CREDIT AGREEMENT
THIS
CREDIT AGREEMENT (this
"Agreement") is entered into as of September 27, 2007, by and between INTERMEC,
INC., a Delaware corporation ("Borrower"), and XXXXX FARGO BANK, NATIONAL
ASSOCIATION ("Bank").
RECITALS
Borrower
has requested that Bank
extend or continue credit to Borrower as described below, and Bank has agreed
to
provide such credit to Borrower on the terms and conditions contained
herein. NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bank and Borrower hereby agree
as
follows:
ARTICLE
I CREDIT TERMS
SECTION
1.1. LINE OF
CREDIT.
(a) Line
of
Credit. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to Borrower from time to time up to and
including October 1, 2012, not to exceed at any time the aggregate principal
amount of Fifty Million Dollars ($50,000,000.00) ("Line of Credit"), the
proceeds of which shall be used to finance Borrower’s working capital
requirements and general corporate purposes. Borrower's obligation to
repay advances under the Line of Credit shall be evidenced by a promissory
note
dated as of September 27, 2007 ("Line of Credit Note"), all terms of which
are
incorporated herein by this reference.
(b) Letter
of Credit
Subfeature. As a subfeature under the Line of Credit, Bank agrees
from time to time during the term thereof to issue or cause an affiliate
to
issue standby and/or sight commercial letters of credit denominated in Dollars
and Alternative Currencies for the account of Borrower (each, a "Letter of
Credit" and collectively, "Letters of Credit"). The form and
substance of each Letter of Credit shall be subject to approval by Bank,
in its
reasonable discretion. No Letter of Credit shall have an expiration
date subsequent to the maturity date of the Line of Credit. The
undrawn amount of all Letters of Credit shall be reserved under the Line
of
Credit and shall not be available for borrowings thereunder. The
amount reserved for each Alternative Currency denominated Letter of Credit
shall
be the most recent Dollar Equivalent Amount of such Letter of Credit as
determined at least once each calendar week. Each Letter of Credit
shall also be subject to the terms and conditions of that certain Amended
and
Restated Letter of Credit Agreement dated as of the date hereof between Bank
and
Borrower (as the same may be amended from time to time the “LC Agreement”), each
application for the issuance of a Letter of Credit (an “LC Application”), and
any related documents required by Bank in connection with the issuance
thereof. If the terms or conditions of the LC Agreement or any LC
Application or any related document required by Bank in connection with the
issuance of a Letter of Credit contradict any terms or conditions in this
Agreement, the terms and conditions in this Agreement will
control. Each drawing paid under a Letter of Credit by Bank shall be
deemed an advance under the Line of Credit and shall be repaid by Borrower
in
accordance with the terms and conditions of this Agreement applicable to
such
advances; provided, however, that if advances under the Line of Credit are
not
available, for any reason, at the time any drawing is paid, then Borrower
shall
immediately pay to Bank the full amount so paid, together with interest thereon
from the date such drawing is paid to the date such amount is fully repaid
by
Borrower, at the rate of interest applicable to advances under the Line of
Credit. In such event Borrower agrees that Bank, in its sole
discretion, may debit any account maintained by Borrower with Bank for the
amount of any such drawing and such interest. Borrower hereby affirms
its obligations to Bank in connection with standby letter of credit number
NWS604166 previously issued by Bank for the account of Borrower and for the
benefit of Pacific Employers Insurance Company and under the application
for
such letter of credit, which letter of credit is outstanding on the date
hereof
and shall be deemed included in the definition of Letter of Credit set forth
herein and be subject to the terms hereof and the LC Agreement.
(c) Borrowing
and
Repayment. Borrower may from time to time during the term of the
Line of Credit borrow, partially or wholly repay its outstanding borrowings,
and
reborrow, subject to all of the limitations, terms and conditions contained
herein or in the Line of Credit Note; provided however, that the total
outstanding borrowings under the Line of Credit shall not at any time exceed
the
maximum principal amount available thereunder, as set forth above.
SECTION
1.2. INTEREST/FEES.
(a) Interest. The
outstanding principal balance of the Line of Credit shall bear interest,
at the
rate of interest set forth in the Line of Credit Note. The amount of
each drawing paid under any Letter of Credit shall be an advance under the
Line
of Credit and shall bear interest at the Prime Rate (as defined in the Line
of
Credit Note) from the date such drawing is paid to the date such amount is
fully
repaid by Borrower.
(b) Computation
and
Payment. LIBOR-based interest shall be computed on the basis of a
360-day year, actual days elapsed. Prime Rate interest shall be
computed on the basis of a 365 or 366-day year, as the case may
be. Interest shall be payable at the times and place set forth in
each promissory note or other instrument or document required
hereby.
(c) Letter
of Credit
Fees. Letter of Credit Fees. Borrower shall pay to
Bank the following fees with respect to the Letters of Credit: (i)
Borrower will pay a commission fee on each standby Letter of Credit quarterly
in
arrears starting on the last Business Day of the quarter in which each such
standby Letter of Credit is issued, and on the last Business Day of each
quarter
thereafter during the term of each such Letter of Credit, and ending on the
date
each such Letter of Credit expires, with such fee being equal to the Applicable
Rate per annum (computed on the basis of a 360-day year, actual days elapsed)
during each day of such full or partial quarterly payment period applied
to the
outstanding face amount of such Letter of Credit on each such day, (ii) Borrower
will pay an issuance fee on each commercial Letter of Credit in advance on
the
date each commercial Letter of Credit is issued, increased and extended,
with
such fee being one eighth of one percent (0.125%), with a minimum of $175.00,
applied to the outstanding face amount of each commercial Letter of Credit
on
the date it is issued and extended and on the amount of any increase in a
commercial Letter of Credit on the date it is increased; with the understanding
that no such commercial Letter of Credit fee shall be refunded to Borrower
if a
commercial Letter of Credit’s initially scheduled or later extended expiration
date is moved forward by amendment or cancellation or if such commercial
Letter
of Credit is fully or partially drawn down before its initially scheduled
or
later extended expiration date, (iii) Borrower will pay fees upon the handling
and processing of each drawing under any Letter of Credit, and (iv) Borrower
will pay fees upon the occurrence of any other activity with respect to any
Letter of Credit (including without limitation, any amendment, assignment
of
drawing proceeds, transfer of drawing rights, or cancellation of any Letter
of
Credit), which fees, in the case of clauses (iii) and (iv) of this Section
1.2(c), will be determined in accordance with Bank's standard fees and charges
then in effect for such activity.
(d) Unused
Commitment
Fee. Borrower shall pay to Bank a fee equal to the Applicable
Rate per annum (computed on the basis of a 360-day year, actual days elapsed)
on
the average daily unused amount of the Line of Credit, which fee shall be
calculated on a quarterly basis by Bank and shall be due and payable by Borrower
in arrears within ten (10) Business Days of Borrower’s receipt of Bank’s
invoice.
SECTION
1.3. GUARANTIES. The payment and performance of all
indebtedness and other obligations of Borrower to Bank shall be guaranteed
jointly and severally by each of the following Subsidiaries of Borrower:
Intermec IP Corp., Intermec Technologies Corporation, and Intermec Technologies
Manufacturing, LLC (each of the foregoing, and each Subsidiary that hereafter
becomes a guarantor of Borrower’s obligations to Bank, a “Subsidiary
Guarantor”), as evidenced by and subject to the terms of the applicable
Continuing Guaranty executed by such Subsidiary in favor of Bank dated as
of the
date hereof (or the subsequent date as of which such Subsidiary becomes a
Subsidiary Guarantor).
SECTION
1.4. CERTAIN
DEFINED TERMS.
“Alternative
Currency” means any
currency, other than Dollars routinely offered by Bank to its commercial
customers.
“Applicable
Rate,” on the date hereof,
means with respect to LIBOR-based advances and standby Letters of Credit,
0.60%,
with respect to Prime Rate advances, -1.00%, and with respect to the Unused
Fee
0.125%. Bank shall adjust the Applicable Rate on a quarterly basis,
subject to the paragraph immediately following the grid below, commencing
with
the financial statements for Borrower's fiscal quarter ending March 31, 2008,
if
required to reflect a change in Borrower's ratio of Total Funded Debt to
EBITDA
(as defined in Section 4.9(b)), in accordance with the following
grid:
|
Total
Funded Debt to EBITDA
|
“Applicable
Rate” LIBOR and standby Letters of Credit
|
“Applicable
Rate” Prime Rate
|
“Applicable
Rate”
Unused
Fee
|
|
1.5
to 1.0 or greater
|
1.0%
|
-0.25%
|
0.20%
|
|
1.0
to 1.0 or greater but less than 1.5 to 1.0
|
0.875%
|
-0.50%
|
0.175%
|
|
0.50
to 1.0 or greater but less than 1.0 to 1.0
|
0.75%
|
-0.75%
|
0.15%
|
|
less
than 0.50 to 1.0
|
0.60%
|
-1.00%
|
0.125%
|
Each
quarterly adjustment shall be effective on the first Business Day of month
following the month during which Bank receives Borrower's most current fiscal
quarter-end financial statements contained in Borrower’s 10K or 10Q report filed
with the Securities and Exchange Commission (“SEC”).
“Business
Day" means any day except a
Saturday, Sunday or any other day on which commercial banks in California
are
authorized or required by law to close.
“Dollars”
and
the symbol “$” means
lawful money of the United States.
“Dollar Equivalent Amount” means, at any time, with respect to any amount
denominated in an Alternative Currency, the equivalent amount thereof in
Dollars
as determined by Bank at such time on the basis of the current rate quoted
by
the Bank for the immediate purchase and settlement of an Alternative Currency
(determined in respect of the most recent Revaluation Date); provided, however,
that if on any Revaluation Date Borrower is party to a currency hedge agreement
with Bank applicable to the relevant Alternative Currency, and the term of
such
hedge agreement expires on or after the next Revaluation Date, the Dollar
Equivalent Amount with respect to such Alternative Currency shall be equal
to
the hedged rate reflected in such currency hedge agreement.
“LIBOR”
has
the meaning defined in the
Line of Credit Note.
“Loan
Documents” means
this Agreement, the LC Agreement, the LC Applications, and each promissory
note,
contract, instrument and other document required hereby or at any time hereafter
delivered to Bank in connection herewith.
“Material
Adverse
Effect” means (a) a material adverse effect on the business, properties,
operations or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole, (b) a material impairment of Borrower’s ability
to repay its obligations to Bank, (c) a material adverse effect on the legality,
validity or enforceability of this Agreement or the other Loan
Documents.
“Other
Assets” means all
assets now owned or hereafter acquired by Borrower or any of its Subsidiaries,
excluding Restricted Assets.
“Permitted
Liens” means
such of the following as to which no enforcement, collection, execution,
levy or
foreclosure proceeding shall have been commenced: (a) liens described on
Schedule 1 attached hereto and incorporated herein by reference, (b) liens
for
taxes, assessments and governmental charges or levies not yet due and payable;
(c) liens imposed by law, such as materialmen’s, mechanics, carriers,
landlord’s, workmen’s and repairmen’s liens and other similar common law and
statutory liens arising in the ordinary course of Borrower’s business securing
obligations that are not overdue for a period of more than 30 days; (d) pledges
or deposits to secure obligations unemployment insurance, under workers’
compensation, labor or pension laws or similar legislation or to secure public
or statutory obligations; (e) zoning or deed restrictions, easements, rights
of
way and other encumbrances on title to real property that do not render title
to
the property encumbered thereby unmarketable or materially adversely affect
the
use of such property for its present purposes; (f) purchase money liens or
capital leases on assets acquired by Borrower or any Subsidiary in the ordinary
course of business provided that each such lien attaches to the acquired
property concurrently with its acquisition and the principal amount of all
indebtedness secured by such purchase money liens shall not exceed at any
time
in the aggregate $(20,000,000.00); (g) any lien which arises in connection
with
judgments or attachments (i) the occurrence of which does not constitute
an
Event of Default and (ii) the execution or other enforcement of such lien
is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings; (h) deposits or cash pledges
securing performance of contracts, bids, tenders, leases, statutory obligations,
surety and appeal bonds (other than contracts for the payment of indebtedness
for borrowed money) arising in the ordinary course of business; (i) any transfer
of a check or other medium of payment for deposit or collection, or any similar
transaction in the ordinary course of business; and (j) liens for security
deposits to secure the performance of operating leases and deposits received
from customers, in each case, in the ordinary course of business.
“Prime
Rate” has the
meaning defined in the Line of Credit Note.
“Responsible
Officer”
means, with respect to Borrower or any Subsidiary Guarantor, the president,
chief executive officer, chief financial officer or the treasurer of Borrower,
or such Subsidiary Guarantor, as applicable.
“Restricted
Assets”
means all accounts receivable, inventory and intellectual property now owned
or
hereafter acquired by Borrower or any Subsidiary Guarantor.
“Revaluation
Date” means each of the
following: (a) with respect to any Letter of Credit denominated in an
Alternative Currency, the date on which such Letter of Credit is issued,
each
date on which such Letter of Credit is increased or decreased, and the first
Business Day of each week thereafter while such Letter of Credit is outstanding,
and (b) such additional dates as Bank may determine during the continuance
of an
Event of Default.
“Subsidiary”
means,
in respect of
Borrower, a corporation or other business entity the shares (or other equity
interests) constituting a majority of the outstanding capital stock (or other
form of ownership) or constituting a majority of the voting power in any
election of directors (or shares constituting both majorities) of which are
(or
upon the exercise of any outstanding warrants, options or other rights would
be)
owned directly or indirectly at the time in question by such entity or another
subsidiary of such entity or any combination of the foregoing.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
Borrower
makes the following
representations and warranties to Bank, which representations and warranties
shall survive the execution of this Agreement and shall continue in full
force
and effect until the full and final payment, and satisfaction and discharge,
of
all obligations of Borrower to Bank subject to this Agreement.
SECTION
2.1. LEGAL
STATUS. Borrower and each Subsidiary is duly organized and existing
and in good standing under the laws of its respective jurisdiction of
organization, and is qualified or licensed to do business (and is in good
standing as a foreign corporation, if applicable) in all jurisdictions in
which
such qualification or licensing is required or in which the failure to so
qualify or to be so licensed could have a Material Adverse Effect.
SECTION
2.2. AUTHORIZATION
AND VALIDITY. The Loan Documents have been duly authorized, and upon
their execution and delivery in accordance with the provisions hereof will
constitute legal, valid and binding agreements and obligations of Borrower
or
the Subsidiary Guarantor that executes the same, enforceable in accordance
with
their respective terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor’s rights generally and by general equitable principals, whether
enforcement is sought by proceedings in equity or at law.
SECTION
2.3. NO
VIOLATION. The execution, delivery and performance by Borrower or a
Subsidiary Guarantor, as applicable, of each of the Loan Documents executed
by
such party do not violate any provision of any law or regulation, or contravene
any provision of the Articles of Incorporation or By-Laws or other operative
formation or governing documents of Borrower or such Subsidiaries, or result
in
any breach of or default under any contract, obligation, indenture or other
instrument to which Borrower or any such Subsidiary is a party or by which
Borrower or any such Subsidiary may be bound, except, in each case, where
such
violation, contravention, breach or default could not reasonably be expected
to
have a Material Adverse Effect.
SECTION
2.4. LITIGATION. Except as set forth Schedule 2.4, there
are no pending, or to the best of Borrower's knowledge threatened, actions,
claims, investigations, suits or proceedings against Borrower or any Subsidiary
by or before any governmental authority, arbitrator, court or administrative
agency, which, in each case, are expected, in the reasonable judgment of
the
Borrower, to have a Material Adverse Effect.
SECTION
2.5. CORRECTNESS
OF FINANCIAL STATEMENT. The annual consolidated financial statement
of Borrower dated December 31, 2006, and all interim financial statements
delivered to Bank since said date, true copies of which have been delivered
by
Borrower to Bank prior to the date hereof, (a) present fairly in all material
respects the financial condition of Borrower and its Subsidiaries on a
consolidated basis, (b) disclose all liabilities of Borrower that are required
to be reflected or reserved against under generally accepted accounting
principles (“GAAP”), whether liquidated or unliquidated, fixed or contingent,
and (c) have been prepared in accordance with GAAP consistently applied,
subject, in the case of unaudited financial statements to changes resulting
from
audit and normal year-end adjustments and the absence of footnote disclosure
required in accordance with GAAP. Since the dates of such financial
statements there has been no Material Adverse Effect.
SECTION
2.6. INCOME TAX
RETURNS. Borrower has no knowledge of any pending material
assessments or adjustments of its or any Subsidiary Guarantor’s income tax
payable with respect to any year.
SECTION
2.7. NO
SUBORDINATION. There is no agreement, indenture, contract or
instrument to which Borrower or any Subsidiary Guarantor is a party or by
which
Borrower or any Subsidiary Guarantor may be bound that requires the
subordination in right of payment of any of Borrower's or any Subsidiary
Guarantor’s obligations subject to this Agreement or any other Loan Document to
any other obligation of Borrower or any Subsidiary Guarantor.
SECTION
2.8. PERMITS,
FRANCHISES. Borrower and each Subsidiary possesses, and will
hereafter possess, all permits, consents, approvals, franchises and licenses
required and rights to all trademarks, trade names, patents, and fictitious
names, if any, necessary to enable it to conduct the business in which it
is now
engaged in compliance with applicable law, except, where failure to possess
the
same individually or in the aggregate could not reasonably be expected to
result
in a Material Adverse Effect.
SECTION
2.9. ERISA. Except as would not reasonably be expected to
have a Material Adverse Effect, (i) with respect to each Plan (as defined
below), Borrower and each Subsidiary is in compliance with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
or
recodified from time to time ("ERISA"); (ii) Borrower has not violated any
provision of any defined benefit plan (as defined in ERISA) maintained or
contributed to by Borrower or any Subsidiary (each, a "Plan"); (iii) no
“reportable event” (as defined in Section 4043 of ERISA, but excluding any event
for which the 30-day notice requirement is waived, a “Reportable Event”) has
occurred and is continuing with respect to any Plan; and (iv) Borrower and
each Subsidiary has met its minimum funding requirements under ERISA with
respect to each Plan.
SECTION
2.10. OTHER
OBLIGATIONS. Neither Borrower nor any Subsidiary is in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation, except, where
such defaults, individually or in the aggregate could not reasonably be expected
to result in a Material Adverse Effect.
SECTION
2.11. ENVIRONMENTAL MATTERS. Except as disclosed by
Borrower to Bank in writing prior to Borrower’s execution of this Agreement,
Borrower and each domestic Subsidiary is in compliance in all material respects
with all applicable federal or state environmental, hazardous waste, health
and
safety statutes, and any rules or regulations adopted pursuant thereto, which
govern or affect any of Borrower's or any such Subsidiary’s operations and/or
properties, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Superfund Amendments
and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery
Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same
may be
amended, modified or supplemented from time to time, except for any
noncompliance which, when taken singly or with all other such noncompliance,
has
not resulted, and could not reasonably be expected to result in a Material
Adverse Effect. None of the operations of Borrower or any Subsidiary
is the subject of any federal or state investigation evaluating whether any
remedial action involving a material expenditure is needed to respond to
a
release of any toxic or hazardous waste or substance into the environment
that
could reasonably be expected to result in a Material Adverse
Effect. Neither Borrower nor any Subsidiary has any material
contingent liability in connection with any release of any toxic or hazardous
waste or substance into the environment that could reasonably be expected
to
result in a Material Adverse Effect.
ARTICLE
III
CONDITIONS
SECTION
3.1. CONDITIONS OF
INITIAL EXTENSION OF CREDIT. Bank’s initial extension of any credit
contemplated by this Agreement is subject to the fulfillment to Bank's
satisfaction (or waiver) of all of the following conditions:
(a) Approval
of Bank
Counsel. All legal matters incidental to the extension of credit
by Bank shall be reasonably satisfactory to Bank's counsel.
(b) Documentation. Bank
shall have received, in form and substance reasonably satisfactory to Bank,
each
of the following, duly executed:
|
|
(i)
|
This
Agreement, the LC Agreement and the Line of Credit
Note.
|
|
|
(ii)
|
Certificate
of Incumbency from Borrower and each Subsidiary
Guarantor.
|
|
|
(iii)
|
Corporate
Resolution: Continuing Guaranty from each Subsidiary Guarantor
that is a
corporation.
|
|
|
(iv)
|
Corporate
Resolution: Borrowing from
Borrower.
|
|
|
(v)
|
Continuing
Guaranty from each Subsidiary Guarantor existing as of the date
hereof.
|
|
|
(vi)
|
Limited
Liability Company Certificate: Continuing Guaranty from ITM,
LLC.
|
(c) Financial
Condition. There shall have been no material adverse change, as
reasonably determined by Bank, in the financial condition or business of
Borrower and its Subsidiaries (taken as a whole).
SECTION
3.2. CONDITIONS OF
EACH EXTENSION OF CREDIT. The obligation of Bank to make each
extension of credit requested by Borrower hereunder shall be subject to the
fulfillment to Bank's satisfaction (or waiver) of each of the following
conditions:
(a) Compliance. The
representations and warranties contained herein and in each of the other
Loan
Documents shall be true in all material respects on and as of the date of
the
signing of this Agreement and on the date of each extension of credit by
Bank
pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date,
no
Event of Default as defined herein, and no condition, event or act which
with
the giving of notice or the passage of time or both would constitute such
an
Event of Default, shall exist or have occurred and be continuing.
(b) Additional Letter of Credit
Documentation. Prior to the issuance of each Letter of Credit,
Bank shall have received the LC Application for such Letter of Credit and
any
other Letter of Credit documents required by Bank, all properly completed
and
duly executed by Borrower.
(c) No
Material Adverse
Change. As of the date of the extension of credit, and before and
after giving effect thereto, there shall have been no event which has had,
or
could reasonably be expected to have a Material Adverse Effect.
ARTICLE
IV
AFFIRMATIVE
COVENANTS
Borrower
covenants that so long as
Bank remains committed to extend credit to Borrower pursuant hereto, or any
liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and
until
payment in full of all obligations of Borrower subject hereto, Borrower shall,
and shall cause each Subsidiary Guarantor (or, where indicated, each Subsidiary)
to, unless Bank otherwise consents in writing:
SECTION
4.1. PUNCTUAL
PAYMENTS. Punctually pay all principal, interest, fees or other
liabilities due under any of the Loan Documents at the times and place and
in
the manner specified therein.
SECTION
4.2. ACCOUNTING
RECORDS. Maintain adequate books and records in accordance with GAAP
consistently applied, and permit any representative of Bank, at any reasonable
time upon reasonable prior written notice, to inspect, audit and examine
such
books and records, to make copies of the same, and to inspect the properties
of
Borrower or any Subsidiary.
SECTION
4.3. FINANCIAL
STATEMENTS. Provide to Bank all of the following, in form and detail
satisfactory to Bank:
(a) not
later than 120
days after and as of the end of each fiscal year, an annual projection of
budget
of Borrower and its Subsidiaries;
(b) not
later than 120
days after and as of the end of each fiscal year, a 10K report filed with
the
Security Exchange Commission;
(c) not
later than 45 days
after and as of the end of each fiscal quarter, a 10Q report filed with the
Security Exchange Commission;
(d) contemporaneously
with
each annual and quarterly financial statement of Borrower required hereby,
a
certificate of the president or chief financial officer or treasurer of Borrower
that said financial statements are accurate and that there exists no Event
of
Default nor any condition, act or event which with the giving of notice or
the
passage of time or both would constitute an Event of Default, or if an Event
of
Default or Default exists, a description thereof;
(e) from
time to time such
other information as Bank may reasonably request.
SECTION
4.4. COMPLIANCE. Except as could not reasonable be
expected to have a Material Adverse Effect, preserve and maintain all licenses,
permits, governmental approvals, rights, privileges and franchises necessary
for
the conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower or any Subsidiary is organized and/or which govern
Borrower's or any Subsidiary’s continued existence and with the requirements of
all laws, rules, regulations and orders of any governmental authority applicable
to Borrower, Borrower’s Subsidiaries and/or their respective
businesses.
SECTION
4.5. INSURANCE. Maintain and keep in force, for each
business in which Borrower and each Subsidiary Guarantor is engaged, insurance
of the types and in amounts customarily carried in similar lines of business,
with all such insurance carried with companies and in amounts consistent
with
those maintained by Borrower and the Subsidiary Guarantors on the date hereof
with such changes as determined by Borrower in its reasonable business judgment
subject to disclosure and approval of current insurance details/certificates,
and deliver to Bank from time to time at Bank's request schedules setting
forth
all insurance then in effect.
SECTION
4.6. FACILITIES. Except as could not reasonable be
expected to have a Material Adverse Effect, keep all material properties
useful
or necessary to Borrower's and each Subsidiary’s business in good repair and
condition, ordinary wear and tear excepted, and from time to time make necessary
repairs, renewals and replacements thereto so that such properties shall
be
fully and efficiently preserved and maintained.
SECTION
4.7. TAXES AND
OTHER LIABILITIES. Pay and discharge when due any and all material
assessments and taxes, both real or personal, including without limitation
federal and state income taxes and state and local property taxes and
assessments, except (a) such as Borrower or any Subsidiary Guarantor may
in good
faith contest or as to which a bona fide dispute may arise, and (b) for which
Borrower or any Subsidiary Guarantor has made provision for appropriate reserves
in accordance with GAAP.
SECTION
4.8. LITIGATION. Promptly give notice in writing to Bank
of any litigation pending or threatened against Borrower or any Subsidiary
that
could have a Material Adverse Effect.
SECTION
4.9. FINANCIAL
CONDITION. Maintain Borrower's consolidated financial condition as
follows using GAAP consistently applied and used consistently with prior
practices (except to the extent modified by the definitions herein), with
compliance determined commencing with Borrower's financial statements for
the
period ending December 31, 2007:
(a) Tangible
Net Worth not
less than $400,000,000, plus 75% of annual net income for the fiscal year
2008
and each fiscal year thereafter but with no deduction for net losses, plus
100%
of net proceeds from equity issuance that occurs in fiscal year 2007 and
then
each fiscal quarter thereafter (other than stock issued to officers, directors
or employees in respect of retirement or other similar plans, grants of stock
appreciation, stock options, restricted stock or other similar rights), less
100% of Board approved treasury stock repurchases without limitation at each
fiscal quarter end, with "Tangible Net Worth" defined as the aggregate of
total
stockholders' equity plus subordinated debt less the recorded net value of
any
intangible assets. Board as used herein shall mean the Board of
Directors of Borrower.
(b) Total
Funded Debt to
EBITDA not greater than 3.0 to 1.0 through March 31, 2008 and not greater
than
2.5 to 1.0 as of June 30, 2008 and each fiscal quarter end thereafter,
determined on a rolling 4-quarter basis with "Funded Debt" defined as the
sum of
all obligations for borrowed money (including subordinated debt and the
aggregate amounts available to be drawn under outstanding Letters of Credit)
plus all capital lease obligations, and with "EBITDA" defined for such period
as
net income before tax for such period plus interest expense (net of capitalized
interest expense), depreciation expense and amortization expense for such
period, plus any of the following for such period to the extent decreasing
net
income: (i) any non-cash compensation expense recorded from
grants of stock appreciation, stock options, restricted stock or other similar
rights to officers, directors and other employees, (ii) any non-cash item
or
deduction recorded in accordance with any change in GAAP during or effective
as
of such period, (iii) any other non-cash item (other than any non cash charges
to the extent such charges represent an accrual of or reserve for cash
expenditures in any future period) and (iv) and (iv) extraordinary,
non-recurring or one time expenses, losses or charges not to exceed
$10,000,000.00 for such period.
SECTION
4.10. NOTICE TO BANK. Promptly (but in no event more than
five (5) days after a Responsible Officer of the Borrower or any Subsidiary
Guarantor becomes aware of the occurrence of each such event or matter) give
written notice to Bank in reasonable detail of: (a) the
occurrence of any Event of Default, or any condition, event or act which
with
the giving of notice or the passage of time or both would constitute an Event
of
Default or (b) the occurrence and nature of any Reportable Event or
prohibited transaction (as defined in Section 406 of ERISA) or “accumulated
funding deficiency” (as defined in Section 302 of ERISA) with respect to any
Plan that could reasonably be expected to result in material liability to
the
Borrower or any Subsidiary Guarantor.
ARTICLE
V
NEGATIVE
COVENANTS
Borrower
further covenants that so
long as Bank remains committed to extend credit to Borrower pursuant hereto,
or
any liabilities (whether direct or contingent, liquidated or unliquidated)
of
Borrower to Bank under any of the Loan Documents remain outstanding, and
until
payment in full of all obligations of Borrower subject hereto, Borrower will
not, and will not permit any Subsidiary Guarantor (or, with respect to Sections
5.1, each Subsidiary) to, without Bank's prior written consent:
SECTION
5.1. USE OF
FUNDS. Use any of the proceeds of any credit extended hereunder
except for the purposes stated in Article I hereof.
SECTION
5.2. MERGER,
CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any
other entity unless Borrower or a Subsidiary Guarantor is the surviving entity;
dissolve unless after giving effect to such dissolution, substantially all
of
its assets are transferred directly or indirectly to Borrower or one or more
other Subsidiary Guarantors; make any substantial change in the nature of
Borrower's or any Subsidiary Guarantor’s business as conducted as of the date
hereof; nor sell, lease, transfer or otherwise dispose of all or a substantial
or material portion of Borrower's or any Subsidiary Guarantor’s assets except
(a) in the ordinary course of such entities’ business, (b) obsolete, worn out,
unnecessary or no longer used or useful in such Borrower’s or such Subsidiary
Guarantor’s business, (c) other sales, leases, transfers or dispositions, on a
consolidated basis, not to exceed $30,000,000.00 in the aggregate, (d) any
sale,
lease, transfer or other disposition to Borrower, any Subsidiary Guarantor
or
any domestic Subsidiary that concurrently becomes a Subsidiary Guarantor,
and
(e) Borrower and any Subsidiary Guarantor may transfer assets (including
cash)
not to exceed $30,000,000 in the aggregate to, or for the benefit of, any
Subsidiary that is not a Subsidiary Guarantor, directly or indirectly, in
connection with dividends to Borrower from one or more of its foreign
Subsidiaries (which transfer of assets may take the form of a contribution,
repayment of debt or other transfer), provided that, after giving effect
to all
steps of the transaction, the net effect to Borrower and the Subsidiary
Guarantors, taken as a whole, is a positive dividend.
SECTION
5.3. GUARANTIES. Guarantee or become liable in any way as
surety, endorser (other than as endorser of negotiable instruments for deposit
or collection in the ordinary course of business), accommodation endorser
or
otherwise for, nor pledge or hypothecate any assets of Borrower or any
Subsidiary Guarantor as security for, any liabilities or obligations for
borrowed money of any other person or entity, except in connection with
indebtedness permitted hereunder.
SECTION
5.4. LOANS,
ADVANCES, INVESTMENTS. Make any loans or advances to or investments
in any person or entity, except (a) any of the foregoing existing as of,
and
disclosed to Bank prior to Borrower’s execution of this Agreement, the date
hereof and (b) investments not to exceed $30,000,000.00 at any time outstanding
in Subsidiaries that do not guaranty Borrower’s obligations to Bank, (c) equity
in Subsidiaries existing on the date hereof and the capital contributions
therein outstanding as of the date hereof; (d) capital contributions, loans
or
advances by Borrower or any Subsidiary Guarantor to any Subsidiary Guarantor
or
Borrower; (e) notes or securities issued by a customer or supplier of
Borrower or any Subsidiary Guarantor in connection with an bankruptcy,
liquidation or other insolvency proceeding in respect of such customer or
supplier; (f) purchasing the equity of any person in connection with an
acquisition, provided that, such person shall promptly become a Subsidiary
Guarantor to the extent that, (i) it is a domestic Subsidiary, and (ii) on
a pro
forma basis, such person would represent, or at any time after such acquisition
represents (A) more than 10% of the EBITDA of the Company and its Subsidiaries
for the four fiscal quarter period ended as of the end of the most recently
ended fiscal quarter of the Company or (B) more than 10% of the Tangible
Net
Worth of the Company and its Subsidiaries; (h) U.S. Treasury notes or other
U.S.
Federal securities that have a maximum maturity for any single issue of not
more
than five years; (i) corporate bonds with minimum rating of A- by S&P or A3
by Moody’s; (j) taxable or tax-exempt municipal notes and bonds, with a minimum
rating of A- by S&P or A3 by Moody’s (including any state, county, town,
city, village, fire district, or school district, all revenue bonds, including
but not limited to, water and sewer, highway, housing authorities, medical
care
agencies and project finance agencies and certification of participation
bonds);
(k) Taxable Adjustable Rate Notes (TARNs) or auction rate securities;
(l) commercial paper or banker’s acceptances rated A2 or higher by S&P or P2
or higher by Moody’s; (m) deposits, including Eurodollar denominated bank
deposits; certificates of deposit; repurchase agreements or U.S. money market
funds and (n) any loan, advance or investment permitted by Section
5.2.
SECTION
5.5. PLEDGE OF
ASSETS. Mortgage, pledge, grant or permit to exist a security
interest in, or lien, excluding Permitted Liens and any of the foregoing
in
favor of Bank or which is existing as of, and disclosed to Bank in writing
prior
to Borrower’s execution of this Agreement, upon (a) any interest in any
Restricted Assets, or (b) any Other Asset that secures indebtedness to any
entity other than Bank in excess of $20,000,000.00 in principal amount at
any
time outstanding. Nor shall Borrower or any Subsidiary Guarantor
enter into any agreement or arrangement (other than (i) the Loan Documents,
(ii)
documents related to purchase money liens and capital leases permitted
hereunder, and (iii) documents relating to indebtedness subordinated to the
obligations hereunder, in the case of this clause (iii), pursuant to agreements
acceptable to Bank in its reasonable discretion) that limits such entity’s
ability to pledge assets, or grant, create, incur, assume or suffer to exist
liens upon the assets of Restricted Assets of such entity.
ARTICLE
VI
EVENTS
OF DEFAULT
SECTION
6.1. The
occurrence of any of the following shall constitute an "Event of Default"
under
this Agreement:
(a) Borrower
or any
Subsidiary Guarantor shall fail to pay when due any principal, or within
five
Business Days of when due any interest or fees or other amounts payable under
any of the Loan Documents.
(b) Any
financial
statement or certificate furnished to Bank in connection with, or any
representation or warranty made by Borrower or any Subsidiary Guarantor under
this Agreement or any other Loan Document shall prove to be incorrect, false
or
misleading in any material respect when furnished or made.
(c) Any
default in the
performance of or compliance with any obligation, agreement or other provision
contained herein or in any other Loan Document (other than those referred
to in
subsections (a) and (b) above), and with respect to any such default which
by
its nature can be cured, such default shall continue for a period of ten
(10)
Business Days after notice from Bank.
(d) Any
default in the
payment or performance of any obligation beyond any applicable grace period,
or
any defined event of default, under the terms of any contract or instrument
(other than any of the Loan Documents) pursuant to which Borrower or any
Subsidiary Guarantor has incurred any debt or other liability to any person
or
entity, including Bank, with a singular or aggregate outstanding payment
or
performance obligation in excess of $30,000,000.00.
(e) The
filing of a notice
of judgment lien against Borrower or any Subsidiary Guarantor; or the recording
of any abstract of judgment against Borrower or any Subsidiary Guarantor
in any
county in which Borrower or such Subsidiary Guarantor has an interest in
real
property; or the service of a notice of levy and/or of a writ of attachment
or
execution, or other like process, against the assets of Borrower or any
Subsidiary Guarantor; or the entry of a judgment against Borrower or any
Subsidiary Guarantor, in each case under this clause (e) where such lien,
writ
or judgment is in excess of $30,000,000.00, is not insured by an insurance
carrier which has acknowledged coverage in the amount of the claim without
any
reservation of rights or which has been ordered by a court of competent
jurisdiction to pay such claim, and the judgment shall is not satisfied,
released, discharged, vacated, fully bonded or stayed within 60 days after
such
judgment, writ, attachment or similar proceeding is entered.
(f) Borrower
or any
Subsidiary shall become insolvent, or shall suffer or consent to or apply
for
the appointment of a receiver, trustee, custodian or liquidator of itself
or any
of its property, or shall generally fail to pay its debts as they become
due, or
shall make a general assignment for the benefit of creditors; Borrower or
any
Subsidiary shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors
or
any other relief under the Bankruptcy Reform Act, Title 11 of the United
States
Code, as amended or recodified from time to time ("Bankruptcy Code"), or
under
any state or federal law granting relief to debtors, whether now or hereafter
in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against
Borrower or any Subsidiary or Borrower or any Subsidiary shall file an answer
admitting the jurisdiction of the court and the material allegations of any
involuntary petition and either (i) such proceeding or petition shall continue
undismissed for sixty (60) days or (ii) an order for relief or decree approving
or ordering any of the foregoing shall be entered; or Borrower or any Subsidiary
shall be adjudicated a bankrupt, or an order for relief shall be entered
against
Borrower or any Subsidiary by any court of competent jurisdiction under the
Bankruptcy Code or any other applicable state or federal law relating to
bankruptcy, reorganization or other relief for debtors; provided, however,
that
any of the foregoing events is solely applicable to one or more Subsidiaries,
it
shall only be an Event of Default if such event could reasonably result in
a
Material Adverse Effect.
(g) Except
as
otherwise permitted herein, the dissolution or liquidation of Borrower or
any
Subsidiary Guarantor if a corporation, partnership, joint venture or other
type
of entity; or Borrower or any such Subsidiary Guarantor, or any of its
directors, stockholders or members, shall take action seeking to effect the
dissolution or liquidation of Borrower or such Subsidiary
Guarantor.
(h) The
occurrence
of any of the following:
(i) an
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the
Securities Exchange Act of 1934, as amended) of 30% or more of either (i)
the
then outstanding shares of common stock of Borrower (the “Outstanding Borrower
Common Shares”), or (ii) the combined voting power of the then outstanding
voting securities of Borrower entitled to vote generally in the election
of
directors (the “Outstanding Borrower Voting Securities”); excluding, however,
the following: (a) any acquisition directly from the Borrower of Outstanding
Borrower Common Shares and Outstanding Borrower Voting Securities, other
than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Borrower,
(b)
any acquisition by Borrower or any entity directly or indirectly controlled
by
Borrower, (c) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Borrower or any entity directly or indirectly
controlled by Borrower; and (d) any acquisition pursuant to a transaction
which
complies with clauses (1), (2) and (3) of subsection (iii) of this Section
6.1(h); or
(ii)
individuals who, as of the date of this Agreement, constitute the Board of
Directors of Borrower (the “Incumbent Board”) cease for any reason to constitute
at least a majority of such Incumbent Board; provided, however, that any
individual who becomes a member of such Incumbent Board subsequent to the
effective date of this agreement, whose election, or nomination for election
by
Borrower’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such
individual were a member of the Incumbent Board; but provided further, that
any
such individual whose initial assumption of office occurs as a result of
either
an actual or threatened election contest (as such terms are used in Rule
14a-11
of Regulation 14A promulgated under the Securities Exchange Act of 1934,
as
amended) or other actual or threatened solicitation of proxies or consents
by or
on behalf of a Person other than the Incumbent Board shall not be so considered
as a member of the Incumbent Board.
SECTION
6.2. REMEDIES. Upon the occurrence of any Event of
Default: (a) all indebtedness of Borrower under each of the Loan
Documents, any term thereof to the contrary notwithstanding, shall at Bank's
option and without notice become immediately due and payable without
presentment, demand, protest or notice of dishonor, all of which are hereby
expressly waived by Borrower; (b) the obligation, if any, of Bank to extend
any further credit under any of the Loan Documents shall immediately cease
and
terminate; and (c) Bank shall have all rights, powers and remedies
available under each of the Loan Documents, or accorded by law, including
without limitation the right to resort to any or all security, if any, for
any
credit subject hereto and to exercise any or all of the rights of a beneficiary
or secured party, if applicable, pursuant to applicable law. All
rights, powers and remedies of Bank may be exercised at any time by Bank
and
from time to time after the occurrence and during the continuance of an Event
of
Default, are cumulative and not exclusive, and shall be in addition to any
other
rights, powers or remedies provided by law or equity.
ARTICLE
VII
MISCELLANEOUS
SECTION
7.1. NO
WAIVER. No delay, failure or discontinuance of Bank in exercising any
right, power or remedy under any of the Loan Documents shall affect or operate
as a waiver of such right, power or remedy; nor shall any single or partial
exercise of any such right, power or remedy preclude, waive or otherwise
affect
any other or further exercise thereof or the exercise of any other right,
power
or remedy. Any waiver, permit, consent or approval of any kind by
Bank of any breach of or default under any of the Loan Documents must be
in
writing and shall be effective only to the extent set forth in such
writing.
SECTION
7.2. NOTICES. All notices, requests and demands which any
party is required or may desire to give to any other party under any provision
of this Agreement must be in writing delivered to each party at the following
address:
BORROWER: INTERMEC,
INC.
0000
00xx Xxxxxx
Xxxx
Xxxxxxx,
Xxxxxxxxxx
00000-0000
Attention:
Treasury
Department
Facsimile:
BANK: XXXXX
FARGO BANK, NATIONAL ASSOCIATION
000
000xx Xxxxxx
Xxxxxxxxx,
Xxxxx 000
Xxxxxxxx,
Xxxxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Relationship
Manager
or
to
such other address as any party may designate by written notice to all other
parties. Each such notice, request and demand shall be deemed given
or made as follows: (a) if sent by hand delivery, upon delivery;
(b) if sent by mail, upon the earlier of the date of receipt or three (3)
days after deposit in the U.S. mail, first class and postage prepaid; and
(c) if sent by facsimile, upon receipt.
SECTION
7.3. COSTS,
EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank immediately
upon demand the full amount of all payments, advances, charges, costs and
expenses, including reasonable attorneys' fees (to include outside counsel
fees
and all allocated costs of Bank's in-house counsel), expended or incurred
by
Bank in connection with (a) the enforcement of Bank's rights and/or the
collection of any amounts which become due to Bank under any of the Loan
Documents and (b) the prosecution or defense of any action in any way
related to any of the Loan Documents, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level,
in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation,
any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower or any other person or entity. Each
party shall bear its own costs and expenses for the preparation, negotiation,
execution and delivery of the Loan Documents executed in connection with
the
initial closing the Line of Credit.
SECTION
7.4. SUCCESSORS,
ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties; provided however, that Borrower may
not
assign or transfer its interests or rights hereunder without Bank's prior
written consent. Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest
in,
Bank's rights and benefits under each of the Loan Documents; provided, that
as
long as no Event of Default has occurred and is continuing, Bank’s rights to
sell, assign or transfer, but not participate, its rights as provided in
this
sentence shall be subject to Borrower’s reasonable consent (which consent shall
not be unreasonably withheld or delayed). In connection therewith,
Bank may disclose to any potential transferee or participant that agrees
to
comply with the confidentiality provisions set forth in Section 7.5, all
documents and information which Bank now has or may hereafter acquire relating
to any credit subject hereto, Borrower or its business, any Subsidiary or
the
business of such Subsidiary, or any collateral required hereunder, if
any.
SECTION
7.5. CONFIDENTIALITY. Bank hereby agrees to use
commercially reasonable efforts to hold all non-public information obtained
pursuant to the requirements of this Agreement in accordance with customary
procedures for handling confidential information of this nature and in
accordance with Bank’s customary practices; except that any such confidential
information may be disclosed: (i) if required by subpoena or similar
order of any court of competent jurisdiction, (ii) if required to be
disclosed to any regulatory or administrative governmental agency or commission
having any regulatory authority over Bank, (iii) to any other party to this
Agreement, (iv) to any affiliate of Bank so long as such affiliate agrees
to be
bound by the provisions of this Section 7.5 prior to the time of such
disclosure, (v) to any prospective transferee or participant so long as such
person agrees to be bound by the provisions of this Section 7.5 prior to
the
time of such disclosure, (vi) to any person if such information shall have
been
already publicly disclosed (other than as a result of disclosure by Bank
or any
other person bound by a confidentiality agreement with Borrower or any of
its
Subsidiaries known to Bank), (vii) in connection with the preparation,
negotiation or administration or enforcement of this Agreement or the exercise
of any right or remedy under this Agreement, to the counsel, auditors,
professional advisors and consultants, and accountants to Bank and (viii)
if
required in connection with any legal proceedings instituted by or against
Bank.
SECTION
7.6. ENTIRE
AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents
constitute the entire agreement between Borrower and Bank with respect to
each
credit subject hereto and supersede all prior negotiations, communications,
discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing
signed by each party hereto.
SECTION
7.7. NO THIRD
PARTY BENEFICIARIES. This Agreement is made and entered into for the
sole protection and benefit of the parties hereto and their respective permitted
successors and assigns, and no other person or entity shall be a third party
beneficiary of, or have any direct or indirect cause of action or claim in
connection with, this Agreement or any other of the Loan Documents to which
it
is not a party.
SECTION
7.8. TIME. Time is of the essence of each and every
provision of this Agreement and each other of the Loan Documents.
SECTION
7.9. SEVERABILITY OF PROVISIONS. If any provision of
this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or any remaining
provisions of this Agreement.
SECTION
7.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when executed and delivered shall be
deemed to be an original, and all of which when taken together shall constitute
one and the same Agreement.
SECTION
7.11. GOVERNING
LAW. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
SECTION
7.12. ARBITRATION.
(a) Arbitration. Any claim, dispute or controversy between or among the parties to this Agreement (including their respective employees, officers, directors, attorneys, and other agents), that in any way arises out of or relates to (i) any credit subject to this Agreement, (ii) any of the Loan Documents and/or their negotiation, execution, collateralization, administration, repayment, modification, extension, substitution, formation, inducement, enforcement, default or termination; or (iii) any requests for additional credit, shall, upon demand by any party to this Agreement, be submitted to final, binding and confidential arbitration before the American Arbitration Association (“AAA”) or such other administrator to which the parties may mutually agree. (For ease of reference only, and without limitation, all further references to the arbitration administrator shall be to the “AAA.”)
(b) Governing
Rules. Any arbitration proceeding initiated pursuant to this
Agreement shall, unless otherwise agreed by the parties to the arbitration,
(i)
take place in California, in a location selected by the arbitrator; (ii)
be
governed by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the documents
between the parties; and (iii) be conducted by the AAA, in accordance with
its
optional procedures for large, complex commercial disputes. (The
optional procedures for large, complex commercial disputes are referred to
herein, as applicable, as the “Rules”.) In the event of any conflict
between the terms or procedures of this Agreement and the Rules, the terms
and
procedures herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by another party shall bear all
costs
and expenses (including attorneys’ fees) incurred by such other party in
compelling arbitration of any dispute. Nothing contained herein shall
be deemed to be a waiver by any party that is a bank of the protections afforded
to it under 12 U.S.C. §91 or any similar applicable state law.
(c) No Waiver of Provisional Remedies, Self-Help and
Foreclosure. This arbitration provision shall not limit the right
of any party to (i) foreclose against real or personal property collateral
if
any; (ii) exercise self-help remedies relating to collateral if any or proceeds
of collateral if any such as setoff or repossession; or (iii) obtain provisional
or ancillary remedies such as replevin, injunctive relief, attachment or
the
appointment of a receiver, before during or after the pendency of any
arbitration proceeding. This exclusion does not constitute a waiver
of the right or obligation of any party to submit any dispute to arbitration
hereunder, including those arising from the exercise of the actions detailed
in
sections (i), (ii) and (iii) of this paragraph.
(d) Arbitrator
Qualifications and Powers. Any claim, dispute or controversy
subject to arbitration hereunder in which the amount in controversy is
$5,000,000.00 or less will be decided by a single arbitrator who shall be
selected according to the Rules, and who shall not render an award of more
than
$5,000,000.00 (exclusive of fees and costs). Any claim, dispute or
controversy subject to arbitration hereunder in which the amount in controversy
exceeds $5,000,000.00 shall be decided by a panel of three arbitrators (and
by
at least a majority of the three-member panel). In cases in which a
three-member panel is required, all three arbitrators must participate in
all
hearings and deliberations. Any arbitrator selected pursuant to this
Agreement must be an attorney licensed to practice in the State of California,
or a retired judge of the state or federal courts within the State of
California, in the case of an attorney, with no less than ten years experience
in the substantive law applicable to the subject matter of the dispute to
be
arbitrated. If arbitrability is disputed, then the arbitrator(s)
shall determine whether an issue is arbitrable and in all cases shall give
effect to the statutes of limitation in adjudicating any claim. The
arbitrator(s) shall, with or without oral argument (at his, her or their
discretion), rule upon any motions to dismiss (or demurrers) or motions for
summary adjudication or summary judgment. The arbitrator(s) shall
resolve all disputes in accordance with the substantive law of California,
and
may grant any remedy or relief that a state or federal court within California
could grant within the scope hereof, and such ancillary relief as is necessary
to make effective any award. The arbitrator(s) may impose sanctions,
award fees and costs to any prevailing party, and take such other action
as may
be necessary in the interest of justice to the extent that a court may do
so
pursuant to the Federal Rules of Civil Procedure, the California Code of
Civil
Procedure or other applicable law. Judgment upon the award rendered
by the arbitrator(s) may be entered in any court having
jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests
such
action for judicial relief.
(e) Discovery. Discovery
shall be permitted in accordance with the Rules. All discovery shall
be limited to matters directly relevant to the dispute being arbitrated and
must, absent an agreement by the parties or by order of the arbitrator(s)
for
good cause shown, be completed no later than 20 days before the
hearing. All discovery disputes shall be subject to final resolution
by the arbitrator(s). The procedure for submitting discovery disputes
to the arbitrator(s) for resolution shall be determined by the
arbitrator(s).
(f) Class
Proceedings and Consolidations. No party hereto may join or
consolidate disputes by or against any other person or entity in any arbitration
proceeding initiated under this Agreement, except for Subsidiary Guarantors,
or
to include in any arbitration hereunder any dispute as a representative or
member of a class, or to act in any arbitration hereunder in the interest
of the
general public or in a private attorney general capacity.
(i) Miscellaneous. To
the maximum extent practicable, the AAA, the arbitrator(s) and the parties
shall
take all steps necessary to conclude any arbitration proceeding initiated
under
this Agreement within 180 days of the filing of the arbitration
demand. No arbitrator or other party to the arbitration proceeding
may disclose the fact or subject matter of the arbitration proceeding, or
the
content or results thereof, except for disclosures of information by a party
required in the course of the arbitration, or in the ordinary course of its
business, or by any applicable law or regulation. This arbitration
provision shall survive termination, amendment or expiration of any of the
Loan
Documents or any relationship between the parties.
(i) Small
Claims Court. Notwithstanding anything herein to the contrary,
each party retains the right to pursue in Small Claims Court any dispute
within
that court’s jurisdiction. Further, this arbitration provision shall
apply only to disputes in which either party seeks to recover an amount of
money
(excluding attorneys’ fees and costs) that exceeds the jurisdictional limit of
the Small Claims Court.
IN
WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed as of the day and year first
written above.
| INTERMEC, INC. |
XXXXX
FARGO BANK,
NATIONAL ASSOCIATION
|
|
By:
/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Vice President/
Treasurer/Tax
By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx, Chief Financial
Officer
|
By: /s/ Xxxxxx X. Xxxxxxxxx
|
