUS 2%, and (ii) if all or a
portion of any interest payable on any Loan or Reimbursement Obligation or
any commitment fee or other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum equal to the rate
applicable to Base Rate Loans under the relevant Facility PLUS 2% (or, in the
case of any such other amounts that do not relate directly to the Loans, the
Base Rate PLUS 4%), in each case, with respect to clauses (i) and (ii) above,
from the date of such non-payment until such amount is paid in full (as well
after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
Section 2.13 shall be payable from time to time on demand.
2.14 COMPUTATION OF INTEREST AND FEES. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base
Rate Loans the rate of interest on which is calculated on the basis of the
Prime Rate, the interest thereon shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of each determination of a Eurodollar Rate. Any change in
the interest rate on a Loan resulting from a change in the Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
relevant Lenders of the effective date and the amount of each such change in
interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error.
The Administrative Agent shall, at the request of the Borrower, promptly
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.13(a).
2.15 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
34
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made
as Base Rate Loans, (y) any Loans under the relevant Facility that were to
have been converted on the first day of such Interest Period to Eurodollar
Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans under the relevant Facility shall be converted, on the last
day of the then current Interest Period, to Base Rate Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans under the relevant Facility shall be made or continued as such, nor
shall the Borrower have the right to convert Loans under the relevant
Facility to Eurodollar Loans.
2.16 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee and any reduction of the Commitments of the Lenders
shall be made PRO RATA according to the respective Tranche A Term Loan
Percentages, Tranche B Term Loan Percentages or Revolving Credit Percentages,
as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made PRO RATA
according to the respective outstanding principal amounts of the Term Loans
then held by the Term Loan Lenders (except as otherwise provided in Section
2.16(d). The amount of each principal prepayment of the Term Loans shall be
applied to reduce the then remaining installments of the Tranche A Term Loans
and Tranche B Term Loans, as the case may be, PRO RATA based upon the then
remaining principal amount thereof. Amounts prepaid on account of the Term
Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be
made PRO RATA according to the respective outstanding principal amounts of
the Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Sections 2.9, 2.10 or
2.16, so long as any Tranche A Term Loans are outstanding, each Tranche B Term
Loan Lender may, at its option, decline up to 50% of the portion of any optional
prepayment or mandatory prepayment applicable to the Tranche B Term Loans of
such Lender; accordingly, with respect to the amount of any optional prepayment
described in Section 2.9 or mandatory prepayment described in Section 2.10 that
is allocated to Tranche B Term Loans (such amount, the "TRANCHE B PREPAYMENT
AMOUNT"), at any time when Tranche A Term Loans remain outstanding, the Borrower
will, (i) in the case of any optional prepayment which the Borrower wishes to
make, not later than ten Business Days prior to the date on which the Borrower
wishes to make such optional prepayment, and (ii) in the case of any mandatory
prepayment required to be made pursuant to Section 2.10, in lieu of applying
such amount to the prepayment of Tranche B Term Loans, as provided in paragraph
Section 2.10(d), on the date specified in Section 2.10 for such prepayment, give
the Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each Tranche B
Term Loan Lender a notice (each, a "PREPAYMENT OPTION NOTICE") as described
below. As promptly as practicable after receiving such notice from the
Borrower, the Administrative Agent will send to
35
each Tranche B Term Loan Lender a Prepayment Option Notice, which shall be in
the form of Exhibit H, and shall include an offer by the Borrower to prepay
on the date (each a "PREPAYMENT DATE") that is five Business Days after the
date of the Prepayment Option Notice, the relevant Term Loans of such Lender
by an amount equal to the portion of the Prepayment Amount indicated in such
Lender's Prepayment Option Notice as being applicable to such Lender's
Tranche B Term Loans. On the Prepayment Date, (i) the Borrower shall pay to
the Administrative Agent the aggregate amount necessary to prepay that
portion of the outstanding relevant Term Loans in respect of which Tranche B
Term Loan Lenders have accepted prepayment as described above (such Lenders,
the "ACCEPTING LENDERS"), and such amount shall be applied to reduce the
Tranche B Prepayment Amounts with respect to each Accepting Lender, (ii) the
Borrower shall pay to the Administrative Agent an amount equal to 50% of the
portion of the Tranche B Prepayment Amount not accepted by the Accepting
Lenders, and such amount shall be applied to the prepayment of the Tranche A
Term Loans, and (C) the Borrower shall be entitled to retain the remaining
50% of the portion of the Tranche B Prepayment Amount not accepted by the
Accepting Lenders. Each Term Loan Lender other than an Accepting Lender
shall receive its portion of any optional prepayment or mandatory prepayment
as set forth in Sections 2.9, 2.10 and 2.16.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made
prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Payment Office,
in Dollars and in immediately available funds. The Administrative Agent
shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension
of any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this Section 2.16(f) shall
be conclusive in the absence of manifest error. If such Xxxxxx's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the
36
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to Base Rate Loans under
the relevant Facility, on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective PRO RATA
shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days of such
required date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available
pursuant to the preceding sentence, such amount with interest thereon at the
rate per annum equal to the daily average Federal Funds Effective Rate.
Nothing herein shall be deemed to limit the rights of the Administrative
Agent or any Lender against the Borrower.
2.17 REQUIREMENTS OF LAW. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 2.18 and changes in the rate of tax on the overall net income of
such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary
to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 2.17, it shall promptly notify the Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has
become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or
37
compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the
force of law) from any Governmental Authority made subsequent to the date
hereof shall have the effect of reducing the rate of return on such Lender's
or such corporation's capital as a consequence of its obligations hereunder
or under or in respect of any Letter of Credit to a level below that which
such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, after submission by
such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall promptly pay to such Lender such
additional amount or amounts as will compensate such Lender for such
reduction.
(c) A certificate (providing reasonable support as to the amounts
requested) as to any additional amounts payable pursuant to this Section 2.17
submitted by any Lender to the Borrower (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error. The obligations
of the Borrower pursuant to this Section 2.17 shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.18 TAXES. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and
franchise taxes (imposed in lieu of net income taxes) imposed on any Agent or
any Lender as a result of a present or former connection between such Agent
or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from such Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to be
withheld from any amounts payable to any Agent or any Lender hereunder, the
amounts so payable to such Agent or such Lender shall be increased to the
extent necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement,
PROVIDED, HOWEVER, that the Borrower shall not be required to increase any
such amounts payable to any Lender with respect to any Non-Excluded Taxes (i)
that are attributable to such Xxxxxx's failure to comply with the
requirements of paragraph (d) or (e) of this subsection or (ii) that are
United States withholding taxes imposed on amounts payable to such Lender at
the time the Lender becomes a party to this Agreement, except to the extent
that such Xxxxxx's assignor (if any) was entitled, at the time of assignment,
to receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to Section 2.18(a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
38
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the relevant Agent or Lender, as
the case may be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Agents the required receipts or other
required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by any Agent or any Lender as a result of
any such failure. The agreements in this Section 2.18 shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or resident
of the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States (or any jurisdiction
thereof), or any estate or trust that is subject to federal income taxation
regardless of the source of its income (a "NON-U.S. LENDER") shall deliver to
the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form 1001 or Form 4224,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest" a statement substantially in the form of
Exhibit I and a Form W-8, or any subsequent versions thereof or successors
thereto properly completed and duly executed by such Xxx-X.X. Xxxxxx claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax
on all payments by the Borrower under this Agreement and the other Loan
Documents. Such forms shall be delivered by each Non-U.S. Lender on or
before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered
by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the
Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other
form of certification adopted by the U.S. taxing authorities for such
purpose). Notwithstanding any other provision of this Section 2.18(b), a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.18(d) that such Non-U.S. Lender is not legally able to deliver.
(e) Without limiting the requirements of Section 2.18(d), a Lender
that is entitled to an exemption from or reduction of non-U.S. withholding
tax under the law of the jurisdiction in which the Borrower is located, or
any treaty to which such jurisdiction is a party, with respect to payments
under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, PROVIDED that such Lender is
legally entitled to complete, execute and deliver such documentation and in
such Xxxxxx's reasonable judgment such completion, execution or submission
would not materially prejudice the legal position of such Lender.
39
(f) If the Administrative Agent or any Lender receives a refund in
respect of Non-Excluded Taxes paid by the Borrower, which in the good faith
judgment of such Lender is allocable to such payment, it shall promptly pay
such refund, together with any other amounts paid by the Borrower in
connection with such refunded Non-Excluded Taxes, to the Borrower, net of all
out-of-pocket expenses of such Lender incurred in obtaining such refund,
PROVIDED, that the Borrower agrees to promptly return such refund to the
Administrative Agent or the applicable Lender, as the case may be, if it
receives notice from the Administrative Agent or applicable Lender that such
Administrative Agent or Lender is required to repay such refund.
2.19 INDEMNITY. The Borrower agrees to indemnify each Lender and
to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with
the provisions of this Agreement or (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period
with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert
or continue to the last day of such Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) OVER (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market. A certificate
(providing reasonable support as to any amounts due) as to any amounts
payable pursuant to this Section 2.19 submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
2.20 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.17, 2.18(a)
or 2.22 with respect to such Lender, it will, if requested by the Borrower,
use reasonable efforts (subject to overall policy considerations of such
Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; PROVIDED,
that such designation is made on terms that, in the sole judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic,
legal or regulatory disadvantage, and PROVIDED, FURTHER, that nothing in this
Section 2.20 shall affect or postpone any of the obligations of any Borrower
or the rights of any Lender pursuant to Section 2.17, 2.18(a) or 2.22.
2.21 REPLACEMENT OF LENDERS. If, at any time, so long as no Default
or Event of Default shall have occurred and be continuing (a) the Borrower
becomes obligated to pay additional amounts described in Sections 2.17 or 2.18
as a result of any conditions described in such Sections, (b) any of the events
described in Section 2.22 shall occur and any Lender is thereby prohibited from
making or maintaining Eurodollar Loans as contemplated by this
40
Agreement or (c) any Lender becomes insolvent and its assets become subject
to a receiver, liquidator, trustee, custodian or other Person having similar
powers, then the Borrower may, on ten Business Days prior written notice to
the Administrative Agent and such Lender, replace such Lender by causing such
Lender to (and such Lender shall) assign pursuant to Section 10.6(c) all of
its rights and obligations under this Agreement to a Lender or other entity
selected by the Borrower and reasonably acceptable to the Administrative
Agent (which consent shall not be unreasonably withheld or delayed) for a
purchase price equal to the outstanding principal amount of such Xxxxxx's
Loans and all accrued interest and fees and, as shall be paid by either the
Borrower or the assignee (as they may agree), other amounts accrued and
unpaid hereunder; PROVIDED that (i) the Borrower shall have no right to
replace the Administrative Agent (but may replace such Person as a Lender),
(ii) neither the Administrative Agent nor any Lender shall have any
obligation to the Borrower to find a replacement Lender or other such entity
and (iii) in the event of replacement of a Lender to which the Borrower
becomes obligated to pay additional amounts referred to in this Section, in
order for the Borrower to be entitled to replace such a Lender, such
replacement must take place no later than 180 days after the Lender shall
have demanded payment of additional amounts under one of the Sections
described in this Section. In the case of a replacement of a Lender to which
the Borrower becomes obligated to pay additional amounts referred to in this
Section, the Borrower shall pay such additional amounts to such Lender prior
to such Lender being replaced and the payment of such additional amounts
shall be a condition to the replacement of such Lender.
2.22 ILLEGALITY. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
the commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans
shall forthwith be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
2.19.
SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) After the Syndication Date, subject to the
terms and conditions hereof, the Issuing Lender, in reliance on the agreements
of the other Revolving Credit Lenders set forth in Section 3.4(a), agrees to
issue letters of credit ("LETTERS OF CREDIT") for the account of the Borrower on
any Business Day during the Revolving Credit Commitment Period in such form as
may be approved from time to time by the Issuing Lender; PROVIDED that the
Issuing Lender shall have no obligation to issue any Letter of Credit if, after
giving effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Revolving Credit
Commitments would be less than zero. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Scheduled Revolving Credit Termination Date, PROVIDED
that any Letter of Credit with a one-year
41
term may provide for the renewal thereof for additional one-year periods
(which shall in no event extend beyond the date referred to in clause (y)
above).
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower may
from time to time after the Syndication Date request that the Issuing Lender
issue a Letter of Credit by delivering to the Issuing Lender at its address
for notices specified herein an Application therefor, completed to the
satisfaction of the Issuing Lender, and such other certificates, documents
and other papers and information as the Issuing Lender may reasonably
request. Upon receipt of any Application, the Issuing Lender will process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such
Letter of Credit to the beneficiary thereof or as otherwise may be agreed to
by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a
copy of such Letter of Credit to the Borrower promptly following the issuance
thereof. The Issuing Lender shall promptly furnish to the Administrative
Agent, which shall in turn promptly furnish to the Lenders, notice of the
issuance of each Letter of Credit (including the amount thereof). The letter
of credit identified on Schedule 3.2 to the Disclosure Letter shall at all
times on and after the Syndication Date (PROVIDED that on such date Union
Bank of California, N.A. shall be a Lender party hereto) be deemed to be a
"Letter of Credit" for all purposes of this Agreement and the other Loan
Documents, and, Union Bank of California, N.A. shall be the "Issuing Lender"
in respect thereof.
3.3 COMMISSIONS, FEES AND OTHER CHARGES. (a) The Borrower will
pay a commission on all outstanding Letters of Credit at a per annum rate
equal to the Applicable Margin then in effect with respect to Eurodollar
Loans under the Revolving Credit Facility MINUS the fronting fee referred to
below, shared ratably among the Revolving Credit Lenders and payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date.
In addition, the Borrower shall pay to the Issuing Lender for its own account
a fronting fee of 1/4 of 1% per annum, payable quarterly in arrears on each
L/C Fee Payment Date after the Issuance Date.
(b) In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by the Issuing Lender
in issuing, negotiating, effecting payment under, amending or otherwise
administering any Letter of Credit.
3.4 L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit
42
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and
risk an undivided interest equal to such L/C Participant's Revolving Credit
Percentage in the Issuing Lender's obligations and rights under each Letter
of Credit issued hereunder and the amount of each draft paid by the Issuing
Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by the Borrower
in accordance with the terms of this Agreement, such L/C Participant shall
pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Credit Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit
is paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on
demand an amount equal to the product of (i) such amount, times (ii) the
daily average Federal Funds Effective Rate during the period from and
including the date such payment is required to the date on which such payment
is immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and
the denominator of which is 360. If any such amount required to be paid by
any L/C Participant pursuant to Section 3.4(a) is not made available to the
Issuing Lender by such L/C Participant within three Business Days after the
date such payment is due, the Issuing Lender shall be entitled to recover
from such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to Base Rate
Loans under the Revolving Credit Facility. A certificate of the Issuing
Lender submitted to any L/C Participant with respect to any amounts owing
under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant
its PRO rata share of such payment in accordance with Section 3.4(a), the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of collateral
applied thereto by the Issuing Lender), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its PRO
RATA share thereof; PROVIDED, HOWEVER, that in the event that any such
payment received by the Issuing Lender shall be required to be returned by
the Issuing Lender, such L/C Participant shall return to the Issuing Lender
the portion thereof previously distributed by the Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. The Borrower agrees
to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by the Issuing Lender in connection with such payment. Each such
payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States and in immediately
available funds. Interest shall be payable on any and all
43
amounts remaining unpaid by the Borrower under this Section from the date
such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate set forth in Section 2.13(c).
Each drawing under any Letter of Credit shall (unless an event of the type
described in clause (i) or (ii) of Section 8(f) shall have occurred and be
continuing with respect to the Borrower, in which case the procedures
specified in Section 3.4 for funding by L/C Participants shall apply)
constitute a request by the Borrower to the Administrative Agent for a
borrowing pursuant to Section 2.5 of Base Rate Loans in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the date
of such drawing.
3.6 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any beneficiary of
a Letter of Credit or any other Person. The Borrower also agrees with the
Issuing Lender that the Issuing Lender shall not be responsible for, and the
Borrower's Reimbursement Obligations under Section 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or any claims whatsoever of the Borrower
against any beneficiary of such Letter of Credit or any such transferee. The
Issuing Lender shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of the Issuing Lender. The Borrower agrees that any action taken or omitted
by the Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care specified in
the Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender to the
Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly
notify the Borrower of the date and amount thereof. The responsibility of
the Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
44
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement
and to make the Loans and issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to each Agent and each Lender that:
4.1 FINANCIAL CONDITION. (a) The unaudited PRO FORMA
consolidated balance sheet of the Borrower and its consolidated Subsidiaries
as at the Closing Date (including the notes thereto) (the "PRO FORMA BALANCE
SHEET"), copies of which have heretofore been furnished to each Lender, has
been prepared giving effect (as if such events had occurred on such date) to
(i) the consummation of the Merger, (ii) the Loans to be made and the Senior
Subordinated Notes to be issued on the Closing Date and the use of proceeds
thereof, (iii) the other transactions contemplated hereby and (iv) the
payment of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on the best information available to
the Borrower as of the date of delivery thereof, and presents fairly on a PRO
FORMA basis the estimated financial position of Borrower and its consolidated
Subsidiaries as at the Closing Date, assuming that the events specified in
the preceding sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of Axiohm S.A. as at
December 31, 1995 and December 31, 1996, and the related consolidated
statements of income and of cash flows for the fiscal years ended on such
dates, reported on by and accompanied by an unqualified report from Price
Waterhouse, present fairly the consolidated financial condition of Axiohm
S.A. as at such dates, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of Axiohm S.A. as at June 30, 1997, and
the related unaudited consolidated statements of income and cash flows for
the six-month period ended on such date, present fairly the consolidated
financial condition of Axiohm S.A. as at such date, and the consolidated
results of its operations and its consolidated cash flows for the six-month
period then ended (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of
accountants and disclosed therein. Axiohm S.A. and its Subsidiaries do not
have any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or
long-term commitments, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other obligation in respect
of derivatives, which are not reflected in the most recent financial
statements referred to in this paragraph (b). During the period from
December 31, 1996 to and including the date hereof, there has been no
Disposition by Axiohm S.A. or its Subsidiaries of any material part of its
business or Property or, except as a part of the Pre-Merger Transactions, any
transfer of Capital Stock to any Person other than Axiohm S.A. or a
Subsidiary Guarantor that is a Domestic Subsidiary.
(c) The audited consolidated balance sheets of the Borrower as at
December 31, 1994, December 31, 1995 and December 31, 1996, and the related
consolidated statements of income and of cash flows for the fiscal years
ended on such dates, reported on by and accompanied by an unqualified report
from KPMG Peat Marwick LLP, present fairly the consolidated financial
condition of the Borrower as at such dates, and the consolidated results of
45
its operations and its consolidated cash flows for the respective fiscal
years then ended. The unaudited consolidated balance sheet of the Borrower
as at June 30, 1997, and the related unaudited consolidated statements of
income and cash flows for the six-month period ended on such date, present
fairly the consolidated financial condition of the Borrower as at such date,
and the consolidated results of its operations and its consolidated cash
flows for the six-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). The Borrower and
its Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, which are not reflected in the most recent financial
statements referred to in this paragraph (c). During the period from
December 31, 1996 to and including the date hereof there has been no
Disposition by the Borrower or its Subsidiaries of any material part of its
business or Property.
4.2 NO CHANGE. Since December 31, 1996 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate
its Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of Property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law, except, in the case of clauses (c) and (d), to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in
the case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of
the Borrower, to authorize the borrowings on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Merger and the borrowings hereunder or with
the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents, authorizations,
filings and notices have been obtained or made and are in full force and
effect and (ii) the filings referred to in Section 4.19(b). Each Loan
Document has been duly executed and delivered on behalf of each Loan Party
party thereto. This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan
Party party thereto, enforceable against each such Loan Party in accordance
with its terms, except as enforceability
46
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents). No Requirement of Law or
Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
4.6 NO MATERIAL LITIGATION. Except as provided in Schedule 4.6 to
the Disclosure Letter, no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or any of
its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
4.7 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries
is in default under or with respect to any of its Contractual Obligations in
any respect which could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Except as set forth in Schedule
4.9 to the Disclosure Letter (which exceptions could not reasonably be
expected to have a Material Adverse Effect), each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in,
all its other material Property, except for any defects in title that do not
interfere in any material respect with its ability to conduct its business as
currently conducted or to utilize such properties and assets for their
intended purposes, and none of such Property is subject to any Lien except as
permitted by Section 7.3.
4.9 INTELLECTUAL PROPERTY. Except as set forth in Schedule 4.9 to
the Disclosure Letter (which exceptions could not reasonably be expected to
have a Material Adverse Effect); (i) the Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted; (ii) no material
claim has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does the Borrower know of any
valid basis for any such claim; and (iii) the use of Intellectual Property by
the Borrower and its Subsidiaries does not infringe on the rights of any
Person in any material respect.
4.10 TAXES. Each of the Borrower and each of its Subsidiaries has
filed or caused to be filed all Federal, state and other material tax returns
which are required to be filed and has
47
paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its Property and all other taxes, fees
or other charges imposed on it or any of its Property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the
Borrower or its Subsidiaries, as the case may be); no tax Lien has been
filed, and, to the knowledge of the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or
Regulation U as now and from time to time hereafter in effect in violation of
the provisions of the Regulations of the Board. If requested by any Lender
or the Administrative Agent, the Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with
the requirements of FR Form G-3 or FR Form U-1 referred to in Regulation G or
Regulation U, as the case may be.
4.12 LABOR MATTERS. There are no strikes or other labor disputes
against the Borrower or any of its Subsidiaries pending or, to the knowledge
of the Borrower, threatened that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Borrower and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect.
All payments due from the Borrower or any of its Subsidiaries on account of
employee health and welfare insurance that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect if not paid
have been paid or accrued as a liability on the books of the Borrower or the
relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan,
and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan
has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during
such five-year period. The present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by a material amount. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan which has resulted or could reasonably
be expected to result in a material liability under ERISA, and neither the
Borrower nor any Commonly Controlled Entity would become subject to any
material liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
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4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is
an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. No Loan Party is subject to regulation under any Requirement of Law
(other than Regulation X of the Board) which limits its ability to incur
Indebtedness.
4.15 SUBSIDIARIES. The Subsidiaries listed on Schedule 4.15 to
the Disclosure Letter constitute as of the Closing Date all the Subsidiaries
of the Borrower at the date hereof.
4.16 USE OF PROCEEDS. (a) The proceeds of the Term Loans will be
used (i) to refinance the borrowings of Acquisition Co. under the Tender
Facility, (ii) to finance the redemption of the Interim Preferred Stock
issued by Axiohm-IPB in connection with the Tender Offer, (iii) to refinance
certain indebtedness of the Borrower outstanding after the Merger, (iv) to
finance the payment to be made to shareholders of Axiohm S.A. in connection
with the Exchange Offer and (v) the payment of the fees and expenses of the
Merger and the Tender Offer and the transactions contemplated thereby.
(b) The proceeds of the Revolving Credit Loans shall be used for
working capital purposes and other general corporate purposes of the Borrower
and its Subsidiaries; PROVIDED that up to $2,400,000 of the proceeds of
Revolving Credit Loans may be used for the purposes set forth in Section
4.16(a). Letters of Credit shall be used to provide credit support for
insurance and other general corporate requirements of the Borrower and its
Subsidiaries.
4.17 ENVIRONMENTAL MATTERS. Except as in the aggregate could not
reasonably be expected to result in the payment of a Material Environmental
Amount:
(a) The facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "PROPERTIES") do not contain, and,
to the best knowledge of the Borrower, have not previously contained, any
Materials of Environmental Concern in amounts or concentrations or under
circumstances which (i) constitute or constituted a violation of, or (ii)
could give rise to liability under, any Environmental Law.
(b) The Properties and all operations at the Properties are in
material compliance, and have, to the best knowledge of the Borrower, in the
last five years been in material compliance, with all applicable
Environmental Laws, and there is, to the best knowledge of the Borrower, no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by
the Borrower or any of its Subsidiaries (the "BUSINESS"). Neither the
Borrower nor any of its Subsidiaries has assumed or retained any liability of
any other Person under Environmental Laws.
(c) Neither the Borrower nor any of its Subsidiaries has received
or is aware of any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the Properties or
the Business, nor does the Borrower have knowledge or reason to believe that
any such notice will be received or is being threatened.
49
(d) To the best knowledge of the Borrower, Materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could give
rise to liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of at, on
or under any of the Properties in violation of, or in a manner that could
give rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be named
as a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding
under any Environmental Law with respect to the Properties or the Business.
(f) To the best knowledge of the Borrower, there has been no
release or threat of release of Materials of Environmental Concern at or from
the Properties, or arising from or related to the operations of the Borrower
or any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.
For purposes of Section 8(b) of this Agreement, each of the
foregoing representations and warranties contained in this Section 4.17 that
are qualified by the knowledge or best knowledge of the Borrower shall be
deemed not to be so qualified.
4.18 ACCURACY OF INFORMATION, ETC. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement
(including the financial statements of Axiohm S.A. as at and for the period
ended December 31, 1994) furnished to the Administrative Agent or the Lenders
or any of them, by or on behalf of any Loan Party for use in connection with
the transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum,
as of the date of this Agreement), any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein, taken as a whole, not misleading. The
projections and PRO FORMA financial information contained in the materials
referenced above are based upon good faith estimates and assumptions believed
by management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. As of the date
hereof, the representations and warranties contained in the Merger Agreement
are true and correct in all material respects. There is no fact known to any
Loan Party that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the Administrative Agent
and the Lenders for use in connection with the transactions contemplated
hereby and by the other Loan Documents.
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4.19 SECURITY DOCUMENTS. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for
the benefit of the Lenders, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in
the Guarantee and Collateral Agreement, when financing statements in
appropriate form are filed in the offices specified on Schedule 4.19(a) to
the Disclosure Letter and such other filings as are specified on Schedule 3
to the Guarantee and Collateral Agreement, the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Collateral and
the proceeds thereof, as security for the Obligations (as defined in the
Guarantee and Collateral Agreement), in each case prior and superior in right
to any other Person (except, in the case of Collateral other than Pledged
Stock, Liens permitted by Section 7.3).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on
Schedule 4.19(b) to the Disclosure Letter, each such Mortgage shall
constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in the Mortgaged Properties and the
proceeds thereof, as security for the Obligations (as defined in the relevant
Mortgage), in each case prior and superior in right to any other Person.
(c) The French Security Document is effective to create in favor
of the Administrative Agent, for the benefit of the Lenders, a legal, valid
and enforceable security interest in the collateral described therein and
proceeds thereof. In the case of the collateral described in the French
Security Document, the French Security Document shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in the collateral and the proceeds thereof, as security for
the Secured Liabilities (as defined in the French Security Document), in each
case prior and superior in right to any other Person (except Liens permitted
by Section 7.3).
(d) The Australian Pledge Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable security interest in the Pledged Stock described
therein. When stock certificates representing such Pledged Stock are
delivered to the Administrative Agent, the Australian Pledge Agreement shall
constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Pledge Stock, as security for
the Secured Moneys (as defined in the Australian Pledge Agreement), prior and
superior in right to any other Person.
(e) The U.K. Pledge Agreement is effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Pledged Stock described therein. When
stock certificates representing such Pledged Stock are delivered to the
Administrative Agent, the U.K. Pledge Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Pledge Stock, as security for the Secured
Liabilities (as defined in the U.K. Pledge Agreement), prior and superior in
right to any other Person.
51
(f) The French Pledge Agreements are effective to create in favor
of the Administrative Agent, for the benefit of the Lenders, a legal, valid
and enforceable security interest in the Pledged Stock described therein.
When the formalities of perfection set forth in Article 2.1 or 12 (as
applicable) of the French Pledge Agreements have been consummated, the French
Pledge Agreements shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such Pledge
Stock, as security for the Secured Liabilities (as defined in the French
Pledge Agreements), prior and superior in right to any other Person.
4.20 SOLVENCY. With due consideration given to Section 2.1 of the
Guarantee and Collateral Agreement, each Loan Party is, and after giving
effect to the Merger and Exchange Offer and the incurrence of all
Indebtedness and obligations being incurred in connection herewith and
therewith will be and will continue to be, Solvent.
4.21 SENIOR INDEBTEDNESS. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the Senior Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the
Guarantee and Collateral Agreement constitute "Senior Indebtedness" of such
Subsidiary Guarantor under and as defined in the Senior Subordinated Note
Indenture.
4.22 REGULATION H. No Mortgage encumbers improved real property
which is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement of
each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction, prior to or concurrently with the making
of such extension of credit on the Closing Date, of the following conditions
precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of
the Borrower, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of each party thereto, (iii) each of
the Mortgages, executed and delivered by a duly authorized officer of each
party thereto, (iv) the French Security Document, executed and delivered by
a duly authorized officer of each party thereto, (v) the Australian Pledge
Agreement, executed and delivered by a duly authorized officer of each
party thereto, (vi) the U.K. Pledge Agreement executed and delivered by a
duly authorized officer of each party thereto, (vii) the French Pledge
Agreements, and the related statements of pledge (declarations xx xxxx),
executed and delivered by a duly authorized office of each party thereto
and (viii) for the account of each relevant Lender, Notes conforming to the
requirements hereof and executed and delivered by a duly authorized officer
of the Borrower.
52
(b) MERGER, ETC. The following transactions shall have been
consummated, in each case, on terms and conditions reasonably satisfactory
to the Lenders:
(i) The Merger shall have been, or shall be concurrently,
consummated pursuant to the Merger Agreement and all required
stockholder approval to effect the Merger shall have been obtained;
and the Merger Agreement shall not have been amended, supplemented,
waived or otherwise modified in any material respect without the prior
written consent of the Administrative Agent;
(ii) The Exchange Offer shall have been consummated and, after
giving effect to the Exchange Offer and the Merger, the Borrower shall
own, directly or indirectly, at least 90% of the stock of Axiohm S.A.;
and
(iii) The Borrower shall have issued and sold the Senior
Subordinated Notes.
(c) PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the Borrower for the 1994, 1995 and 1996 fiscal
years, (iii) audited consolidated financial statements of Axiohm S.A. for
its 1994, 1995 and 1996 fiscal years and (iv) unaudited interim
consolidated financial statements of the Borrower and Axiohm S.A. for each
fiscal month and quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clauses (ii)
and (iii) of this paragraph as to which such financial statements are
available, and such financial statements shall not, in the reasonable
judgment of the Lenders, reflect any material adverse change in the
consolidated financial condition of the Borrower and its Subsidiaries or
Axiohm S.A. and its Subsidiaries, as reflected in the financial statements
or projections contained in the Confidential Information Memorandum.
(d) APPROVALS. All governmental (including compliance with the H-S-R
Act in respect of the Merger and the Exchange Offer, and any required
French governmental approvals in respect of the Exchange Offer),
shareholder and third party approvals (including debtholders', landlords'
and other consents) reasonably necessary or advisable in connection with
the Merger, the Exchange Offer, the financings contemplated hereby and the
continuing operations of Axiohm S.A., Axiohm-IPB, the Borrower and their
Subsidiaries after the Merger shall have been obtained and be in full force
and effect and all applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the Tender
Offer or the Merger.
(e) RELATED AGREEMENTS. The Administrative Agent shall have received
(in a form reasonably satisfactory to the Syndication Agent), with a copy
for each Lender, true and correct copies, certified as to authenticity by
the Borrower, of the Transaction Documentation and such other documents or
instruments as may be reasonably requested by the Syndication Agent,
including, without limitation, a copy of the Senior
53
Subordinated Note Indenture and any other debt instrument, security
agreement or other material contract to which the Loan Parties may be a
party. The documents and materials filed publicly by Axiohm S.A.,
Acquisition Co. and the Borrower in connection with the Merger shall have
been furnished to the Administrative Agent and shall be reasonably
satisfactory in form and substance.
(f) REFINANCING OF TENDER FACILITY. All obligations of Acquisition
Co. or the Borrower under the Tender Facility shall have been refinanced
with the proceeds of the Facilities and the Senior Subordinated Notes.
(g) FEES. The Lenders, the Syndication Agent and the Administrative
Agent shall have received all fees required to be paid, and all expenses
for which invoices have been presented, on or before the Closing Date.
(h) SOLVENCY ANALYSIS. The Lenders shall have received a
satisfactory solvency opinion from Valuemetrics, Inc., which shall document
the solvency of Axiohm S.A., Axiohm-IPB, the Borrower and each of their
Subsidiaries taken as a whole after giving effect to the Tender Offer, the
Merger and the other transactions contemplated hereby.
(i) INSURANCE. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.5 hereof
and Section 5.3 of the Guarantee and Collateral Agreement.
(j) LIEN SEARCHES. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Borrower or its Subsidiaries except for liens
permitted by Section 7.3.
(k) INDEBTEDNESS, LIENS OR PREFERRED CAPITAL STOCK. Neither
Acquisition Co., the Borrower nor their Subsidiaries shall have any
outstanding Indebtedness, Liens or preferred Capital Stock after giving
effect to the Merger other than such Indebtedness, Liens or preferred
Capital Stock permitted by Sections 7.2 and 7.3.
(l) CLOSING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments.
(m) LEGAL OPINIONS. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of XxXxxxxxx, Xxxx & Xxxxx, counsel to
the Borrower and its Subsidiaries, substantially in the form of
Exhibit F-1;
(ii) the legal opinion of Xxxxxx, Xxxxxxx, Xxxxxxxx & Xxxxxx,
counsel to the Borrower and its Subsidiaries, substantially in the
form of Exhibit F-2;
54
(iii) the legal opinion of Xxxxxxxxx and May, French counsel to
the Borrower and its Subsidiaries, substantially in the form of
Exhibit F-3;
(iv) the legal opinion of special Gide Loyrette Nouel, French
counsel to the Agents and the Lenders, substantially in the form of
Exhibit F-4;
(v) the legal opinion of Xxxxxx Xxxxxx, Esq., Australian
counsel to the Borrower, substantially in the form of Exhibit F-5;
(vi) the legal opinion of Xxxxx & Xxxxx, U.K. counsel to the
Agents and the Lenders, substantially in the form of Exhibit F-6; and
(vii) the legal opinion of Xxxxxx Xxx, P.C., Colorado counsel to
the Borrower and its subsidiaries, substantially in the form of
Exhibit F-7.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Syndication Agent may
reasonably require.
(n) PLEDGED STOCK; STOCK POWERS. The Administrative Agent shall have
received the certificates representing the shares of Capital Stock pledged
pursuant to the Guarantee and Collateral Agreement, the Australian Pledge
Agreement, the French Pledge Agreement and the U.K. Pledge Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof.
(o) FILINGS, REGISTRATIONS AND RECORDINGS. Each document (including,
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation.
(p) MORTGAGES, ETC. (i) The Administrative Agent shall have
received a Mortgage with respect to each Mortgaged Property, executed and
delivered by a duly authorized officer of each party thereto.
(ii) If requested by the Administrative Agent, the Administrative
Agent shall have received, and the title insurance company issuing the
policy referred to in Section 5.1(m)(iii) (the "TITLE INSURANCE COMPANY")
shall have received, maps or plats of an as-built survey of the sites of
the Mortgaged Properties certified to the Administrative Agent and the
Title Insurance Company in a manner satisfactory to them, dated a date
satisfactory to the Administrative Agent and the Title Insurance Company by
an independent professional licensed land surveyor satisfactory to the
Administrative Agent and the Title Insurance Company, which maps or plats
and the surveys on which they are based shall be made in accordance with
the Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title
55
Association and the American Congress on Surveying and Mapping in 1992,
and, without limiting the generality of the foregoing, there shall be
surveyed and shown on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (B) the lines of
streets abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites; (D) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures and
improvements on the sites; (F) if the site is described as being on a filed
map, a legend relating the survey to said map; and (G) the flood zone
designations, if any, in which the Mortgaged Properties are located.
(iii) The Administrative Agent shall have received in respect of each
Mortgaged Property a mortgagee's title insurance policy (or policies) or
marked up unconditional binder for such insurance. Each such policy shall
(A) be in an amount satisfactory to the Administrative Agent; (B) be issued
at ordinary rates; (C) insure that the Mortgage insured thereby creates a
valid first Lien on such Mortgaged Property free and clear of all defects
and encumbrances, except as disclosed therein; (D) name the Administrative
Agent for the benefit of the Lenders as the insured thereunder; (E) be in
the form of ALTA Loan Policy - 1970 (Amended 10/17/70 and 10/17/84) (or
equivalent policies); (F) contain such endorsements and affirmative
coverage as the Administrative Agent may reasonably request and (G) be
issued by title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or reinsurers, at
the option of the Administrative Agent). The Administrative Agent shall
have received evidence satisfactory to it that all premiums in respect of
each such policy, all charges for mortgage recording tax, and all related
expenses, if any, have been paid.
(iv) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance which (1) covers
any parcel of improved real property which is encumbered by any Mortgage
(2) is written in an amount not less than the outstanding principal amount
of the indebtedness secured by such Mortgage which is reasonably allocable
to such real property or the maximum limit of coverage made available with
respect to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (3) has a term ending not
later than the maturity of the Indebtedness secured by such Mortgage and
(B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(v) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in Section 5.1(m)(iii) and a copy of
all other material documents affecting the Mortgaged Properties.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without
56
limitation, its initial extension of credit) is subject to the satisfaction
of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or any Agent hereunder, the Borrower shall and shall cause
each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to each Agent and each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative
form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by KPMG Peat Marwick LLP or other independent
certified public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the case
may be, and disclosed therein).
57
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Agent and
each Lender, or, in the case of clause (g), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's knowledge, each Loan
Party during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) in the case of quarterly or annual
financial statements, (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by the
Borrower and its Subsidiaries with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal year
of the Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent, a listing of any county or state
within the United States where any Loan Party keeps inventory or equipment
and of any Intellectual Property acquired by any Loan Party since the date
of the most recent list delivered pursuant to this clause (y) (or, in the
case of the first such list so delivered, since the Closing Date) the value
of which exceeds $50,000;
(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year, and the related consolidated statements of projected
cash flow, projected changes in financial position and projected income),
and, as soon as available, significant revisions, if any, of such budget
and projections with respect to such fiscal year (collectively, the
"PROJECTIONS"), which Projections shall in each case be accompanied by a
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions as of the time
such Projections were delivered and that such Responsible Officer has no
reasonable basis to believe that such Projections are incorrect or
misleading in any material respect; PROVIDED that such certificate may
state that the Responsible Officer gives no assurance that such Projections
will be achieved;
(d) to the extent approval is required by the Required Lenders
pursuant to Section 7.9, no later than 10 Business Days prior to the
effectiveness thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the
Senior Subordinated Note Indenture;
58
(e) to the extent not previously delivered hereunder, within five
days after the same are sent, copies of all financial statements and
reports which the Borrower sends to the holders of any class of its debt
securities or public equity securities and within five days after the same
are filed, copies of all financial statements and reports which the
Borrower may make to, or file with, the SEC, including any materials filed
in respect of the Exchange Offer or the Merger; and
(f) promptly, such additional financial and other information
regarding the business of the Borrower and its Subsidiaries as they relate
to the Loan Documents as any Lender (through the Administrative Agent) may
from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be,
all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the Borrower or its Subsidiaries, as the case
may be.
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE, ETC. (a)
(i) Subject to Section 7.15, continue to engage in business of the same
general type as now conducted by it, (ii) preserve, renew and keep in full
force and effect its corporate existence and (iii) take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in
the normal conduct of its business, except, in each case, as otherwise
permitted by Section 7.4 and except, in the case of clause (iii) above, to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Subject to Section
7.5, keep all Property useful and necessary in its business in good working
order and condition, ordinary wear and tear excepted and (b) maintain with
financially sound and reputable insurance companies insurance on all its
Property in at least such amounts and against at least such risks (but
including in any event public liability, product liability and business
interruption) as are usually insured against in the same general area by
companies engaged in the same or a similar business.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a)
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities and
(b) permit representatives of any Lender to visit and inspect any of its
properties and examine and make abstracts from any of its books and records
at any reasonable time and as often as may reasonably be desired and, with
reasonable notice, to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with
officers and employees of the Borrower and its Subsidiaries and with its
independent certified public accountants.
6.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender of:
59
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which
in either case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $1,500,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and
(e) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 ENVIRONMENTAL LAWS. (a) (i) Comply with all Environmental
Laws applicable to it, and obtain, comply with and maintain any and all
Environmental Permits necessary for its operations as conducted and as
planned; and (ii) take all reasonable efforts to ensure that all of its
tenants, subtenants, contractors, subcontractors, and invitees comply with
all Environmental Laws, and obtain, comply with and maintain any and all
Environmental Permits, applicable to any of them insofar as any failure to so
comply, obtain or maintain reasonably could be expected to adversely affect
the Borrower or any of its Subsidiaries. For purposes of this Section
6.8(a), noncompliance by the Borrower or any of its Subsidiaries with any
applicable Environmental Law or Environmental Permit shall be deemed not to
constitute a breach of this covenant if, upon learning of any actual or
suspected noncompliance, the Borrower or any applicable Subsidiary shall
promptly undertake all reasonable efforts to achieve compliance, and PROVIDED
that, in any case, such non-compliance, and any other noncompliance with
Environmental Law, individually or in the aggregate, could not reasonably be
expected to give rise to a Material Adverse Effect or materially and
adversely affect the value of any Mortgaged Property.
(b) Promptly comply with all material orders and directives of all
Governmental Authorities regarding Environmental Laws, other than such orders
and directives as to which
60
appropriate proceedings have been timely and properly taken in good faith,
and PROVIDED that the pendency of any and all such proceedings could not
reasonably be expected to give rise to a Material Adverse Effect.
(c) Promptly (and in any case within six months) after the Closing
Date, complete the development of, and implement in all material respects, a
program to promote compliance with and to minimize prudently any liabilities
or potential liabilities under any Environmental Law that may affect the
Borrower or any of its Subsidiaries (the "ENVIRONMENTAL PROGRAM"). The
Environmental Program shall be developed with the assistance of a reputable
independent environmental consulting firm or other independent environmental
professional, in either case, reasonably acceptable to the Agents (an
"ENVIRONMENTAL PROFESSIONAL"). Upon either Agent's request, a reasonably
detailed written description of the Environmental Program shall be provided
to the Agents prior to finalization thereof, after which, upon either Agent's
request, the Borrower and the Environmental Professional involved shall
confer with the Agents concerning the Environmental Program. The Agents
shall have the right, but shall not have any duty, to obtain, review, or
discuss any such description.
(d) Prior to acquiring any ownership or leasehold interest in real
property, or other interest in any real property that could give rise to the
Borrower or any of its Subsidiaries being found an owner, operator, or
otherwise subject to potential liability under any Environmental Law (or any
entity with such interests in any real property): (i) obtain a written report
by a reputable independent environmental consultant reasonably acceptable to
the Agents (an "ENVIRONMENTAL CONSULTANT") of the Environmental Consultant's
assessment of the presence or potential presence of significant levels of any
Materials of Environmental Concern on, in, under, or about such property, or
of other conditions that could give rise to potentially significant liability
under or violations of Environmental Law relating to such acquisition, and
notify the Administrative Agent of such potential acquisition; and (ii) if
requested by the Administrative Agent after learning of such potential
acquisition, provide such report to the Administrative Agent and afford the
Administrative Agent a reasonable opportunity to review and, if requested by
the Administrative Agent, discuss such report with the Environmental
Consultant who prepared it and a knowledgeable representative of the
Borrower. The Administrative Agent shall have the right, but shall not have
any duty, to obtain, review, or discuss any such report.
(e) Promptly upon Administrative Agent's request if there has
occurred or the Administrative Agent reasonably anticipates an Event of
Default, permit an environmental consultant whom the Administrative Agent in
its discretion designates, subject to the approval of the Borrower, which
shall not be unreasonably withheld or delayed, to perform an environmental
assessment (including, without limitation: reviewing documents; interviewing
knowledgeable persons; and sampling and analyzing soil, air, surface water,
groundwater, and/or other media in or about property owned or leased by the
Borrower or any of its Subsidiaries, or on which operations of the Borrower
or any of its Subsidiaries otherwise take place.) Such environmental
assessment shall be in form, scope, and substance reasonably satisfactory to
the Administrative Agent, subject to the approval of the Borrower, which
shall not be unreasonably withheld or delayed. The Borrower or any of its
Subsidiaries shall cooperate fully in the conduct of such environmental
assessment, and shall pay the reasonable costs of such environmental
assessment immediately upon written demand by the Administrative Agent. The
Administrative Agent shall
61
have the right, but shall not have any duty, to request and/or obtain such
environmental assessment.
6.9 INTEREST RATE PROTECTION. In the case of the Borrower, within
60 days after the Closing Date, enter into Interest Rate Protection
Agreements to the extent necessary to provide that at least $20,000,000 in
aggregate principal amount of the Term Loans is subject to either a fixed
interest rate or interest rate protection for a period of not less than two
years, which Interest Rate Protection Agreements shall have terms and
conditions reasonably satisfactory to the Agents.
6.10 ADDITIONAL COLLATERAL, ETC. (a) With respect to any
Property acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than (x) any Property described in paragraph (b), (c) or
(d) below or owned by an Excluded Foreign Subsidiary and (y) any Property
subject to a Lien expressly permitted by Section 7.3(g)) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such supplements or amendments to the Guarantee and Collateral Agreement or
such other documents as the Administrative Agent deems necessary or
reasonably advisable in order to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such Property and (ii) take
all actions necessary or reasonably advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in such Property, including without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent.
(b) With respect to any fee interest in any real estate having a
value (together with improvements thereof) of at least $1,000,000 acquired
after the Closing Date by the Borrower or any of its Subsidiaries (other than
any such real estate subject to a Lien expressly permitted by Section
7.3(g)), promptly (i) execute and deliver a first priority mortgage or deed
of trust, as the case may be, in favor of the Administrative Agent, for the
benefit of the Lenders, covering such real estate, in form and substance
reasonably satisfactory to the Administrative Agent, (ii) if reasonably
requested by the Administrative Agent, provide the Lenders with (x) title and
extended coverage insurance covering such real estate in an amount at least
equal to the purchase price of such real estate (or such other amount as
shall be reasonably specified by the Administrative Agent) as well as a
current ALTA survey thereof, together with a surveyor's certificate and (y)
any consents or estoppels reasonably deemed necessary or reasonably advisable
by the Administrative Agent in connection with such mortgage or deed of
trust, each of the foregoing in form and substance reasonably satisfactory to
the Administrative Agent and (iii) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by the Borrower
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be an Excluded Foreign Subsidiary) or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
supplements or amendments to the Guarantee and Collateral Agreement as the
62
Administrative Agent deems necessary or reasonably advisable in order to
grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary which is owned by the Borrower or any of its Subsidiaries, (ii)
deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement and (B) to take such actions necessary or
reasonably advisable to grant to the Administrative Agent for the benefit of
the Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, including, without limitation, the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be reasonably
requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries or
any Excluded Foreign Subsidiary that existed on the Closing Date which owns
assets with a value in excess of $1,000,000, promptly (i) execute and deliver
to the Administrative Agent such supplements or amendments to the Guarantee
and Collateral Agreement (or, if such Excluded Foreign Subsidiary owns assets
with a value in excess of $1,000,000, such other pledge or security
agreement) as the Administrative Agent deems necessary or reasonably
advisable in order to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in the Capital
Stock of such new Subsidiary which is owned by the Borrower or any of its
Subsidiaries (PROVIDED that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in
blank, executed and delivered by a duly authorized officer of the Borrower or
such Subsidiary, as the case may be, and (iii) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(e) Promptly notify the Administrative Agent if (i) the value of
the plant, property and equipment of the Borrower and its Subsidiaries
located in Mexico exceeds $1,000,000 or (ii) the value of the inventory of
the Borrower and its Subsidiaries located in Mexico exceeds the lesser of (A)
$5,000,000 or (B) 20% of the aggregate worldwide inventory of the Borrower
and its Subsidiaries; and, unless, at such time, the Consolidated Leverage
Ratio as at the last day of the most recent period of four consecutive fiscal
quarters of the Borrower is less than 2.50 to 1.00, take all actions
necessary or reasonably advisable in order to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in such assets, including, without limitation, the establishment and
maintenance of a trust with an independent financial institution for such
purpose.
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6.11 LIMITATION ON DESIGNATED SENIOR DEBT. Designate any
Indebtedness as "Designated Senior Debt" under the Senior Subordinated Note
Indenture.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or any Agent hereunder, the Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to
the Closing Date) ending with any fiscal quarter set forth below to exceed
the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
December 31, 1997 5.50 to 1.00
March 31, 1998 5.50 to 1.00
June 30, 1998 5.50 to 1.00
September 30, 1998 5.25 to 1.00
December 31, 1998 4.75 to 1.00
March 31, 1999 3.50 to 1.00
June 30, 1999 3.50 to 1.00
September 30, 1999 3.50 to 1.00
December 31, 1999 3.50 to 1.00
March 31, 2000 2.50 to 1.00
June 30, 2000 2.50 to 1.00
September 30, 2000 2.50 to 1.00
December 31, 2000 2.50 to 1.00
March 31, 2001 1.50 to 1.00
June 30, 2001 1.50 to 1.00
September 30, 2001 1.50 to 1.00
December 31, 2001 1.50 to 1.00
March 31, 2002 1.50 to 1.00
June 30, 2002 1.50 to 1.00
September 30, 2002 1.50 to 1.00
December 31, 2002 1.50 to 1.00
Thereafter 1.50 to 1.00
; PROVIDED, that for the purposes of determining the ratio described above for
the fiscal quarters of the Borrower ending December 31, 1997, March 31, 1998 and
June 30, 1998, Consolidated
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EBITDA for the relevant period shall be deemed to equal Consolidated EBITDA
for such fiscal quarter (and, in the case of the latter two such
determinations, each previous fiscal quarter commencing after the Closing
Date) MULTIPLIED BY 4, 2 and 4/3, respectively.
(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower (or, if less, the number of full fiscal quarters subsequent to
the Closing Date) ending with any fiscal quarter set forth below to be less
than the ratio set forth below opposite such fiscal quarter:
Consolidated Interest
Fiscal Quarter Coverage Ratio
-------------- ----------------------
December 31, 1997 1.75 to 1.00
March 31, 1998 1.50 to 1.00
June 30, 1998 1.70 to 1.00
September 30, 1998 1.90 to 1.00
December 31, 1998 2.10 to 1.00
March 31, 1999 3.10 to 1.00
June 30, 1999 3.10 to 1.00
September 30, 1999 3.10 to 1.00
December 31, 1999 3.10 to 1.00
March 31, 2000 4.50 to 1.00
June 30, 2000 4.50 to 1.00
September 30, 2000 4.50 to 1.00
December 31, 2000 4.50 to 1.00
March 31, 2001 6.50 to 1.00
June 30, 2001 6.50 to 1.00
September 30, 2001 6.50 to 1.00
December 31, 2001 6.50 to 1.00
March 31, 2002 6.50 to 1.00
June 30, 2002 6.50 to 1.00
September 30, 2002 6.50 to 1.00
December 31, 2002 6.50 to 1.00
Thereafter 6.50 to 1.00
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth
below to be less than the ratio set forth below opposite such fiscal quarter:
65
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
September 30, 1998 1.00 to 1.00
December 31, 1998 1.05 to 1.00
March 31, 1999 1.05 to 1.00
June 30, 1999 1.20 to 1.00
September 30, 1999 1.20 to 1.00
December 31, 1999 1.20 to 1.00
March 31, 2000 1.50 to 1.00
June 30, 2000 1.50 to 1.00
September 30, 2000 1.50 to 1.00
December 31, 2000 1.50 to 1.00
March 31, 2001 1.70 to 1.00
June 30, 2001 1.70 to 1.00
September 30, 2001 1.70 to 1.00
December 31, 2001 1.70 to 1.00
March 31, 2002 1.70 to 1.00
June 30, 2002 1.70 to 1.00
September 30, 2002 1.70 to 1.00
December 31, 2002 1.70 to 1.00
Thereafter 1.70 to 1.00
7.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer
to exist (in each case, to "INCUR") any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness between the Borrower and a Subsidiary or between one
Subsidiary and another; PROVIDED that (a) if the Borrower is the obligor on
such Indebtedness, such Indebtedness is expressly subordinated in
liquidation to the prior payment in full in cash of all Obligations; and
(b) if a Subsidiary that is not a Subsidiary Guarantor is the obligor on
such Indebtedness, such Indebtedness owing to the Borrower or any
Subsidiary Guarantor, together with all intercompany Indebtedness owing
from all Subsidiaries that are not Subsidiary Guarantors to the Borrower or
a Subsidiary Guarantor, does not exceed $5,000,000 in aggregate principal
amount at any time outstanding;
(c) Indebtedness secured by Xxxxx permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $2,000,000 at any one time
outstanding;
(d) Capital Lease Obligations in an aggregate principal amount not to
exceed $5,000,000 at any one time outstanding;
66
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(e) to the Disclosure Letter and any refinancings, refundings,
renewals or extensions thereof (without any increase in the principal
amount thereof);
(f) unsecured Indebtedness of any Loan Party incurred in the ordinary
course of business as a result of open account arrangements or accrued
expenses in current account payables;
(g) Guarantee Obligations of any Indebtedness permitted by this
Section 7.2; and
(h) Indebtedness under Interest Rate Protection Agreements required
by Section 6.9;
(i) Indebtedness in respect of a revolving credit facility (the
"FRENCH REVOLVER") for the purpose of funding the working capital needs in
the ordinary course of business of Axiohm S.A. in French francs; PROVIDED
that (i) the Dollar equivalent (determined in good faith by the Borrower)
of the aggregate outstanding principal amount thereof (the "AXIOHM S.A.
EQUIVALENT OUTSTANDINGS") shall not exceed $10,000,000 at any one time and
(ii) on the date of any incurrence thereof, after giving effect thereto,
the sum of the Axiohm S.A. Equivalent Outstandings and aggregate Revolving
Extensions of Credit of all Revolving Credit Lenders shall not exceed the
aggregate Revolving Credit Commitments of all Revolving Credit Lenders;
PROVIDED, FURTHER, that, for purposes of this clause (ii) only, the undrawn
and unexpired amount of any outstanding Letter of Credit (in a face amount
not to exceed $10,000,000) issued to support obligations under the French
Revolver shall not be deemed to be a Revolving Extension of Credit;
(j) additional Indebtedness of Subsidiaries that are not Subsidiary
Guarantors in an aggregate principal amount at any time outstanding not to
exceed $5,000,000;
(k) guarantees made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of any Subsidiary
Guarantor that is a Domestic Subsidiary; and
(l) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$100,000,000 and (ii) Guarantee Obligations of any Subsidiary Guarantor in
respect of such Indebtedness subordinated to the Obligations to the same
extent as such Indebtedness.
7.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
67
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 30 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) zoning restrictions, easements, rights-of-way, restrictions and
other similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do not in
any case materially detract from the value of the Property subject thereto
or materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f)
to the Disclosure Letter, securing Indebtedness permitted by Section
7.2(e), PROVIDED that no such Lien is spread to cover any additional
Property after the Closing Date and that the amount of Indebtedness secured
thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the acquisition
of fixed or capital assets, PROVIDED that (i) such Liens shall be created
within 90 days of the acquisition of such fixed or capital assets, (ii)
such Liens do not at any time encumber any Property other than the Property
financed by such Indebtedness and (iii) the amount of Indebtedness secured
thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
the Borrower or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased;
(j) Liens arising from precautionary UCC financing statement filings
regarding operating leases or consignment arrangements entered into by the
Borrower or its Subsidiaries in the ordinary course of business;
(k) licenses, sublicenses, leases and subleases permitted hereunder
granted to others not interfering in any material respect in the business
of the Borrower or any of its Subsidiaries;
(l) attachment or judgment Liens which are not outstanding for more
than thirty (30) days in an aggregate amount (not paid or fully covered by
insurance as to which the
68
relevant insurance company has acknowledged coverage) outstanding at any
one time not in excess of $1,000,000;
(m) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business;
and
(n) Liens on property at the time of its acquisition or existing on
property or assets of a Person which becomes a Subsidiary after the date
hereof, PROVIDED that (i) such Liens existed at the time of such
acquisition or at the time such Person became a Subsidiary and were not
created in anticipation thereof, and (ii) any such Lien is not spread to
cover any additional property or assets, including property or assets of
such corporation after the time such corporation becomes a Subsidiary; and
(o) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection with
the importation of goods by the Borrower or its Subsidiaries.
7.4 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of, all or substantially
all of its Property or business, or make any material change in its present
method of conducting business, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (PROVIDED that the Borrower shall be the continuing or
surviving corporation) or with or into any Subsidiary Guarantor that is a
Domestic Subsidiary (PROVIDED that the Subsidiary Guarantor shall be the
continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor that is a Domestic Subsidiary;
(c) the Pre-Merger Transactions and, immediately thereafter (and
substantially concurrently therewith) the Merger, may be consummated, so
long as concurrently therewith all amounts outstanding under the Tender
Facility shall be repaid in full; and
(d) transactions permitted by Section 7.5.
7.5 LIMITATION ON SALE OF ASSETS. Dispose of any of its Property
or business (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to
any Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
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(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Subsidiary Guarantor that is a Domestic Subsidiary;
(e) the licensing and sublicensing of Intellectual Property of the
Borrower and its Subsidiaries in the ordinary course of business;
(f) the leasing or subleasing of real property of the Borrower and
its Subsidiaries in the ordinary course of business;
(g) Dispositions permitted by Section 7.11; and
(h) Asset Sales the Net Cash Proceeds of which are applied toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.10.
7.6 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other
than dividends payable solely in common stock or warrants to purchase common
stock of the Person making such dividend) on, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any
shares of any class of Capital Stock of the Borrower or any Subsidiary or any
warrants or options to purchase any such Capital Stock, whether now or
hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations
of the Borrower or any Subsidiary (collectively, "RESTRICTED PAYMENTS"),
except that:
(a) any Subsidiary may make Restricted Payments to the Borrower or
any Subsidiary Guarantor that is a Domestic Subsidiary;
(b) the Exchange Offer;
(c) (i) as long as no Default or Event of Default shall have occurred
and be continuing, the Borrower may make (including tax indemnification
amounts) Restricted Payments into a trust in connection with the purchase
of vested options on the Borrower's common stock in an amount not to exceed
$2,000,000 as contemplated by the Merger Agreement and (ii) at any time,
such trust may make payments or distributions in accordance with the terms
of the agreements governing the operation of such trust; PROVIDED that in
no event shall the Borrower make Restricted Payments pursuant to this
clause (c) in an amount in excess of $2,000,000; and
(d) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may repurchase its common stock at fair market
value in an amount not to exceed $500,000 during the 1998 and 1999 fiscal
years of the Borrower and $750,000 during the 2000 fiscal year of the
Borrower.
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7.7 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make
(by way of the acquisition of securities of a Person or otherwise) any
Capital Expenditure, except Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding the amount set
forth below with respect to any fiscal year of the Borrower:
Fiscal Year Amount
----------- ------
1997 $3,000,000
1998 $10,500,000
1999 $11,500,000
2000 $12,500,000
2001 $13,500,000
2002 $14,500,000
Thereafter $14,500,000
7.8 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit (by way of guaranty or otherwise) or
capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of or any assets constituting all or a material part of a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Borrower or its
Subsidiaries in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Borrower and its Subsidiaries not to exceed
$500,000 at any one time outstanding;
(e) so long as no Default or Event of Default shall have occurred and
be continuing, the purchase of all or substantially all of the assets of
Saint Maxim, a company organized in Taiwan, for aggregate consideration not
in excess of $250,000;
(f) the Tender Offer and the Pre-Merger Transactions;
(g) investments made by the Borrower or any of its Subsidiaries with
the proceeds of any Reinvestment Deferred Amount;
(h) investments, loans or advances by the Borrower or any of its
Subsidiaries in or to the Borrower or any Person that, prior to such
investment, loan or advance is a Subsidiary Guarantor that is a Domestic
Subsidiary;
(i) cash pledged to the Lenders pursuant to the Loan Documents; and
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(j) investments by the Borrower or its Subsidiaries in Interest Rate
Protection Agreements required by Section 6.9.
7.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS OR MERGER AGREEMENT, ETC. (a) Make or offer to make any
payment, prepayment, repurchase or redemption of or otherwise defease or
segregate funds with respect to the Senior Subordinated Notes (other than
scheduled interest payments required to be made in cash), (b) amend, modify,
waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of (i) the Senior
Subordinated Notes (other than any such amendment, modification, waiver or
other change which (A) would extend the maturity or reduce the amount of any
payment of principal thereof or which would reduce the rate or extend the
date for payment of interest thereon and (B) does not involve the payment of
a consent fee), (ii) the Merger Agreement or (iii) any class of its Capital
Stock or (c) designate any Indebtedness as "Designated Senior Debt" for the
purposes of the Senior Subordinated Note Indenture.
7.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary in the ordinary course of business on fair and
reasonable terms) unless such transaction is (a) otherwise permitted under
this Agreement, (b) in the ordinary course of business of the Borrower or
such Subsidiary, as the case may be, and (c) upon fair and reasonable terms
no less favorable to the Borrower or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person
which is not an Affiliate. Notwithstanding the foregoing, the following
transactions may be consummated: (i) the Tender Offer, the Pre-Merger
Transactions and each of the transactions provided for or described in the
Transaction Documentation, (ii) each of the employment agreements entered
into by any of the Loan Parties and Xxxxxxx Xxxxx or Xxxxxx Xxxxx dated as of
July 14, 1997, (iii) as set forth on Schedule 7.10 to the Disclosure Letter,
(iv) Restricted Payments permitted by Section 7.6, and (v) the payment of
fees and indemnities to directors, officers and employees of the Loan Parties
in the ordinary course of business.
7.11 LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary, except if the Net Cash Proceeds of such sale are applied toward
the prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments pursuant to Section 2.10.
7.12 LIMITATION ON CHANGES IN FISCAL PERIODS. Permit the fiscal
year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
7.13 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into or suffer to
exist or become effective any agreement which prohibits or limits the ability of
the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its Property or
72
revenues, whether now owned or hereafter acquired, other than (a) this
Agreement and the other Loan Documents, (b) any agreements governing any
purchase money Liens or Capital Lease Obligations otherwise permitted hereby
(in which case, any prohibition or limitation shall only be effective against
the assets financed thereby) and (c) the Senior Subordinated Note Indenture.
7.14 LIMITATION ON RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS.
Enter into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Subsidiary of the Borrower to (a) pay
dividends or make any other distributions in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any
other Subsidiary of the Borrower, (b) make loans or advances to the Borrower
or any other Subsidiary of the Borrower or (c) transfer any of its assets to
the Borrower or any other Subsidiary of the Borrower, except for such
encumbrances or restrictions existing under or by reason of (i) any
restrictions existing under the Loan Documents and (ii) any restrictions with
respect to a Subsidiary imposed pursuant to an agreement which has been
entered into in connection with the Disposition of all or substantially all
of the Capital Stock or assets of such Subsidiary otherwise permitted
hereunder.
7.15 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for those businesses in
which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or which are reasonably related or incidental thereto.
7.16 LIMITATION ON ACTIVITIES OF THE DARDEL AND AXIOHM-INV.
Permit Dardel or Axiohm-Inv, notwithstanding anything to the contrary in this
Agreement or any other Loan Document, to (a) conduct, transact or otherwise
engage in, or commit to conduct, transact or otherwise engage in, any
business or operations other than those incidental to its ownership of the
Capital Stock of its Subsidiary, (b) incur, create, assume or suffer to exist
any Indebtedness or other liabilities or financial obligations, except (i)
nonconsensual obligations imposed by operation of law, (ii) pursuant to the
Loan Documents to which it is a party and (iii) obligations with respect to
its Capital Stock (other than any such obligations constituting
Indebtedness), (c) own, lease, manage or otherwise operate any properties or
assets (including cash and cash equivalents) other than the ownership of
shares of Capital Stock of its Subsidiary, (d) create or permit to exist any
Subsidiary other than a wholly owned Subsidiary or (e) directly or
indirectly, convey, sell, transfer of otherwise dispose of, or create,
assume, incur or permit to be created, assumed, incurred or to exist, any
Lien of any kind upon, any Capital Stock of its Subsidiary (except pursuant
to the Loan Documents).
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
73
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (ii) of Section 6.4(a)
(with respect to any Loan Party), Section 6.7(a), Section 7, or Sections
5.6 or 5.8 of the Guarantee and Collateral Agreement or (ii) an "Event of
Default" under and as defined in any Mortgage shall have occurred and be
continuing; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after notice
to the Borrower from the Administrative Agent or the Required Lenders; or
(e) The Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation, but excluding the Loans) beyond the
period of grace (not to exceed 10 days), if any, provided in the instrument
or agreement under which such Indebtedness was created; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace (not to exceed 30 days), if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in
the observance or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is
to cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; PROVIDED, that a default, event or
condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default under this Agreement
unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $1,000,000;
or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other
74
similar official for it or for all or any substantial part of its assets,
or the Borrower or any of its Subsidiaries shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against
the Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
the Borrower or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) of $1,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported
to be created thereby; or
75
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) (i) The Permitted Investors shall cease to own of record and
beneficially an amount of common stock of the Borrower equal to at least
40% of the amount of common stock of the Borrower have voting power for the
election of directors of the Borrower; (ii) any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT")), excluding the Permitted
Investors, shall become, or obtain rights (whether by means or warrants,
options or otherwise) to become, the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly,
of more than 25% of the outstanding common stock of the Borrower; or
(iii) the board of directors of the Borrower shall cease to consist of a
majority of Continuing Directors; or
(l) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated Note
Indenture, or any Loan Party, any Affiliate of any Loan Party, the trustee
in respect of the Senior Subordinated Notes or the holders of at least 25%
in aggregate principal amount of the Senior Subordinated Notes shall so
assert;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries
of the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Majority Revolving Credit
Facility Lenders, the Administrative Agent may, or upon the request of the
Majority Revolving Credit Facility Lenders, the Administrative Agent shall,
by notice to the Borrower declare the Revolving Credit Commitments to be
terminated forthwith, whereupon the Revolving Credit Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without limitation,
all amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit
with respect to which presentment for honor shall not have occurred at the
time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of
such Letters of Credit. Amounts held in such cash collateral account shall
be applied by the Administrative
76
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay other obligations of
the Borrower hereunder and under the other Loan Documents. After all such
Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations
of the Borrower hereunder and under the other Loan Documents shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower (or such other Person as may be lawfully entitled
thereto).
SECTION 9. THE AGENTS
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes each Agent,
in such capacity, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the such Agent by the terms
of this Agreement and the other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, no Agent shall have any duties
or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against any Agent.
9.2 DELEGATION OF DUTIES. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning
all matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it
with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or
provided for in, or received by the Agents under or in connection with, this
Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
or any other Loan Document or for any failure of any Loan Party a party
thereto to perform its obligations hereunder or thereunder. The Agents shall
not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
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9.4 RELIANCE BY ADMINISTRATIVE AGENT. Each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Loan Parties), independent accountants and other experts selected by the
Administrative Agent. The Agents may deem and treat the payee of any Note as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. Each Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders (or, if so
specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and
the other Loan Documents in accordance with a request of the Required Lenders
(or, if so specified by this Agreement, all Lenders), and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and all future holders of the Loans.
9.5 NOTICE OF DEFAULT. No Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder
unless such Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating
that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); PROVIDED that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation
or warranty by any Agent to any Lender. Each Lender represents to the Agents
that it has, independently and without reliance upon any Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
the Loan Parties and their affiliates and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon any Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the
other Loan Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property,
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financial and other condition and creditworthiness of the Loan Parties and
their affiliates. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent
hereunder, no Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party which may
come into the possession of such Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according
to their respective Revolving Credit Percentages, Tranche A Term Loan
Percentages and Tranche B Term Loan Percentages in effect on the date on
which indemnification is sought under this Section 9.7 (or, if
indemnification is sought after the date upon which the Commitments shall
have terminated and the Loans shall have been paid in full, ratably in
accordance with such Percentages immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby
or thereby or any action taken or omitted by such Agent under or in
connection with any of the foregoing; PROVIDED that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements which are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section 9.7 shall
survive the payment of the Loans and all other amounts payable hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in
any kind of business with any Loan Party as though such Agent were not an
Agent. With respect to its Loans made or renewed by it and with respect to
any Letter of Credit issued or participated in by it, each Agent shall have
the same rights and powers under this Agreement and the other Loan Documents
as any Lender and may exercise the same as though it were not an Agent, and
the terms "Lender" and "Lenders" shall include each Agent in its individual
capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or
Section 8(f) with respect to the Borrower shall have occurred and be
continuing) be approved by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term "Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's rights,
powers and duties as
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Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. If no successor agent has
accepted appointment as Administrative Agent by the date that is 30 days
following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall assume and perform all of the duties
of the Administrative Agent hereunder until such time, if any, as the
Required Xxxxxxx appoint a successor agent as provided for above. The
Syndication Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent hereunder, whereupon the
duties, rights, obligations and responsibilities hereunder shall
automatically be assumed by, and inure to the benefit of, the Administrative
Agent, without any further act by the Syndication Agent, the Administrative
Agent or any Lender. After any retiring Agent's resignation as Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement
and the other Loan Documents.
9.10 AUTHORIZATION TO RELEASE LIENS. The Administrative Agent is
hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has
been consented to in accordance with Section 10.1.
9.11 ARRANGER. The Arranger, in its capacity as such, shall not
have any duties or any responsibilities hereunder nor any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Arranger in its capacity as such.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented
or modified except in accordance with the provisions of this Section 10.1.
The Required Lenders and each Loan Party party to the relevant Loan Document
may, or (with the written consent of the Required Lenders) the Agents and
each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders, or the Agents, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and
its consequences; PROVIDED that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend
the final scheduled date of maturity of any Loan, extend the scheduled date
of any amortization payment in respect of any Term Loan, reduce the stated
rate of any interest, fee or letter of credit commission payable hereunder or
extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Lender's Revolving Credit Commitment, in
each case without the consent of each Lender directly affected thereby; (ii)
amend, modify or waive any provision of this Section 10.1 or reduce any
percentage specified in the definition of Required Lenders or Required
Prepayment Lenders, consent to the
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assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or
substantially all of the Collateral or release all or substantially all of
the Subsidiary Guarantors from their obligations under the Guarantee and
Collateral Agreement, in each case without the written consent of all
Lenders; (iii) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Credit Facility set forth in Section
5.2 (including, without limitation, in connection with any waiver of an
existing Default or Event of Default) without the written consent of the
Majority Revolving Credit Facility Lenders; (iv) reduce the percentage
specified in the definition of Majority Facility Lenders without the written
consent of all Lenders under each affected Facility; (v) amend, modify or
waive any provision of Section 9 without the written consent of the Agents;
or (vi) amend, modify or waive any provision of Section 3 without the written
consent of the Issuing Lender. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and
shall be binding upon the Loan Parties, the Lenders, the Administrative Agent
and all future holders of the Loans. In the case of any waiver, the Loan
Parties, the Lenders and the Administrative Agent shall be restored to their
former position and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered, or three Business Days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the Borrower, the
Syndication Agent and the Administrative Agent, and as set forth in an
administrative questionnaire delivered to the Administrative Agent in the
case of the Lenders, or to such other address as may be hereafter notified by
the respective parties hereto:
The Borrower: Axiohm Transaction Solutions, Inc.
00000 Xxxxxx xx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Syndication Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 10285
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, New York 10285
Attention: Xxxxxxx Xxxxxxx
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Telecopy: (000) 000-0000
Telephone: (000) 000-0000
PROVIDED that any notice, request or demand to or upon any of the parties
hereto shall not be effective until received (except in the case of any
notice, request or demand to or upon any of the Loan Parties by any of the
Agents or the Lenders in connection with the exercise of remedies of any of
the Agents or the Lenders pursuant to the Loan Documents or otherwise,
including, without limitation, any notice pursuant to Section 8).
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of the either Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents
and in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans hereunder.
10.5 PAYMENT OF EXPENSES. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agents, (b) to pay or reimburse each Lender and
the Agents for all its costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the fees
and disbursements of counsel (including the allocated fees and expenses of in-
house counsel) to each Lender and of counsel to the Agents, (c) to pay,
indemnify, and hold each Lender and the Agents harmless from, any and all
recording and filing fees or any amendment, supplement or modification of, or
any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Agents and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower any of its Subsidiaries or any of the Properties (all the foregoing
in this clause (d), collectively, the
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"indemnified liabilities"), PROVIDED that the Borrower shall have no
obligation hereunder to any indemnitee with respect to indemnified
liabilities to the extent such indemnified liabilities are found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such indemnitee.
Without limiting the foregoing (including, without limitation, the proviso to
the preceding sentence), and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries to so waive, all
rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee. The agreements in this Section 10.5 shall survive repayment of
the Loans and all other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. 7\E
This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks,
financial institutions or other entities (each, a "PARTICIPANT")
participating interests in any Loan owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the
other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such
Lender shall remain the holder of any such Loan for all purposes under this
Agreement and the other Loan Documents, and the Borrower and the Agents shall
continue to deal solely and directly with such Lender in connection with such
Xxxxxx's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation
have any right to approve any amendment or waiver of any provision of any
Loan Document, or any consent to any departure by any Loan Party therefrom,
except to the extent that such amendment, waiver or consent would reduce the
principal of, or interest on, the Loans or any fees payable hereunder, or
postpone the date of the final maturity of the Loans, in each case to the
extent subject to such participation. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence
of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect
of its participating interest in amounts owing under this Agreement to the
same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, PROVIDED that, in purchasing
such participating interest, such Participant shall be deemed to have agreed
to share with the Lenders the proceeds thereof as provided in Section 10.7(a)
as fully as if it were a Lender hereunder. The Borrower also agrees that
each Participant shall be entitled to the benefits of Sections 2.17, 2.18 and
2.19 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; PROVIDED that, in the
case of Section 2.18, such Participant shall have complied with the
requirements of said Section and
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PROVIDED, FURTHER, that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such
transfer occurred and the Borrower shall not be required to pay a greater
amount.
(c) Any Lender (an "ASSIGNOR") may, in accordance with applicable
law and with written notice to the Syndication Agent, at any time and from
time to time assign to any Lender or any Affiliate thereof or a Person under
common management with such Lender or, with the consent of the Borrower and
the Agents (which, in each case, shall not be unreasonably withheld or
delayed), to an additional bank, financial institution or other entity (an
"ASSIGNEE") all or any part of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance (an "ASSIGNMENT AND
ACCEPTANCE"), substantially in the form of Exhibit E, executed by such
Assignee, such Assignor, the Syndication Agent and the Administrative Agent
(and, where the consent of the Borrower is required pursuant to the foregoing
provisions, by the Borrower) and delivered to the Administrative Agent for
its acceptance and recording in the Register; PROVIDED that no such
assignment to an Assignee (other than any Lender or any Affiliate thereof)
shall be in an aggregate principal amount of less than $5,000,000 (other than
in the case of an assignment of all of a Lender's interests under this
Agreement), unless otherwise agreed by the Borrower, the Syndication Agent
and the Administrative Agent. Any such assignment need not be ratable as
among the Facilities. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder with a Commitment and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this Section 10.6, the consent of the
Borrower shall not be required for any assignment which occurs at any time
when any of the events described in Section 8(f) shall have occurred and be
continuing.
(d) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "REGISTER") for the recordation of the
names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time and any Notes
evidencing such Loans. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative Agent and
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Loan and any Note evidencing such Loan recorded therein for
all purposes of this Agreement. Any assignment of any Loan whether or not
evidenced by a Note shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Loan evidenced by a
Note shall be registered on the Register only upon surrender for registration
of assignment or transfer of the Note evidencing such Loan, accompanied by a
duly executed Assignment and Acceptance, and thereupon one or more new Notes
in the same aggregate principal amount shall be issued to the designated
Assignee and the old Notes shall be returned by the Administrative Agent to
the Borrower marked "cancelled". The Register shall be
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available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof or a Person under common management
with such Lender, by the Borrower, the Administrative Agent, the Syndication
Agent and the Issuing Lender) together with payment to the Administrative
Agent of a registration and processing fee of $2,000 (except that no such
registration and processing fee shall be payable (y) in connection with an
assignment by Xxxxxx Commercial Paper Inc. or (z) in the case of an Assignee
which is already a Lender or is an affiliate of a Lender or a Person under
common management with a Lender), the Administrative Agent shall (i) promptly
accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders
and the Borrower. On or prior to such effective date, the Borrower, at its
own expense, upon request, shall execute and deliver to the Administrative
Agent (in exchange for the Revolving Credit Note and/or Term Notes, as the
case may be, of the assigning Lender) a new Revolving Credit Note and/or Term
Notes, as the case may be, to the order of such Assignee in an amount equal
to the Revolving Credit Commitment and/or applicable Term Loans, as the case
may be, assumed or acquired by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Revolving Credit Commitment
and/or Term Loans, as the case may be, upon request, a new Revolving Credit
Note and/or Term Notes, as the case may be, to the order of the assigning
Lender in an amount equal to the Revolving Credit Commitment and/or
applicable Term Loans, as the case may be, retained by it hereunder. Such
new Notes shall be dated the Closing Date and shall otherwise be in the form
of the Note replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments
of Loans and Notes relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests,
including, without limitation, any pledge or assignment by a Lender of any
Loan or Note to any Federal Reserve Bank in accordance with applicable law.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "BENEFITTED LENDER") shall at any time
receive any payment of all or part of its Loans or the Reimbursement Obligations
owing to it, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans or the Reimbursement
Obligations owing to such other Lender, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan and/or of the Reimbursement
Obligations owing to each such other Lender, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED that if all or any portion of such excess payment or benefits is
thereafter recovered from such
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Benefitted Lender, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, upon the occurrence and during the
continuance of an Event of Default, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured, at
any time held or owing by such Lender or any branch or agency thereof to or
for the credit or the account of the Borrower. Each Lender agrees promptly
to notify the Borrower and the Administrative Agent after any such setoff and
application made by such Lender, PROVIDED that the failure to give such
notice shall not affect the validity of such setoff and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower
and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or
any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general
86
jurisdiction of the Courts of the State of New York, the courts of the
United States for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in Section 10.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 10.12 any special, exemplary, punitive or consequential
damages.
10.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 CONFIDENTIALITY. Each of the Agents and each Lender agrees to
keep confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; PROVIDED that nothing herein
87
shall prevent any Agent or any Lender from disclosing any such information
(a) to the Administrative Agent, any other Lender or any affiliate of any
Lender, (b) to any Participant or Assignee (each, a "TRANSFEREE") or
prospective Transferee which agrees to comply with the provisions of this
Section 10.15, (c) to the employees, directors, agents, attorneys,
accountants and other professional advisors of such Lender or its affiliates,
(d) upon the request or demand of any Governmental Authority having
jurisdiction over the such Agent or such Lender, (e) in response to any order
of any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (f) if requested or required to do so in
connection with any litigation or similar proceeding, (g) which has been
publicly disclosed other than in breach of this Section 10.15, (h) to the
National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender, or (i) in connection with the exercise of
any remedy hereunder or under any other Loan Document.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
AXIOHM TRANSACTION SOLUTIONS, INC.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER INC., as
Syndication Agent and as a Lender
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Name:
Title:
XXXXXX COMMERCIAL PAPER INC., as
Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxx
-------------------------------------
Name:
Title:
Annex A
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PRICING GRID FOR REVOLVING CREDIT LOANS AND
TRANCHE A TERM LOANS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Consolidated Leverage Ratio Applicable Margin Applicable Margin
for Eurodollar for Base Rate
Loans Loans
--------------------------------------------------------------------------------
Greater than or equal to 3.50 to 1.00 2.50% 1.50%
--------------------------------------------------------------------------------
Less than 3.50 to 1.00 but greater than 2.25% 1.25%
or equal to 3.00 to 1.00
--------------------------------------------------------------------------------
Less than 3.00 to 1.00 but greater than 2.00% 1.00%
or equal to 2.50 to 1.00
--------------------------------------------------------------------------------
Less than 2.50 to 1.00 1.75% 0.75%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Changes in the Applicable Margin with respect to Revolving Credit Loans and
Tranche A Term Loans resulting from changes in the Consolidated Leverage
Ratio shall become effective on the date (the "ADJUSTMENT DATE") on which
financial statements are delivered to the Lenders pursuant to Section 6.1
(but in any event not later than the 45th day after the end of each of the
first three quarterly periods of each fiscal year or the 90th day after the
end of each fiscal year, as the case may be) and shall remain in effect until
the next change to be effected pursuant to this paragraph. If any financial
statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Consolidated Leverage Ratio as at the end of the fiscal period that would
have been covered thereby shall for the purposes of this definition be deemed
to be greater than 3.50 to 1.00. In addition, at all times while an Event of
Default shall have occurred and be continuing, the Consolidated Leverage
Ratio shall for the purposes of this definition be deemed to be greater than
3.50 to 1.00. Each determination of the Consolidated Leverage Ratio pursuant
to this definition shall be made with respect to the period of four
consecutive fiscal quarters of the Borrower ending at the end of the period
covered by the relevant financial statements.
