Exhibit 10.01
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CREDIT AGREEMENT
DATED AS OF JANUARY 17, 1996
AMONG
LASERMASTER CORPORATION
AS BORROWER,
THE LENDERS NAMED HEREIN
AS LENDERS,
AND
GENERAL ELECTRIC CAPITAL CORPORATION,
AS AGENT AND LENDER
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TABLE OF CONTENTS
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1. AMOUNT AND TERMS OF CREDIT.......................................................................... 1
1.1 Revolving Credit Facility..................................................................... 1
1.2 Prepayment.................................................................................... 2
1.3 Use of Proceeds............................................................................... 3
1.4 Interest on Revolving Credit Loan............................................................. 3
1.5 Eligible Accounts............................................................................. 5
1.6 Eligible Inventory............................................................................ 5
1.7 Fees.......................................................................................... 5
1.8 Cash Management Systems....................................................................... 6
1.9 Receipt of Payments........................................................................... 6
1.10 Application and Allocation of Payments........................................................ 6
1.11 Loan Account and Accounting................................................................... 7
1.12 Indemnity..................................................................................... 7
1.13 Access........................................................................................ 8
1.14 Taxes......................................................................................... 8
1.15 Capital Adequacy; Increased Costs; Illegality................................................. 9
2. CONDITIONS PRECEDENT................................................................................10
2.1 Conditions to the Initial Loans...............................................................10
2.2 Further Conditions to Each Revolving Credit Advance...........................................12
3. REPRESENTATIONS AND WARRANTIES......................................................................13
3.1 Corporate Existence; Compliance with Law......................................................13
3.2 Executive Offices.............................................................................13
3.3 Corporate Power, Authorization, Enforceable Obligations.......................................13
3.4 Financial Statements and Projections..........................................................14
3.5 Collateral Reports............................................................................14
3.6 Material Adverse Effect.......................................................................15
3.7 Ownership of Property; Liens..................................................................15
3.8 Restrictions; No Default......................................................................15
3.9 Labor Matters.................................................................................16
3.10 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.....................16
3.11 Government Regulation.........................................................................17
3.12 Margin Regulations............................................................................17
3.13 Taxes.........................................................................................17
3.14 ERISA.........................................................................................18
3.15 No Litigation.................................................................................19
3.16 Brokers.......................................................................................19
3.17 Employment Matters............................................................................19
3.18 Patents, Trademarks, Copyrights and Licenses..................................................19
3.19 Full Disclosure...............................................................................20
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3.20 Hazardous Materials..........................................................................20
3.21 Insurance Policies...........................................................................20
3.22 Deposit and Disbursement Accounts............................................................20
3.23 [Intentionally Omitted]......................................................................21
3.24 [Intentionally Omitted]......................................................................21
3.25 Agreements and Other Documents...............................................................21
3.26 FEIN.........................................................................................21
4. FINANCIAL STATEMENTS AND INFORMATION...............................................................21
4.1 Reports and Notices..........................................................................21
4.2 Communication with Accountants...............................................................21
5. AFFIRMATIVE COVENANTS..............................................................................22
5.1 Maintenance of Existence and Conduct of Business.............................................22
5.2 Payment of Obligations.......................................................................22
5.3 Books and Records............................................................................22
5.4 Litigation...................................................................................23
5.5 Insurance....................................................................................23
5.6 Compliance with Laws.........................................................................24
5.7 [Intentionally Omitted.].....................................................................24
5.8 Supplemental Disclosure......................................................................24
5.9 Employee Plans...............................................................................24
5.10 Environmental Matters........................................................................25
5.11 Landlords' Agreements, Bailee Letters and Mortgagee Agreements...............................25
5.12 Leased Locations of Collateral...............................................................25
6. NEGATIVE COVENANTS.................................................................................26
6.1 Mergers, Subsidiaries, Etc...................................................................26
6.2 Investments; Loans and Advances..............................................................26
6.3 Indebtedness.................................................................................27
6.4 Employee Loans and Affiliate Transactions....................................................27
6.5 Capital Structure and Business...............................................................28
6.6 Guaranteed Indebtedness......................................................................28
6.7 Liens........................................................................................28
6.8 Sale of Assets...............................................................................29
6.9 ERISA........................................................................................30
6.10 Financial Covenants..........................................................................30
6.11 Hazardous Materials..........................................................................30
6.12 Sale-Leasebacks..............................................................................30
6.13 Cancellation of Indebtedness.................................................................30
6.14 Restricted Payments..........................................................................30
6.15 Leases.......................................................................................31
6.16 Fiscal Year..................................................................................31
6.17 Change of Corporate Name or Location.........................................................31
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6.18 Sale of Stock................................................................................31
6.19 Cash Management..............................................................................31
6.20 No Impairment of Upstreaming.................................................................32
6.21 Changes Relating to Subordinated Debt........................................................32
6.22 LaserMaster Export Corporation...............................................................32
7. TERM...............................................................................................32
7.1 Termination..................................................................................32
7.2 Survival of Obligations Upon Termination of Financing Arrangements...........................32
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES.............................................................33
8.1 Events of Default............................................................................33
8.2 Remedies.....................................................................................35
8.3 Waivers by Borrower..........................................................................36
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT................................................36
9.1 Assignment and Participations................................................................36
9.2 Appointment of Agent.........................................................................37
9.3 Agent's Reliance, Etc........................................................................38
9.4 GE Capital and Affiliates....................................................................39
9.5 Lender Credit Decision.......................................................................39
9.6 Indemnification..............................................................................39
9.7 Successor Agent..............................................................................40
9.8 Setoff and Sharing of Payments...............................................................40
9.9 Disbursement of Funds........................................................................40
9.10 Advances; Payments; Information; Non-Funding Lenders.........................................41
10. SUCCESSORS AND ASSIGNS.............................................................................44
10.1 Successors and Assigns.......................................................................44
11. MISCELLANEOUS......................................................................................44
11.1 Complete Agreement; Modification of Agreement................................................44
11.2 Amendments and Waivers.......................................................................44
11.3 Fees and Expenses............................................................................45
11.4 No Waiver....................................................................................46
11.5 Remedies.....................................................................................47
11.6 Severability.................................................................................47
11.7 Conflict of Terms............................................................................47
11.8 Authorized Signature.........................................................................47
11.9 GOVERNING LAW................................................................................47
11.10 Notices......................................................................................48
11.11 Section Titles...............................................................................48
11.12 Counterparts.................................................................................48
11.13 WAIVER OF JURY TRIAL.........................................................................48
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11.14 Press Releases...............................................................................49
11.15 Reinstatement................................................................................49
11.16 Release of Intellectual Property Lien........................................................49
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INDEX OF EXHIBITS AND SCHEDULES
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Exhibit A - Notice of Revolving Credit Advance
Exhibit B - Borrowing Base Certificate
Exhibit C - Revolving Credit Note
Exhibit D - Borrower Security Agreement
Exhibit E - Subsidiary Security Agreement
Exhibit F - Holdings Guaranty
Exhibit G - Subsidiary Guaranty
Schedule 1.1(a) - Responsible Individual
Schedule 3.2 - Executive Offices
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Pro Forma
Schedule 3.4(C) - Projections
Schedule 3.7 - Real Estate and Leases
Schedule 3.9 - Labor Matters
Schedule 3.10 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Schedule 3.13 - Tax Matters
Schedule 3.14 - ERISA Plans
Schedule 3.15 - Litigation
Schedule 3.17 - Employment Matters
Schedule 3.18 - Intellectual Property
Schedule 3.20 - Hazardous Materials
Schedule 3.21 - Insurance Policies
Schedule 3.22 - Deposit and Disbursement Accounts
Schedule 3.26 - FEIN Numbers
Schedule 5.1 - Trade Names
Schedule 6.2 - Investments
Schedule 6.3 - Indebtedness
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.6 - Guaranteed Indebtedness
Schedule 6.7 - Existing Liens
Schedule 6.15 - Real Estate Leases
Schedule 11.8 - Authorized Signatures
Schedule A (Recitals) - Definitions
Schedule B (Section 1.5) - Eligible Accounts
Schedule C (Section 1.6) - Eligible Inventory
Schedule D (Section 1.8) - Cash Management Systems
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Schedule E (Section 2.1(b)) - Schedule of Closing Documents
Schedule F (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Schedule G (Section 4.1(b)) - Collateral Reports
Schedule H (Section 6.11) - Financial Covenants
Schedule I (Section 11.10) - Notice Addresses
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of January 17, 1996, is by and among
LASERMASTER CORPORATION, a Minnesota corporation ("Borrower"), GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation (in its individual capacity, "GE
Capital"), for itself, as Lender, and as Agent for Lenders, and the other
Lenders from time to time party hereto.
RECITALS:
WHEREAS, Borrower desires that Lenders extend a revolving credit
facility to Borrower for the purpose of refinancing certain indebtedness of
Borrower, to provide working capital financing for Borrower and to provide funds
for other general corporate purposes of Borrower; and Borrower desires to borrow
up to $10,000,000 from Lenders and Lenders are willing to make certain loans and
other extensions of credit to Borrower of up to such amount upon the terms and
conditions set forth herein;
WHEREAS, Borrower desires to secure all of its obligations under the
Loan Documents by granting to Agent, on behalf of Lenders, a security interest
in and lien upon certain of its property;
WHEREAS, Holdings is willing to guaranty all of the obligations of
Borrower to Lenders under the Loan Documents;
WHEREAS, Asia/Pacific and ColorMasters are willing to guaranty all of
the obligations of Borrower to Lenders under the Loan Documents and to grant to
Agent, on behalf of Lenders, a security interest in and lien upon certain of its
property; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Schedule A hereto; all Schedules, Exhibits and
other attachments hereto, or expressly identified to this Agreement, are
incorporated herein by reference, and taken together, shall constitute but a
single agreement; and these Recitals shall be construed as part of this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Revolving Credit Facility. (a) Upon and subject to the terms and
conditions hereof, each Lender, severally and not jointly, agrees to make
available, from time to time, until the Commitment Termination Date, for
Borrower's use and upon the request of Borrower therefor, its Pro Rata Share of
advances (each, a "Revolving Credit Advance") in an aggregate amount which shall
not at any given time exceed the lesser at such time of (A) the Maximum
Revolving Credit
Loan and (B) an amount equal to the Borrowing Base at such time ("Borrowing
Availability"); provided, however, that in no event shall the Revolving Credit
Loan of any Lender exceed its Revolving Credit Loan Commitment. Until all
amounts outstanding in respect of the Revolving Credit Loan shall become due and
payable on the Commitment Termination Date, Borrower may from time to time
borrow, repay and reborrow under this Section 1.1(a). Each Revolving Credit
Advance shall be made on notice by Borrower to the individual at the Agent
identified on Schedule 1.1(a) at the address specified thereon, given no later
than 12:00 noon (Chicago time) on the Business Day of the proposed Revolving
Credit Advance. Each such notice (a "Notice of Revolving Credit Advance") shall
be substantially in the form of Exhibit A hereto, specifying therein the
requested date, the amount of such Revolving Credit Advance, and such other
information as may be required by Agent and shall be given in writing (by
telecopy or overnight courier) or by telephone confirmed immediately in writing.
Agent shall be entitled to rely upon, and shall be fully protected under this
Agreement in relying upon, any Notice of Revolving Credit Advance believed by
Agent to be genuine and to assume that each Person executing and delivering the
same was duly authorized unless the responsible individual acting thereon for
Agent shall have, at the time of reliance thereon, actual knowledge to the
contrary.
(b) Borrower shall execute and deliver to each Lender a note to
evidence the Revolving Credit Loan, such note to be in the principal amount of
the Revolving Credit Loan Commitment of such Lender, dated the Closing Date and
substantially in the form of Exhibit C hereto (each a "Revolving Credit Note"
and, collectively, the "Revolving Credit Notes"). The Revolving Credit Notes
shall represent the obligation of Borrower to pay the amount of the Revolving
Credit Loan Commitment or, if less, the aggregate unpaid principal amount of all
Revolving Credit Advances made by Lenders to Borrower and all other obligations
together with interest thereon as prescribed in Section 1.5. The date and
amount of each Revolving Credit Advance and each payment of principal with
respect thereto shall be recorded on the books and records of Agent, which books
and records shall constitute prima facie evidence of the accuracy of the
information therein recorded. The entire unpaid balance of the Revolving Credit
Loan shall be immediately due and payable on the Commitment Termination Date.
1.2 Prepayment. (a) In the event that the outstanding balance of the
Revolving Credit Loan shall, at any time, exceed the lesser at such time of (i)
the Maximum Revolving Credit Loan and (ii) the Borrowing Base, Borrower shall
immediately repay the Revolving Credit Loan in the amount of such excess.
(b) Immediately upon receipt by Borrower or any of its Subsidiaries
(other than LaserMaster Europe) of net proceeds (after deducting all expenses,
including commissions, taxes payable, and amounts payable to holders of prior
liens, if any, and an appropriate reserve for income taxes in connection
therewith) of any asset disposition permitted by Section 6.8(ii) or (iii),
Borrower shall prepay the Loans with such net proceeds in accordance with clause
(d) below; provided, however, that so long as (i) no Default or Event of Default
has occurred and is continuing, (ii) Excess Availability is equal to or greater
than $2,000,000 and (iii) the Average Payable Days is less than 60 days,
Borrower shall not be required to prepay the Loans with any net proceeds from
the sale or other disposition of any Intellectual Property ("IP Proceeds") of
the Borrower or any of its
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Subsidiaries (other than LaserMaster Europe); provided further, that in the
event either test set forth in clause (i), (ii) or (iii) above shall no longer
be met by Borrower after Borrower or any of its Subsidiaries (other than
LaserMaster Europe) has received any IP Proceeds, then Borrower shall
immediately prepay the Loans with any such IP Proceeds in accordance with clause
(d) below; and provided further, that so long as no Default or Event of Default
has occurred and is continuing, Borrower or any of its Subsidiaries (other than
LaserMaster Europe) may reinvest, within ninety (90) days after receipt thereof,
the net proceeds from any sale or disposition of assets which are obsolete or no
longer useful in Borrower's or any Subsidiary's (other than LaserMaster Europe)
business in productive assets of a kind then used or usable in the business of
Borrower and its Subsidiaries (other than LaserMaster Europe).
(c) Borrower shall have the right at any time on thirty (30) days'
prior written notice to Agent to voluntarily prepay all or part of the Revolving
Credit Loan and permanently reduce or terminate the Revolving Credit Loan
Commitment, provided that any such voluntary prepayment shall be accompanied by
the payment of the fee required by Section 1.7(c), if any. Upon any such
prepayment and permanent reduction or termination of the Revolving Credit Loan
Commitment, Borrower's right to receive Revolving Credit Advances shall
simultaneously terminate or be permanently reduced, as the case may be.
(d) Any prepayments required under clause (b) above shall be applied
in satisfaction of the Obligations to the principal amount of the Revolving
Credit Loan outstanding and accrued interest with respect thereto until the same
shall have been paid in full.
1.3 Use of Proceeds. Borrower shall utilize the proceeds of
Revolving Credit Advances solely for the Refinancing (and to pay any related
transaction expenses) and for the financing of ordinary working capital and
general corporate needs (but excluding in any event any direct or indirect
redemption, purchase, repayment or defeasance of any Stock of Borrower or
Holdings).
1.4 Interest on Revolving Credit Loan. (a) Borrower shall pay
interest to Agent, for the ratable benefit of Lenders in accordance with the
Revolving Credit Loans being made by each Lender, in arrears on each applicable
Interest Payment Date, at a rate equal to the Index Rate plus the Applicable
Margin in effect from time to time.
(b) If any payment on the Revolving Credit 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 and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
(c) All computations of interest shall be made by Agent on the basis
of a three hundred and sixty (360) day year, in each case for the actual number
of days occurring in the period for which such interest is payable. The Index
Rate and the Applicable Margin shall be determined each day based upon the Index
Rate and Applicable Margin, respectively, as in effect each day. Each
determination by Agent of an interest rate hereunder shall (absent manifest
error) be deemed
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final, binding and conclusive upon Borrower in all respects, unless Borrower,
within thirty (30) days after each determination by Agent of an interest rate
hereunder, shall notify Agent in writing of any objection which Borrower may
have to any such determination, describing in reasonable detail the basis for
such objection with specificity. In that event, only those determinations
expressly objected to in such notice shall be deemed to be disputed by Borrower.
Agent's determination, based upon the facts available, of any determination
objected to by Borrower in such notice shall (absent manifest error) be final,
binding and conclusive on Borrower.
(d) So long as any Event of Default shall have occurred and be
continuing, and after written notice from Agent to Borrower, the interest rates
applicable to the Revolving Credit Loan and any other Obligations shall be
increased by two percent (2%) per annum above the rate of interest otherwise
applicable hereunder ("Default Rate").
(e) Notwithstanding anything to the contrary set forth in this Section
1.4, if, at any time until payment in full of all of the Obligations, the rate
of interest payable hereunder exceeds the highest rate of interest permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto (the "Maximum Lawful Rate"), then in such
event and so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable hereunder shall be equal to the Maximum Lawful Rate; provided,
however, that if at any time thereafter the rate of interest payable hereunder
is less than the Maximum Lawful Rate, Borrower shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by Agent, on behalf of Lenders, from the making of such advances
hereunder is equal to the total interest which would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, the interest rate payable hereunder shall be the rate of
interest provided in Sections 1.4(b) through (d) of this Agreement, unless and
until the rate of interest again exceeds the Maximum Lawful Rate, in which event
this paragraph shall again apply. In no event shall the total interest received
by any Lender pursuant to the terms hereof exceed the amount which such Lender
could lawfully have received had the interest due hereunder been calculated for
the full term hereof at the Maximum Lawful Rate. In the event the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. In the event that
a court of competent jurisdiction, notwithstanding the provisions of this
Section 1.4 (e), shall make a final determination that a Lender has received
interest hereunder or under any of the other Loan Documents in excess of the
Maximum Lawful Rate, Agent shall, to the extent permitted by applicable law,
promptly apply such excess first to any interest due and not yet paid hereunder
in respect of the Loans, then to the outstanding principal of the Loans, then to
Fees and any other unpaid Obligations and thereafter shall refund any excess to
Borrower or as a court of competent jurisdiction may otherwise order.
1.5 Eligible Accounts. Based on the most recent Borrowing Base
Certificate delivered by Borrower to Agent and on other information available to
Agent, Agent shall in its reasonable discretion determine which Accounts shall
be deemed to be "Eligible Accounts" for purposes of determining the amounts, if
any, to be advanced to Borrower under the Revolving Credit
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Loan. In determining whether a particular Account constitutes an Eligible
Account, Agent shall not include any such Account which meets any of the
criteria set forth on Schedule B hereto.
1.6 Eligible Inventory. Based on the most recent Borrowing Base
Certificate delivered by Borrower to Agent and on other information available to
Agent, Agent shall in its reasonable discretion determine which Inventory shall
be deemed to be "Eligible Inventory" for purposes of determining the amounts, if
any, to be advanced to Borrower under the Revolving Credit Loan. In determining
whether any particular Inventory constitutes Eligible Inventory, Agent shall not
include Inventory which meets any of the criteria set forth in Schedule C
hereto.
1.7 Fees. (a) Borrower shall pay to GE Capital, individually, the
fees specified in that certain Fee Letter, dated of even date herewith (the "GE
Capital Fee Letter"), at the times specified for payment therein.
(b) As additional compensation for Lenders' costs and risks in making
the Revolving Credit Loan available to Borrower, Borrower agrees to pay to
Agent, for the ratable benefit of Lenders, in arrears, on the first Business Day
of each month prior to the Commitment Termination Date and on the Commitment
Termination Date, a fee for Borrower's non-use of available funds (the "Non-use
Fee") in an amount equal to one-half of one percent (.50%) per annum (calculated
on the basis of a 360 day year for actual days elapsed) of the difference
between the respective daily averages of (i) the Maximum Revolving Credit Loan
(as it may be adjusted from time to time hereunder) and (ii) the amount of the
Revolving Credit Loan outstanding during the period for which the Non-Use Fee is
due; provided, however, that solely for purposes of computing the Non-use Fee,
the Maximum Revolving Credit Loan shall be deemed to be $8,000,000 from and
after the Closing Date until the first day in which the amount of the Revolving
Credit Loan outstanding exceeds $8,000,000, from and after which day the Maximum
Revolving Credit Loan shall be deemed to be $10,000,000.
(c) If, prior to the Commitment Termination Date, Borrower shall
prepay the Revolving Credit Loan pursuant to Section 1.2(c), whether voluntarily
or involuntarily and whether before or after acceleration of the Obligations,
Borrower shall pay to the Agent, for the benefit of Lenders as liquidated
damages and compensation for the costs of being prepared to make funds available
to Borrower hereunder an amount determined by multiplying the Revolving Credit
Loan Commitment of all Lenders (or, in the case of a partial reduction, by the
amount of such reduction) by (i) two percent (2.0%) in the case of a permanent
prepayment of the Revolving Credit Loan and reduction of the Revolving Loan
Commitment prior to the first anniversary of the Closing Date, (ii) one percent
(1.0%) in the case of a permanent prepayment of the Revolving Credit Loan and
reduction of the Revolving Loan Commitment from and after the first anniversary
of the Closing Date and prior to the second anniversary of the Closing Date, and
(iii) one-half of one percent (.50%) in the case of a permanent prepayment of
the Revolving Credit Loan and reduction of the Revolving Loan Commitment from
and after the second anniversary of the Closing Date and prior to the Commitment
Termination Date.
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1.8 Cash Management Systems. On or prior to the Closing Date,
Borrower will establish and will maintain until the Termination Date, the cash
management systems described on Schedule D hereto.
1.9 Receipt of Payments. Borrower shall make each payment under this
Agreement not later than 1:00 p.m. (Chicago time) on the day when due in lawful
money of the United States of America in immediately available funds to the
Collection Account. For purposes of computing interest and fees and determining
the amount of funds available for borrowing by Borrower pursuant to Section
1.1(a), (a) all payments (including cash sweeps) consisting of cash, wire or
electronic transfers in immediately available funds shall be deemed received on
the date of deposit thereof in the Collection Account and notice to Agent of
such deposit before the time specified above, and (b) all payments consisting of
checks, drafts, or similar non-cash items shall be deemed received one (1)
Business Day after receipt of good funds following deposit of any such payment
in the Collection Account and notice to Agent of such deposit; provided,
however, that any such payments deposited in the Collection Account not later
than 1:00 p.m. (Chicago time) shall be deemed received on such Business Day
solely for purposes of determining the amount of funds available for borrowing
by Borrower pursuant to Section 1.1(a).
1.10 Application and Allocation of Payments. Borrower hereby
irrevocably waives the right to direct the application of any and all payments
at any time or times hereafter received from or on behalf of Borrower, and
Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the then due and
payable Obligations of Borrower and in repayment of the Revolving Credit Loan as
Agent may deem advisable notwithstanding any previous entry by Agent upon the
Loan Account or any other books and records. In the absence of a specific
determination by Agent with respect thereto, the same shall be applied in the
following order: (i) to then due and payable Fees and expenses; (ii) to then due
and payable interest payments on the Revolving Credit Loan; (iii) to then due
and payable Obligations other than Fees, expenses and interest and principal
payments; and (iv) to principal payments on the Revolving Credit Loan; and (v)
to all other then due and payable Obligations. Agent is authorized to, and at
its option may, make or cause to be made Revolving Credit Advances on behalf of
Borrower for payment of all Fees, expenses, Charges, costs, principal, interest,
or other Obligations owing by Borrower under this Agreement or any of the other
Loan Documents if and to the extent Borrower fails to promptly pay any such
amounts as and when due, even if such Revolving Credit Advance would cause total
Revolving Credit Advances to exceed Borrowing Availability or the Maximum
Revolving Credit Loan amount; provided, however, that so long as no Default or
Event of Default shall have occurred and be continuing, Agent shall notify
Borrower at least two (2) days in advance of making any Revolving Credit Advance
on behalf of Borrower for payment of any such items other than principal or
interest. At Agent's option and to the extent permitted by law, any advances so
made shall be deemed Revolving Credit Advances constituting part of the
Revolving Credit Loan hereunder.
1.11 Loan Account and Accounting. Agent shall maintain a loan
account (the "Loan Account") on its books to record: (a) all Revolving Credit
Advances, (b) all payments made by Borrower, and (c) all other appropriate
debits and credits as provided in this Agreement with
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respect to the Revolving Credit Loan or any other Obligations. All entries in
the Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time. Borrower shall pay all Obligations as
such amounts become due or are declared due pursuant to the terms of this
Agreement.
The balance in the Loan Account, as recorded on Agent's most recent
printout or other written statement, shall be presumptive evidence of the
amounts due and owing to Agent and Lenders by Borrower; provided, that, any
failure to so record or any error in so recording shall not limit or otherwise
affect Borrower's obligations to pay the Obligations. Agent shall render to
Borrower a monthly accounting of transactions under the Revolving Credit Loan
setting forth the balance of the Loan Account. Each and every such accounting
shall (absent manifest error) be deemed final, binding and conclusive upon
Borrower in all respects as to all matters reflected therein, unless Borrower,
within sixty (60) days after the date any such accounting is rendered, shall
notify Agent in writing of any objection which Borrower may have to any such
accounting, describing in reasonable detail the basis for such objection with
specificity. In that event, only those items expressly objected to in such
notice shall be deemed to be disputed by Borrower. Agent's determination, based
upon the facts available, of any item objected to by Borrower in such notice
shall (absent manifest error) be final, binding and conclusive on Borrower.
1.12 Indemnity. Borrower shall jointly and severally indemnify and
hold each of Agent, Lenders, their respective Affiliates, and each such Person's
respective officers, directors, employees, attorneys, agents and representatives
(each, an "Indemnified Person"), harmless from and against any and all suits,
actions, proceedings, claims, damages, losses, liabilities and expenses
(including attorneys' fees and disbursements and other costs of investigation or
defense, including those incurred upon any appeal) which may be instituted or
asserted against or incurred by any such Indemnified Person as the result of
credit having been extended under this Agreement and the other Loan Documents or
in connection with or arising out of the transactions contemplated hereunder and
thereunder or any actions or failures to act in connection therewith, including
any and all Environmental Liabilities and Costs; provided, that Borrower shall
not be liable for any indemnification to such Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from such Indemnified Person's gross negligence or willful
misconduct, as finally determined by a court of competent jurisdiction after a
final adjudication on the merits. NEITHER AGENT, ANY LENDER, NOR ANY OTHER
INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY HERETO, ANY
SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED OR TERMINATED UNDER THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
1.13 Access. (a) Borrower shall provide full access during normal
business hours, from time to time upon five (5) Business Day's prior notice, to
Agent and any of its officers, employees and agents, up to four times a year
(unless a Default or Event of Default shall have
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occurred and be continuing, in which event Agent and its officers, employees,
designees, agents and representatives shall have access at any and all times,
without limitation as to frequency per year, and without any advance notice), to
the properties, facilities, books, records, suppliers, customers, advisors and
employees (including officers) of Holdings, Borrower and its Subsidiaries, to
the Collateral, to the accountants (including Deloitte & Touche, LLP) of
Holdings, Borrower and the Subsidiaries thereof and to the work papers of such
accountants, with Borrower agreeing to use reasonable best efforts to provide
Agent access to the accountants and their work papers. Without limiting the
generality of the foregoing, Borrower shall (i) permit Agent, and any of its
officers, employees, agents and representatives, to inspect, audit and make
extracts from all of Holdings', Borrower's and its Subsidiaries' records, files
and books of account and (ii) permit Agent, and any of its officers, employees,
agents and representatives, to inspect, review and evaluate the Collateral at
Borrower's and its Subsidiaries' locations and at premises not owned by or
leased to Borrower or any Subsidiary of Borrower. Borrower shall make available
to Agent and its counsel, as quickly as is possible under the circumstances,
originals or copies of all books, records, board minutes, contracts, insurance
policies, environmental audits, business plans, files, financial statements
(actual and pro forma), filings with federal, state and local regulatory
agencies, and other instruments and documents which Agent may request. Borrower
shall deliver any document or instrument necessary for Agent, as it may from
time to time request, to obtain records from any service bureau or other Person
which maintains records for Borrower, and shall maintain duplicate records or
supporting documentation on media, including computer tapes and discs owned by
Borrower. Borrower shall instruct their certified public accountants to make
available to Agent such information and records as Agent may request.
Notwithstanding the foregoing, Borrower shall not be required to provide access
to any of the foregoing information which in the reasonable written opinion of
counsel to Borrower, in form and substance reasonably satisfactory to Agent and
its counsel, is subject to an attorney-client privilege and which cannot be
disclosed (after giving effect to any possible disclosure method or protective
agreement which may be requested by Agent or its counsel) without waiver of such
privilege; provided, however, that in no event shall any information delivered
or requested to be delivered pursuant to Schedule F or G be deemed to be
protected by an attorney-client privilege.
(b) A fee of $500 per day per individual (plus all reasonable out-of-
pocket costs and expenses) in connection with Agent's field examinations
permitted under Section 1.13(a) above and Section 4(c) of the Security Agreement
shall be charged against the Revolving Credit Facility in connection with each
field audit conducted after the Closing Date.
1.14 Taxes. (a) Any and all payments by Borrower hereunder or under
the Revolving Credit Notes shall be made, in accordance with this Section 1.14,
free and clear of and without deduction for any and all present or future Taxes.
If Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under the Revolving Credit Notes, (i) the sum
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 1.14) Agent or Lenders, as applicable, receive an
amount equal to the sum they would have received had no such deductions been
made, (ii) Borrower shall make such deductions, and
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(iii) Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law.
(b) Borrower shall indemnify and pay, within ten (10) days of demand
therefor, Agent and each Lender for the full amount of Taxes (including any
Taxes imposed by any jurisdiction on amounts payable under this Section 1.14)
paid by Agent or such Lender, as appropriate, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
Agent and Lenders shall use reasonable efforts to return any refund with respect
to any Taxes for which Borrower has paid as provided in the foregoing sentence.
1.15 Capital Adequacy; Increased Costs; Illegality. (a) In the event
that any Lender shall have determined that the adoption after the date hereof of
any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) from any central bank or governmental agency or body having
jurisdiction does or would have the effect of increasing the amount of capital,
reserves or other funds required to be maintained by such Lender and thereby
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder, then Borrower shall from time to time within forty-five
(45) days after notice and demand on Borrower by such Lender (together with the
certificate referred to in the next sentence and with a copy to Agent) pay to
Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to the amount of
such cost and showing the basis of the computation of such cost submitted by
such Lender to Borrower and Agent shall, absent manifest error, be final,
conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining of any
Loan, then Borrower shall from time to time, upon demand by such Lender (with a
copy of such demand to Agent), pay to Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost
which is attributable to Borrower. A certificate as to the amount of such
increased cost, submitted to Borrower and Agent by such Lender, shall be
conclusive and binding on Borrower for all purposes, absent manifest error. Each
Lender agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to in clause (i) or (ii) above which would result in any
such increased cost to such Lender, such Lender shall, to the extent not
inconsistent with such Lender's internal policies of general application, use
reasonable commercial efforts to minimize costs and expenses incurred by it and
payable to it by Borrower pursuant to this Section 1.15(b).
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans.
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Notwithstanding any other provision of this Agreement and without
affecting in any manner the rights of Agent and Lenders hereunder, Borrower
shall have no rights under this Agreement (but shall have all applicable
obligations hereunder), and no Lender shall be obligated to make any Loan on the
Closing Date, or to take, fulfill, or perform any other action hereunder, until
the following conditions have been satisfied, in Agent's reasonable discretion,
or waived in writing by Agent:
(a) Credit Agreement. This Agreement or counterparts hereof shall have
been duly executed by, and delivered to, Borrower, Agent and Lenders.
(b) Loan Documents. Agent shall have received such guaranties,
documents, instruments, agreements and legal opinions as Agent shall request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including all guaranties, documents, instruments, agreements and
legal opinions listed in the Schedule of Documents attached hereto as Schedule
E, each in form and substance satisfactory to Agent.
(c) Repayment of Prior Loans. A pay-off letter satisfactory to Agent
confirming that all of the Prior Lender Obligations will be repaid in full from
the proceeds of the initial Revolving Credit Advance and all Liens upon any of
the property of Holdings, Borrower or any of its Subsidiaries in favor of Prior
Lender shall be terminated and released by Prior Lender immediately upon such
payment.
(d) Governmental Approvals. Evidence satisfactory to Agent that
Borrower has obtained consents and acknowledgments of all Persons whose consents
and acknowledgments may be required, including, but not limited to, all
requisite Governmental Authorities, to the terms, and to the execution and
delivery, of this Agreement, the other Loan Documents and the consummation of
the transactions contemplated hereby and thereby.
(e) Insurance. Evidence satisfactory to Agent that the insurance
policies provided for in Section 3.21 and Schedule 3.21 are in full force and
effect, together with appropriate evidence showing loss payable and/or
additional insured clauses or endorsements, as requested by Agent, in favor of
Agent, on behalf of Lenders, and in form and substance satisfactory to Agent.
(f) Opening Availability. The Eligible Accounts and Eligible Inventory
supporting the initial Revolving Credit Advance and the amount of the reserves
to be established on the Closing Date shall be sufficient in value, as
determined by Agent, to provide Borrower with excess Borrowing Availability,
after giving effect to the initial Revolving Credit Advance and the consummation
of the transactions contemplated hereunder (on a pro forma basis and without any
deterioration in trade payables) of at least $1,000,000.
(g) Payment of Fees. Payment by Borrower to GE Capital of the fees
required to be paid on the Closing Date in the respective amounts specified in
GE Capital Fee Letter.
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(h) Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the chief executive officer and chief financial
officer of Borrower, dated the Closing Date, stating that since June 30, 1995,
(i) there has been no material adverse change in the business, results of
operations, financial condition or prospects of Borrower or any of its
Subsidiaries or the industries in which Borrower or any Subsidiary operates; and
(ii) no litigation has been commenced which could reasonably be expected to have
a Material Adverse Effect or could challenge any of the transactions
contemplated by this Agreement and the other Loan Documents.
(i) Waivers. Agent, on behalf of Lenders, shall have received landlord
waivers and consents, bailee letters and mortgagee agreements in form and
substance satisfactory to Agent, in each case as required pursuant to Section
5.11. In the event Borrower is unable to obtain a landlord waiver and consent,
bailee letter and/or mortgage agreement acceptable to Agent as to any such
location on or before the Closing Date, Eligible Inventory at that location
shall be subject to a reserve established by Agent in accordance with Section
5.11.
(j) Other Indebtedness. The terms and conditions of all long-term debt
of Holdings, Borrower and any Subsidiaries thereof shall be acceptable to Agent,
in its sole discretion, and Agent and Lenders shall have received any and all
subordination and/or intercreditor agreements, all in form and substance
reasonably satisfactory to Agent, in its sole discretion, as Agent shall have
deemed necessary or appropriate with respect to such indebtedness, including,
without limitation, (i) the Holdings Subordination Agreement executed and
delivered by Holdings and (ii) the TimeMasters Subordination Agreement executed
and delivered by TimeMasters.
(k) Environmental Reports. Agent shall have received such
environmental review and audit reports with respect to the properties of
Borrower and any of its Subsidiaries as Agent shall have requested and Agent
shall be satisfied, in its sole discretion, with the contents of all such
environmental reports.
(l) Quarter Financials. Agent shall have received Holdings' Form 10-Q
for their Fiscal Quarter ended September 30, 1995 and any other reports filed
with the Securities and Exchange Commission from September 30, 1995 to the
Closing Date, and there shall be no material difference between such unaudited
financial statements and the draft financial statements for such period
previously provided to Agent.
(m) Financial Condition. Borrower shall have provided Agent with their
current operating statements, a consolidated and consolidating balance sheet and
statement of cash flows, and projections, and a Borrowing Base Certificate
certified by Borrower's Chief Financial Officer, in each case in form and
substance satisfactory to Agent, and Agent shall be satisfied, in its sole
discretion, with all of the foregoing, including:
(i) the Pro Forma as of the Closing Date in accordance with
Section 3.4 hereof;
(ii) Projections in accordance with Section 3.4 hereof; and
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(iii) a certificate of the Chief Executive Officer or Chief
Financial Officer of Borrower, based on such Pro Forma and Projections, to
the effect that (A) Borrower will be Solvent upon the consummation of the
transactions contemplated herein; (B) the Pro Forma fairly presents the
financial condition of Borrower as of the date thereof after giving effect
to the transactions contemplated by the Loan Documents; (C) the Projections
are reasonable estimates of the future financial performance of Borrower
subsequent to the date thereof based upon the historical performance of
Borrower's predecessors; and (D) containing such other statements with
respect to the solvency of Borrower and matters related thereto as the
Agent shall request.
2.2 Further Conditions to Each Revolving Credit Advance. It shall be a
further condition to the initial and each subsequent Revolving Credit Advance
that the following statements shall be true on the date of each such advance or
funding, as the case may be:
(a) All of Borrower's representations and warranties (after giving
effect to the delivery and/or acceptance of any updated Schedules hereto which
is expressly permitted by Section 5.8) contained herein or in any of the other
Loan Documents shall be true and correct on and as of the Closing Date and the
date on which each such Revolving Credit Advance is made as though made on and
as of such date, except to the extent that any such representation or warranty
expressly relates to an earlier date and except for changes therein expressly
permitted or expressly contemplated by this Agreement.
(b) No Material Adverse Effect shall have occurred since the date
hereof.
(c) No event shall have occurred and be continuing, or would result
from the making of any Revolving Credit Advance, which constitutes or would
constitute a Default or an Event of Default.
(d) After giving effect to such Revolving Credit Advance the aggregate
principal amount of the Revolving Credit Loan shall not exceed the maximum
amount permitted by Section 1.2(a) without requiring that a payment be made to
Agent or any Lender.
The request and acceptance by Borrower of the proceeds of any Revolving Credit
Advance shall be deemed to constitute, as of the date of such request or
acceptance, (i) a representation and warranty by Borrower that the conditions in
this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrower of the
granting and continuance of Agent's Liens, on behalf of itself and Lenders,
pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make Revolving Credit Advances, Borrower makes
the following representations and warranties to Agent and each Lender, each and
all of which shall survive the execution and delivery of this Agreement:
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3.1 Corporate Existence; Compliance with Law. Borrower and each
Subsidiary thereof (i) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has been
duly qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification; (ii) has the requisite corporate power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates under lease and to
conduct its business as now, heretofore and proposed to be conducted; (iii) has
all material licenses, permits, consents or approvals from or by, and has made
all filings with, and has given all notices to, all Governmental Authorities
having jurisdiction, to the extent required for such ownership, operation and
conduct; (iv) is in compliance with its certificate or articles of incorporation
and by-laws; and (v) is in material compliance with all applicable provisions of
law.
3.2 Executive Offices. The current location of each Loan Party's Chief
executive office and principal place of business is set forth in Schedule 3.2
(as may be updated from time to time) and, as of the Closing Date, except as
described on Schedule 3.2 (as may be updated from time to time), none of such
locations have changed within the past six (6) months.
3.3 Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by Holdings, each Borrower and each
Subsidiary thereof of the Loan Documents and all other instruments and documents
to be delivered by each such Person, and the creation of all Liens provided for
therein: (i) are within such Person's corporate power; (ii) have been duly
authorized by all necessary or proper corporate and shareholder action; (iii)
are not in contravention of any provision of such Person's certificate or
articles or incorporation or bylaws; (iv) will not violate any law or
regulation, or any order or decree of any court or governmental instrumentality;
(v) will not conflict with or result in the breach or termination of, constitute
a default under or accelerate any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which such
Person is a party or by which such Person or any of its property is bound; (vi)
will not result in the creation or imposition of any Lien upon any of the
property of such Person other than those in favor of Agent, on behalf of itself
and Lenders, all pursuant to the Loan Documents; and (vii) do not require the
consent or approval of any Governmental Authority or any other Person, except
those referred to in Section 2.1(d), all of which will have been duly obtained,
made or complied with prior to the Closing Date. On or prior to the Closing
Date, each of the Loan Documents shall have been duly executed and delivered for
the benefit of or on behalf of Holdings, Borrower and each Subsidiary thereof
(as applicable) and each Loan Document shall then constitute a legal, valid and
binding obligation of Holdings, Borrower and such Subsidiary, to the extent it
is a party thereto, enforceable against it in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting the rights of creditors generally or by application of general
principles of equity.
3.4 Financial Statements and Projections. All financial statements
(the "Financial Statements"), except for the Projections, concerning Holdings,
Borrower and its respective Subsidiaries which are referenced below have been
prepared in accordance with GAAP consistently applied throughout the periods
involved (except as disclosed therein and except, with respect to
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unaudited financial statements, for the absence of footnotes and normal year-end
audit adjustments) and do present fairly in all material respects the financial
condition of the corporations covered thereby as at the dates thereof and the
results of their operations for the periods then ended.
(a) The following financial statements attached hereto as Schedule
3.4(A) have been delivered on the date hereof:
(i) The audited balance sheet at June 30, 1995 and 1994 and the
related statements of income of Holdings and its Subsidiaries for the
Fiscal Years then ended, certified by Deloitte & Touche, LLP.
(ii) The unaudited balance sheet at September 30, 1995 and the
related statement of income of Holdings and its Subsidiaries for the Fiscal
Quarter then ended.
(b) Pro Forma. The Pro Forma balance sheet of Holdings and its
Subsidiaries and of Borrower, Asia/Pacific and ColorMasters delivered on the
date hereof and attached hereto as Schedule 3.4(B) were prepared by Borrower
assuming the consummation of the Related Transactions and based on the estimated
balance sheet of Holdings and Borrower and Asia/Pacific as of December 31, 1995
and were prepared in accordance with GAAP, with only such adjustments thereto as
would be required in accordance with GAAP.
(c) Projections. The Projections delivered on the date hereof and
attached hereto as Schedule 3.4(C) have been prepared by Borrower in light of
the past operations of the business of Borrower and its Subsidiaries, and
reflect projections for the three year period beginning on January 1, 1996 on a
month-by-month basis for the first year and on a year-by-year basis thereafter.
The Projections represent as of the date hereof the good faith and reasonable
estimates of the future financial performance of Borrower based on the
historical performance of Borrower and its Subsidiaries (it being understood
that such Projections are not warranties of future performance).
3.5 Collateral Reports. Borrower has delivered the Collateral
Reports identified on Schedule G and each such Collateral Report complies with
the description thereof contained on Schedule G.
3.6 Material Adverse Effect. Since June 30, 1995 neither Borrower
nor any Subsidiary thereof has incurred any obligations, contingent liabilities,
or liabilities for Charges, long-term leases or unusual forward or long-term
commitments which are not reflected in the pro forma balance sheet of Borrower
and its Subsidiaries and which could, alone or in the aggregate, have or result
in a Material Adverse Effect. No Material Adverse Effect has occurred between
June 30, 1995 and the Closing Date.
3.7 Ownership of Property; Liens. (a) Except as described on
Schedule 3.7 (as may be updated from time to time), the real estate ("Real
Estate") listed on Schedule 3.7 (as may be updated from time to time)
constitutes all of the real property owned, leased, or used in its business by
Borrower or any Subsidiaries (other than LaserMaster Europe) thereof. Borrower
and each
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Subsidiary (other than LaserMaster Europe) thereof (i) owns good and marketable
fee simple title to all of its owned real estate, and valid and marketable
leasehold interests in all of its Leases (both as lessor and lessee, sublessee
or assignee), all as described on Schedule 3.7 (as may be updated from time to
time), and (ii) good and marketable title to, or valid leasehold interests in,
all of its other properties and assets, and none of the properties and assets of
Borrower or any Subsidiaries (other than LaserMaster Europe) thereof are, to the
best of Borrower's knowledge solely with respect to any leased Real Estate,
subject to any Liens, except Permitted Liens; and Borrower or such Subsidiary
(other than LaserMaster Europe) has received all deeds, assignments, waivers,
consents, non-disturbance and recognition or similar agreements, bills of sale
and other documents, and duly effected all recordings, filings and other actions
necessary to establish, protect and perfect Borrower's or such Subsidiary's
(other than LaserMaster Europe), right, title and interest in and to all such
real estate and other assets or property. Except as described on Schedule 3.7
(provided that, solely with respect to this sentence, Schedule 3.7 may not be
updated unless expressly consented to in writing by Agent and Requisite
Lenders), (i) neither Borrower nor any Subsidiary (other than LaserMaster
Europe) thereof nor any other party to any such Lease described such Schedule
3.7 is in default in any material respect of its obligations thereunder or has
delivered or received any notice of default under any such Lease, and no event
has occurred which, with the giving of notice, the passage of time or both,
would constitute a default in any material respect under any such Lease; (ii)
neither Borrower nor any Subsidiary (other than LaserMaster Europe) thereof owns
or holds or is obligated under or a party to, any option, right of first refusal
or any other contractual right to purchase, acquire, sell, assign or dispose of
any real property owned or leased by Borrower or such Subsidiary (other than
LaserMaster Europe) except as set forth therein; and (iii) no portion of any
real property owned or leased by Borrower or any Subsidiary (other than
LaserMaster Europe) thereof has suffered any material damage by fire or other
casualty loss or a Release which has not heretofore been completely repaired and
restored to its original condition or is being remedied. All material permits
required to have been issued or appropriate to enable the real property owned or
leased by Borrower or such Subsidiary (other than LaserMaster Europe) to be
lawfully occupied and used for all of the purposes for which they are currently
occupied and used, have been lawfully issued and are, as of the date hereof, in
full force and effect.
3.8 Restrictions; No Default. No contract, lease, agreement or other
instrument to which Borrower or any Subsidiary thereof is a party or by which it
or any of its properties or assets is bound or affected and no provision of
applicable law or governmental regulation has or results in a Material Adverse
Effect, or could have or result in a Material Adverse Effect. Neither Borrower
nor any Subsidiary (other than LaserMaster Europe) thereof is in default, and to
Borrower's or Subsidiary's (other than LaserMaster Europe) knowledge no third
party is in default, under or with respect to any material contract, agreement,
lease or other instrument to which it is a party. LaserMaster Europe is not in
default, and to Borrower's knowledge no third party is in default, under or with
respect to any contract, agreement, lease or other instrument to which
LaserMaster Europe is a party which could reasonably be expected to have a
Material Adverse Effect.
3.9 Labor Matters. No strikes or other labor disputes against
Borrower or any Subsidiary (other than LaserMaster Europe) thereof are pending
or, to Borrower's knowledge,
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threatened. To the best of Borrower's knowledge, hours worked by and payment
made to employees of Borrower and any Subsidiaries (other than LaserMaster
Europe) thereof have not been in violation of the Fair Labor Standards Act or
any other applicable federal, state, local or foreign law dealing with such
matters. All payments due from Borrower or any Subsidiary (other than
LaserMaster Europe) thereof on account of employee health and welfare insurance
have been paid or accrued as a liability on the books of Borrower. Except as
set forth in Schedule 3.9 (as may be updated from time to time), neither
Borrower nor any Subsidiary (other than LaserMaster Europe) thereof has
obligations under any collective bargaining agreement, management agreement,
consulting agreement or any written employment agreement with any officer (other
than an employment at-will agreement). There is no organizing activity
involving Borrower or any Subsidiary (other than LaserMaster Europe) thereof
pending or, to Borrower's knowledge, threatened by any labor union or group of
employees. Except as set forth in Schedule 3.9 (as may be updated from time to
time), there are no representation proceedings pending or, to Borrower's
knowledge, threatened with the National Labor Relations Board, and no labor
organization or group of employees of Borrower or any Subsidiary (other than
LaserMaster Europe) thereof has made a pending demand for recognition. Except
as set forth in Schedule 3.9 (as may be updated from time to time), there are no
complaints or charges against Borrower or any Subsidiary (other than LaserMaster
Europe) thereof pending or threatened to be filed with any federal, state, local
or foreign court, governmental agency or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by Borrower or any Subsidiary (other than LaserMaster Europe) thereof
of any individual.
3.10 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Schedule 3.10, neither Holdings nor
Borrower has any Subsidiaries, is engaged in any joint venture or partnership
with any other Person, or is an Affiliate of any other Person. All of the
issued and outstanding Stock of Borrower and each Subsidiary thereof is owned by
each of the Stockholders named on Schedule 3.10. Except as set forth on
Schedule 3.10, there are no outstanding rights to purchase, options, warrants or
similar rights or agreements pursuant to which Borrower or any Subsidiary
thereof may be required to issue or sell any Stock or other equity security of
any Subsidiary. As of the Closing Date, all outstanding Indebtedness of
Borrower and any Subsidiaries thereof is described in Section 6.3 (including
Schedule 6.3).
3.11 Government Regulation. Neither Borrower nor any Subsidiary
thereof is an "investment company" or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940 as amended. Neither Borrower nor
any Subsidiary thereof is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, or any other federal or state
statute that restricts or limits its ability to incur Indebtedness or to perform
its obligations hereunder, and the making of the Revolving Credit Advances by
Lenders, the application of the proceeds thereof and repayment thereof by
Borrower or such Subsidiary and the consummation of the transactions
contemplated by this Agreement and the other Loan Documents will not violate any
provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.
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3.12 Margin Regulations. Neither Borrowers nor any Subsidiary thereof
is engaged, nor will it engage, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin security" as such term is defined in Regulation U or G
of the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") as now and from time to time hereafter in effect (such securities being
referred to herein as "Margin Stock"). Neither Borrower nor any Subsidiary
thereof owns any Margin Stock, and the proceeds of the Revolving Credit Advances
will not be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any Margin Stock
or for any other purpose which might cause any of the loans or other extensions
of credit under this Agreement to be considered a "purpose credit" within the
meaning of Regulation G, T, U or X of the Federal Reserve Board.
3.13 Taxes. All federal, state, local and foreign tax returns, reports
and statements, including, but not limited to, information returns required to
be filed by Borrower or any Subsidiary thereof, have been filed with the
appropriate Governmental Authority and all material Charges and other
impositions shown thereon to be due and payable have been paid prior to the date
on which any fine, penalty, interest or late charge may be added thereto for
nonpayment thereof (or any such fine, penalty, interest, late charge or loss has
been paid), and each Borrower and each Subsidiary thereof has paid when due and
payable all material Charges required to be paid by it excluding, in each case,
Charges or other amounts being contested in accordance with Section 5.2(b).
Proper and accurate amounts have been withheld by Borrower or each Subsidiary
thereof from its respective employees (based on withholding forms completed by
such employees) for all periods in compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
Governmental Authorities. Schedule 3.13 (as may be updated from time to time)
sets forth as of the Closing Date those taxable years for which Borrower's tax
returns are currently being audited by the IRS or any other applicable
Governmental Authority and any assessments or threatened assessments in
connection with such audit, or otherwise currently outstanding. Except as
described on Schedule 3.13 (as may be updated from time to time), neither
Borrower nor any Subsidiary thereof has executed or filed with the IRS or any
other Governmental Authority any agreement or other document extending, or
having the effect of extending, the period for assessment or collection of any
Charges. Borrowers, their Subsidiaries and their respective predecessors are not
liable for any Charges or the documents delivered in connection therewith: (i)
under any agreement (including, without limitation, any tax sharing agreements
or (ii) to the best of Borrower's knowledge, as a transferee. As of the Closing
Date, neither Borrower nor any Subsidiary thereof has agreed or been requested
to make any adjustment under IRC Section 481(a) by reason of a change in
accounting method or otherwise which would have a Material Adverse Effect.
Solely for purposes of this Section 3.13, (i) "material Charges" shall mean any
Charges which are greater than $100,000 in amount and (ii) any representation
and warranty made with respect to LaserMaster Europe shall be made to the best
knowledge of Borrower.
3.14 ERISA. (a) Schedule 3.14 (as may be updated from time to time)
lists all Plans maintained or contributed to by Borrower or any Subsidiary
thereof and all Qualified Plans
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maintained or contributed to by any ERISA Affiliate, and separately identifies
the Title IV Plans, Multiemployer Plans, any multiple employer plans subject to
Section 4064 of ERISA, unfunded Pension Plans, Welfare Plans and Retiree Welfare
Plans. Each Qualified Plan has been determined by the IRS to qualify under
Section 401 of the IRC, and the trusts created thereunder have been determined
to be exempt from tax under the provisions of Section 501 of the IRC, and to the
best knowledge of Borrower nothing has occurred which would cause the loss of
such qualification or tax-exempt status. Each Plan is in compliance in all
material respects with the applicable provisions of ERISA and the IRC, including
the filing of reports required under the IRC or ERISA, and with respect to each
Plan, other than a Qualified Plan, all required contributions and benefits have
been paid in accordance with the provisions of each such Plan. Neither Borrower,
nor any Subsidiary or ERISA Affiliate thereof, with respect to any Qualified
Plan, has failed to make any contribution or pay any amount due as required by
Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan.
With respect to all Retiree Welfare Plans, the present value of future
anticipated expenses pursuant to the latest actuarial projections of liabilities
does not exceed $100,000, and copies of such latest projections have been
provided to Agent; with respect to Pension Plans, other than Qualified Plans,
the present value of the liabilities for current participants thereunder using
PBGC interest assumptions does not exceed $100,000. Neither Borrower nor any
Subsidiary or ERISA Affiliate thereof has engaged in a prohibited transaction,
as defined in Section 4975 of the IRC or Section 406 of ERISA, in connection
with any Plan, which would subject Borrower or any Subsidiary thereof (after
giving effect to any exemption) to a material tax on prohibited transactions
imposed by Section 4975 of the IRC or any other material liability.
(b) Except as set forth in Schedule 3.14 (as may be updated from time
to time): (i) no Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA
Event or event described in Section 4062(e) of ERISA with respect to any Title
IV Plan has occurred or is reasonably expected to occur; (iii) there are no
pending, or to the knowledge of Borrower or any Subsidiary thereof, threatened
claims, actions or lawsuits (other than claims for benefits in the normal
course), asserted or instituted against (x) any Plan or its assets, (y) any
fiduciary with respect to any Plan or (z) Borrower, any Subsidiary thereof or
any ERISA Affiliate with respect to any Plan; (iv) neither Borrower nor any
Subsidiary or ERISA Affiliate thereof has incurred or reasonably expects to
incur any withdrawal liability (and no event has occurred which, with the giving
of notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 of ERISA as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years neither Borrower nor any
Subsidiary or ERISA Affiliate thereof has engaged in a transaction which
resulted in a Title IV Plan with Unfunded Liabilities being transferred outside
of the "controlled group" (within the meaning of Section 4001(a)(14) of ERISA)
of any such entity; (vi) no Plan which is a Retiree Welfare Plan provides for
continuing benefits or coverage for any participant or any beneficiary of a
participant after such participant's termination of employment (except as may be
required by Section 4980B of the IRC and at the sole expense of the participant
or the beneficiary of the participant); (vii) Borrower, each Subsidiary thereof
and each ERISA Affiliate have complied with the notice and continuation coverage
requirements of Section 4980B of the IRC and the regulations thereunder except
where the failure to comply could not have or result in any Material Adverse
Effect; and (viii) no liability under any Plan has been funded, nor has such
obligation been
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satisfied, with the purchase of a contract from an insurance company that is not
rated AAA by the Standard & Poor's Corporation or the equivalent by another
nationally recognized rating agency.
3.15 No Litigation. Except as set forth in Schedule 3.15, no action,
claim or proceeding is now pending or, to the knowledge of Borrower, threatened
against Borrower or any Subsidiary thereof, before any court, board, commission,
agency or instrumentality of any federal, state, local or foreign government or
of any agency or subdivision thereof, or before any arbitrator or panel of
arbitrators, (i) which challenges Borrower's or such Subsidiary's right or power
to enter into or perform any of its obligations under the Loan Documents, or the
validity or enforceability of any Loan Document or any action taken thereunder,
or (ii) which, if determined adversely, would have or result in a Material
Adverse Effect, nor to the best knowledge of Borrower does a state of facts
exist which is reasonably likely to give rise to such proceedings.
3.16 Brokers. No broker or finder acting on behalf of Borrower or any
Subsidiary thereof brought about the obtaining, making or closing of the loans
made pursuant to this Agreement or the transactions contemplated by the Loan
Documents and neither Borrower nor any Subsidiary thereof has obligations to any
Person in respect of any finder's or brokerage fees in connection therewith.
3.17 Employment Matters. Except as set forth in Schedule 3.17 (as may
be updated from time to time), there are no employment, consulting or management
agreements (other than an employment at-will agreement) covering any executive
management employee of Borrower or Asia/Pacific. A true and complete copy of
each such agreement has been furnished to Agent.
3.18 Patents, Trademarks, Copyrights and Licenses. Except as otherwise
set forth in Schedule 3.18 (provided that, solely with respect to this sentence,
Schedule 3.18 may not be updated unless expressly consented to in writing by
Agent and Requisite Lenders), Borrower and each Subsidiary (other than
LaserMaster Europe) thereof owns all material licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications, and
trade names necessary to continue to conduct its business as heretofore
conducted by it or proposed to be conducted by it, each of which is listed,
together with Copyright Office or Patent and Trademark Office application or
registration numbers, where applicable, on Schedule 3.18 (as may be updated from
time to time). Schedule 3.18 (as may be updated from time to time) also lists
all tradenames or other names under which Borrower or any Subsidiary (other than
LaserMaster Europe) thereof conducts business. As of the Closing Date, to the
best of Borrower's knowledge, neither the conduct of its business nor the
conduct of any of its Subsidiaries' business infringes in any material respect
upon any intellectual property right of any other Person.
3.19 Full Disclosure. No information contained in this Agreement, any
of the other Loan Documents, the Projections, the Financials, the Collateral
Reports or any written statement furnished by or on behalf of Borrower or any
Subsidiary thereof pursuant to the terms of this Agreement, which has previously
been delivered to Agent, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained herein
or therein not misleading in light of the circumstances under which they were
made. The Liens granted
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to Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents
will at the Closing Date, assuming that UCC financing statements have been
timely filed in the appropriate offices, be fully perfected first priority Liens
in and to the Collateral described therein, subject only to Liens set forth in
Schedule 6.7.
3.20 Hazardous Materials. Except as set forth on Schedule 3.20 (as may
be updated from time to time), the Real Property is free of known contamination
from any Hazardous Material. In addition, Schedule 3.20 (as may be updated from
time to time) discloses material environmental liabilities of Borrower or any
Subsidiary thereof of which any of them have knowledge (i) related to
noncompliance with the Environmental Laws, or (ii) associated with the Real
Estate. Neither Borrower nor any Subsidiary thereof has caused or suffered to
occur any Release with respect to any Hazardous Material at, under, above or
upon any real property which it owns or leases. Neither Borrower nor any
Subsidiary thereof is involved in operations that are likely to result in the
imposition of any Lien on its assets or any material liability on Borrower or
such Subsidiary, under any Environmental Law, and neither Borrower nor any
Subsidiary thereof has permitted any tenant or occupant of such premises to
engage in any such activity. Borrower has provided to Agent copies of all
existing environmental reports, reviews and audits and all written information
pertaining to actual or potential Environmental Liabilities and Costs, in each
case relating to Borrower or any Subsidiary thereof.
3.21 Insurance Policies. Schedule 3.21 (as may be updated from time to
time) lists all insurance of any nature maintained for current occurrences by
Borrower or any Subsidiary (other than LaserMaster Europe) thereof.
3.22 Deposit and Disbursement Accounts. Except for any accounts
maintained by LaserMaster Europe in any financial institution or bank located in
Europe and in which deposits do not exceed $25,000 in the aggregate at any time,
Schedule 3.22 lists all banks and other financial institutions at which Borrower
or any Subsidiary thereof maintains deposits and/or other accounts, including
any disbursement accounts, and such Schedule correctly identifies the name,
address and telephone number of each depository, the name in which the account
is held, a description of the purpose of the account, and the complete account
number.
3.23 [Intentionally Omitted].
3.24 [Intentionally Omitted].
3.25 Agreements and Other Documents. As of the Closing Date, Borrower
has provided to Agent or its counsel, on behalf of Lenders, accurate and
complete copies (or summaries) of all of the following agreements or documents
to which Borrower or any Subsidiary (other than LaserMaster Europe) thereof is
subject: (a) Plans; (b) supply agreements not terminable by Borrower or such
Subsidiary, as appropriate, within sixty (60) days following written notice
issued by Borrower or such Subsidiary; (c) purchase agreements not terminable by
Borrower or such Subsidiary, as appropriate, within 60 days following written
notice issued by Borrower or such Subsidiary; (d) Leases; (e) any lease of
equipment having a remaining term of one year or longer
-20-
and requiring aggregate rental and other payments in excess of $100,000 per
annum; (f) licenses and permits necessary for the conduct of Borrower's or such
Subsidiary's businesses; (g) instruments or documents evidencing Indebtedness of
Borrower or such Subsidiary and any security interest granted by Borrower or
such Subsidiary with respect thereto; and (h) instruments and agreements
evidencing the issuance of any equity securities, warrants, rights or options to
purchase equity securities of Borrower or such Subsidiary.
3.26 FEIN. Schedule 3.26 lists the FEIN or the Federal Employer
Identification Number of Borrower, Asia/Pacific and ColorMasters.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices. (a) Borrower hereby covenants and agrees that
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent and/or Lenders, as required, financial statements, notices and
Projections at the times, to the Persons and in the manner set forth in Schedule
F.
(b) Borrower hereby covenants and agrees that from and after the
Closing Date, it shall deliver to Agent and/or Lenders, as required, the various
Collateral Reports at the times, to the Persons and in the manner set forth in
Schedule G.
4.2 Communication with Accountants. Borrower authorizes Agent and each
Lender to communicate directly with its independent certified public accountants
including Deloitte & Touche, LLP, and authorizes those accountants and advisors
to disclose to Agent and each Lender any and all financial statements and other
supporting financial documents and schedules relating to Borrower and its
Subsidiaries (including, without limitation, copies of any issued management
letters) with respect to the business, financial condition and other affairs of
Borrower or any Subsidiary thereof.
5. AFFIRMATIVE COVENANTS
Borrower hereby covenants and agrees that, unless Agent shall
otherwise consent in writing, from and after the date hereof and until the
Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Borrower shall,
and shall cause each Subsidiary thereof, to: (a) do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and its rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder; (c) at all
times maintain, preserve and protect all of its copyrights, patents, trademarks,
trade names and all other intellectual property and rights as licensee or
licensor thereof which are material to the business of Borrower and its
Subsidiaries and preserve all the remainder of its material assets and
properties, used or useful in the conduct of its business, and keep the same in
good repair, working
-21-
order and condition (taking into consideration ordinary wear and tear) and from
time to time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
(d) transact business only in such corporate and trade names as are set forth in
Schedule 5.1.
5.2 Payment of Obligations. (a) Subject to Section 5.2(b), Borrower
shall pay and discharge or cause to be paid and discharged (A) promptly all
Charges which are not otherwise contested pursuant to Section 5.2(b), imposed
upon it, its income and profits, or any of its property (real, personal or
mixed), and (B) all lawful claims for labor, materials, supplies and services or
otherwise, before any thereof shall become past due unless contested by Borrower
in a good faith contest, by appropriate proceedings, provided adequate reserves
with respect thereto all maintained on the books of Borrower in accordance with
GAAP.
(b) Borrower may in good faith contest, by appropriate proceedings,
the validity or amount of any Charges, provided, that, at the time of
commencement of any such action or proceeding, and during the pendency thereof
(i) no Default or Event of Default shall have occurred and be continuing, (ii)
adequate reserves with respect thereto are maintained on the books of Borrower
in accordance with GAAP, (iii) such contest is maintained in good faith, (iv)
none of the Collateral becomes subject to forfeiture or loss as a result of such
Charges or claims, (v) no Lien shall attach to secure payment of such Charges or
claims other than inchoate tax liens, and (vi) Borrower shall promptly pay or
discharge such contested Charges and all additional charges, interest, penalties
and expenses, if any, and shall deliver to Agent evidence acceptable to Agent of
such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to Borrower or the conditions set forth in this Section
5.2(b) are no longer met.
5.3 Books and Records. Borrower shall keep adequate records and books
of account with respect to Borrower's and each Subsidiary's business activities,
in which proper entries, reflecting all financial transactions, are made in
accordance with GAAP and on a basis consistent with the Financial Statements
referred to in Schedule 3.4.
5.4 Litigation. Borrower shall notify Agent in writing, promptly upon
learning thereof, of any litigation commenced or threatened against Borrower or
any Subsidiary thereof, and of the institution against it of any suit or
administrative proceeding that (a) seeks damages in excess of $200,000 or (b)
seeks any material injunctive relief.
5.5 Insurance. (a) Borrower shall, at its sole cost and expense,
maintain the policies of insurance described on Schedule 3.21 in form and with
insurers rated A or better by Bests. Such policies shall be in such amounts as
are set forth in Schedule 3.21. Borrower shall notify Agent promptly of any
occurrence causing a material loss or decline in value of any Collateral and the
estimated (or actual, if available) amount of such loss or decline. So long as
any Default or Event of Default shall have occurred and be continuing or if the
casualty loss exceeds $100,000: Borrower hereby directs all present and future
insurers under its "All Risk" policies of insurance (and including any key man
life insurance policies obtained on behalf of Borrower or any of its
Subsidiaries (other than LaserMaster Europe)) to pay all proceeds payable
thereunder with respect
-22-
to any Collateral directly to Agent, on behalf of itself and Lenders and
irrevocably makes, constitutes and appoints Agent (and all officers, employees
or agents designated by Agent) as Borrower's true and lawful agent and attorney-
in-fact for the purpose of making, settling and adjusting claims under such
policies of insurance and endorsing the name of Borrower on any check or other
item of payment for the proceeds of such policies of insurance. In the event
Borrower at any time or times hereafter shall fail to obtain or maintain any of
the policies of insurance required above or to pay any premium in whole or in
part relating thereto, Agent, without waiving or releasing any Obligations or
Default or Event of Default hereunder, may (upon 30 days' prior written notice
to Borrower if no Default or Event of Default shall have occurred and be
continuing) at any time or times thereafter (but shall not be obligated to)
obtain and maintain such policies of insurance and pay such premiums and take
any other action with respect thereto which Agent deems advisable. All sums so
disbursed, including attorneys, fees, court costs and other charges related
thereto, shall be payable, on demand, by Borrower to Agent and shall be
additional Obligations hereunder secured by the Collateral, provided, that, if
and to the extent Borrower fails to promptly pay any of such sums upon demand
therefor, Agent is authorized to, and at its option may, make or cause to be
made Revolving Credit Advances on behalf of Borrower for payment thereof.
(b) Agent reserves the right at any time, upon any change in
Borrower's risk profile (including, without limitation, any change in the
product mix maintained by Borrower or any laws affecting the potential liability
of Borrower), to require additional forms and limits of insurance to ensure that
Borrower and each Subsidiary thereof is protected by insurance in amounts and
with coverage customary for its industry. If requested by Agent, Borrower shall
deliver to Agent from time to time (but not more than once per year so long as
no Default or Event of Default shall have occurred and be continuing) a report
of a reputable insurance broker, satisfactory to Agent, with respect to its
insurance policies.
(c) Borrower shall deliver to Agent endorsements (i) to all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) to all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional insured.
(d) The loss, if any, under any property insurance required to be
carried by this Section 5.5 with respect to any Collateral shall be adjusted
with the insurance companies or otherwise collected, including the filing of
appropriate proceedings by Borrower or its Subsidiaries (other than LaserMaster
Europe), subject to the reasonable approval of the Agent in the case of claims
in excess of $100,000. If the proceeds payable under any policy of property
insurance with respect to any Collateral are $100,000 or less, Borrower or its
Subsidiaries shall have the right to use such proceeds to repair or replace the
damaged or destroyed property, provided that a Default or an Event of Default
shall not have occurred and be continuing at the time the proceeds are paid. If
a Default or an Event of Default shall have occurred and be continuing at the
time such insurance proceeds with respect to any Collateral are paid, or if such
insurance proceeds are more than $250,000, such insurance proceeds shall be
applied to the Obligations in accordance with Section 1.2(f) (and,
notwithstanding anything else to the contrary in this Agreement or otherwise, to
permanently reduce the Revolving Credit Loan Commitment by the amount of such
proceeds that
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are, or are available to be, applied against the Revolving Credit Loan) unless
the Requisite Lenders agree to permit part or all of such insurance proceeds to
be used to repair or replace the damaged or destroyed property.
5.6 Compliance with Laws. Borrower shall, and shall cause each
Subsidiary thereof to, comply in all material respects with all federal, state
and local laws and regulations applicable to it, including those relating to
licensing, ERISA and labor matters.
5.7 [Intentionally Omitted.]
5.8 Supplemental Disclosure. On the request of Agent (in the event
that such information is not otherwise delivered by Borrower to Agent pursuant
to this Agreement), so long as there are Obligations outstanding hereunder, but
not more frequently than annually absent the occurrence and continuance of a
Default or an Event of Default, Borrower will supplement each schedule or
representation herein with respect to any matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in such schedule or as an exception to such
representation or which is necessary to correct any information in such schedule
or representation which has been rendered inaccurate thereby; provided, however,
that such supplement to such schedule or representation shall not be deemed an
amendment thereof unless expressly consented to in writing by Agent and
Requisite Lenders, and no such amendments, except as the same may be consented
to in a writing which expressly includes a waiver, shall be or be deemed a
waiver of any Default or Event of Default disclosed therein; and provided,
further, that Borrower may update any Schedule hereto to the extent any
reference to any Schedule herein expressly permits such Schedule to be updated
from time to time, and any such updated Schedule shall be deemed to amend this
Agreement.
5.9 Employee Plans. Borrower shall notify Agent of (i) any and all
material claims, actions, or lawsuits asserted or instituted, and of any
threatened litigation or claims, against Borrower, any Subsidiary thereof, or
against any ERISA Affiliate in connection with any Plan maintained, at any time,
by Borrower, such Subsidiary or such ERISA Affiliate, or to which Borrower, such
Subsidiary or such ERISA Affiliate has or had at any time any obligation to
contribute, or/and against any such Plan itself, or against any fiduciary of or
service provider to any such Plan and (ii) the occurrence of any material
"Reportable Event" with respect to any Pension Plan of Borrower, such Subsidiary
or such ERISA Affiliate.
5.10 Environmental Matters. Borrower shall, and shall cause each of
its Subsidiaries to, (i) comply in all material respects with the Environmental
Laws applicable to it, (ii) notify Agent promptly after Borrower or such
Subsidiary becomes aware of any Release upon or at any premises owned or
occupied by it, and (iii) promptly forward to Agent a copy of any material
order, notice or report received by Borrower or such Subsidiary in connection
with any such material Release or any other material matter relating to the
Environmental Laws that may affect such premises or Borrower or such Subsidiary.
The provisions of this Section 5.10 shall apply whether or not the Environmental
Protection Agency, any other federal agency or any state, local or foreign
-24-
environmental agency has taken or threatened any action in connection with any
Release or the presence of any Hazardous Materials.
5.11 Landlords' Agreements, Bailee Letters and Mortgagee Agreements.
Borrower shall use its best efforts to obtain a landlord's agreement in form and
substance acceptable to Agent from the lessor of each leased property currently
being used by Borrower or any Subsidiary (other than LaserMaster Europe) thereof
where Collateral is located. Borrower shall use its best efforts to obtain a
bailee letter in form and substance acceptable to Agent and with respect to any
warehouse where Collateral is located. Borrower shall use its best efforts to
obtain a mortgagee's agreement in form and substance satisfactory to Agent from
the mortgagee of each property owned by Borrower or any Subsidiary (other than
LaserMaster Europe) thereof where Collateral is located. With respect to
locations or warehouse space leased or owned on the Closing Date, if Borrower is
unable to obtain a landlord or mortgagee agreement or bailee letter within
ninety (90) days after the Closing Date, Eligible Inventory at that location
shall be subject to a reserve equal to two (2) month's lease, warehousing or
mortgage payments for purposes of calculating Borrowing Availability. No real
property or warehouse space shall be leased or acquired by Borrower or any
Subsidiary (other than LaserMaster Europe) thereof after the Closing Date,
unless and until a landlord or mortgagee agreement or bailee letter, as
appropriate, shall first have been obtained with respect to such location.
5.12 Leased Locations of Collateral. Borrower shall timely perform its
obligations under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located. Borrower
shall promptly deliver to Agent copies of any and all default notices received
under or with respect to any such leased location or public warehouse.
6. NEGATIVE COVENANTS
Borrower covenants and agrees that, without the prior written consent
of Agent and the Requisite Lenders, from and after the date hereof until the
Termination Date:
6.1 Mergers, Subsidiaries, Etc. Borrower shall not, nor it shall cause
or permit any Subsidiary thereof to, directly or indirectly, by operation of law
or otherwise, (i) form or acquire any Subsidiary, provided that LaserMaster
Europe may form new Subsidiaries, or (ii) merge with, consolidate with, acquire
all or substantially all of the assets or capital stock of, or otherwise combine
with, any Person, provided that LaserMaster Europe may merge or consolidate with
or otherwise acquire the assets or capital stock of any Person with the prior
written consent of Agent (such consent not to be unreasonably withheld).
6.2 Investments; Loans and Advances. Except as otherwise permitted by
Section 6.3 or 6.4 below, Borrower shall not, nor shall it cause or permit any
Subsidiary (other than LaserMaster Europe) thereof to, make any investment in,
or make or accrue loans or advances of money to any Person, through the direct
or indirect lending of money, holding of securities or otherwise (collectively,
an "Investment") except for the following:
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(a) (i) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale of goods and services in the
ordinary course of business; (ii) shares of stock, obligations or other
securities received in settlement of claims arising in the ordinary course
of business; (iii) advances to contractors and suppliers in the ordinary
course of business (which the parties hereto agree do not include
capitalized expenditures) in an aggregate amount not to exceed at any time
outstanding (A) $350,000 plus (B) 100% of the amount of any cash proceeds
of sales of common stock and/or capital contributions received by Borrower
(net of any fees, costs and expenses incurred in connection with any such
sale or contribution, including, without limitation, underwriters'
discounts) from and after the Closing Date (but excluding any equity
proceeds (x) invested in or otherwise used to benefit LaserMaster Europe or
(y) used to repay the TimeMasters Debt pursuant to Section 5(d) of the
TimeMasters Subordination Agreement); (iv) prepaid expenses incurred in the
ordinary course of business; (v) Investments existing on the Closing Date
and described on Schedule 6.2 hereto; and (vi) advances made in the
ordinary course of business in connection with any purchases by Borrower
from its ink vendor;
(b) so long as (i) no Default or Event of Default has occurred and is
continuing, or would result therefrom, (ii) Excess Availability is equal to
or greater than $2,000,000 and (iii) the Average Payable Days is less than
60 days, (A) Investments in readily marketable direct obligations of the
United States of America having maturities of one year or less from the
date of acquisition; (B) certificates of deposit or bankers' acceptances,
each maturing within one year from the date of acquisition, issued by any
commercial bank organized under the laws of the United States or any State
thereof which has (x) combined capital, surplus and undivided profits of at
least $100,000,000 and (y) a credit rating with respect to its unsecured
indebtedness from a nationally recognized rating service that is
satisfactory to Agent; and (C) commercial paper maturing within 270 days
from the date of issuance and given the highest rating by a nationally
recognized rating service; and
(c) loans or Investments by Borrower in or to Asia/Pacific and/or
ColorMasters in an aggregate amount that does not exceed (A) $800,000 per
fiscal year plus (B) 50% of the Cumulative Net Income Investment Basket, if
positive, from and after January 1, 1996 plus (C) 100% of the amount of any
cash proceeds of sales of common stock and/or capital contributions
received by Borrower (net of any fees, costs and expenses incurred in
connection with any such sale or contribution, including, without
limitation, underwriters' discounts) from and after the Closing Date (but
excluding any equity proceeds (x) invested in or otherwise used to benefit
LaserMaster Europe or (y) used to repay the TimeMasters Debt pursuant to
Section 5(d) of the TimeMasters Subordination Agreement).
6.3 Indebtedness. Borrower shall not, nor shall it cause or permit
any Subsidiary (other than LaserMaster Europe) thereof to, create, incur, assume
or permit to exist any Indebtedness, except (i) Indebtedness of Borrower secured
by Liens permitted under Section 6.7,
-26-
(ii) the Revolving Credit Loan and the other Obligations, (iii) deferred taxes,
(iv) unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law, (v) existing Indebtedness set forth in Schedule 6.3 and refinancings
thereof on terms and conditions acceptable to Agent, in its reasonable
discretion, which shall in any event be on terms no less favorable to Borrower,
Agent or any Lender than the terms of the Indebtedness being refinanced and (vi)
intercompany Indebtedness permitted under Section 6.2
6.4 Employee Loans and Affiliate Transactions. (a) Borrower shall
not, nor shall it cause or permit any Subsidiary thereof to, enter into or be a
party to any transaction with an Affiliate of Borrower (including, without
limitation, sales and transfers of Inventory between Borrower and LaserMaster
Europe as described on Schedule 6.4(a) but subject to the financial covenant set
forth in clause (h) on Schedule H hereto) except in the ordinary course of and
pursuant to the reasonable requirements of Borrower's or its Subsidiary's
business and upon fair and reasonable terms that are fully disclosed to Agent in
advance and are no less favorable to Borrower or such Subsidiary than would be
obtained in a comparable arm's length transaction with a Person not an Affiliate
of Borrower. All such transactions existing as of the Closing Date are described
on Schedule 6.4(a).
(b) Borrower shall not, nor shall it cause or permit any Subsidiary
(other than LaserMaster Europe) thereof to, enter into any lending or borrowing
transaction with any of its employees, except that Borrower and its Subsidiaries
(other than LaserMaster Europe) may make loans to officers and employees in the
ordinary course of business, provided that the aggregate amount outstanding at
any time shall not exceed $50,000 for any single employee and $250,000 in the
aggregate for all employees.
6.5 Capital Structure and Business. Borrower shall not, nor shall it
cause or permit any Subsidiary thereof to, (i) make any changes in any of its
business objectives, purposes or operations which could in any way adversely
affect the repayment of the Revolving Credit Loan or any of the other
Obligations or could have or result in a Material Adverse Effect, (ii) make any
change in its capital structure as described on Schedule 3.10 (including the
issuance of any shares of Stock, warrants or other securities convertible into
Stock or any revision of the terms of its outstanding Stock), except in
connection with a transaction permitted by Section 6.1, or (iii) amend its
certificate or articles of incorporation or bylaws in a manner which would
adversely affect the Lenders or its duty or ability to repay the Obligations.
Neither Borrower nor any Subsidiary thereof shall engage in any business other
than the businesses currently engaged in by Borrower or such Subsidiary or
businesses reasonably related thereto.
6.6 Guaranteed Indebtedness. Borrower shall not, nor shall it cause
or permit any Subsidiary thereof to, incur any Guaranteed Indebtedness except
(i) by endorsement of instruments or items of payment for deposit to the general
account of Borrower, (ii) for Guaranteed Indebtedness incurred for the benefit
of Borrower or any Subsidiary thereof if the primary obligation is expressly
permitted by this Agreement and (iii) existing Guaranteed Indebtedness set forth
on Schedule 6.6 hereto.
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6.7 Liens. Borrower shall not, nor shall it cause or permit any
Subsidiary (other than LaserMaster Europe) thereof to, create, incur, assume or
permit to exist any Lien on or with respect to any of its properties or assets
(including Accounts, instruments, or chattel paper) of Borrower or any of its
Subsidiaries (other than LaserMaster Europe), whether now owned or hereafter
acquired except for the following (collectively, "Permitted Liens") (i)
Permitted Encumbrances, (ii) presently existing or hereinafter created Liens in
favor of Agent, on behalf of Lenders, (iii) Liens created after the date hereof
by conditional sale or other title retention agreements (including, without
limitation, Capital Leases) or in connection with purchase money indebtedness
with respect to properties acquired by Borrower and such Subsidiaries in the
ordinary course of business, involving the incurrence of an aggregate amount of
purchase money indebtedness and Capital Lease Obligations of not more than
$3,500,000 (provided that the aggregate amount incurred by Asia/Pacific shall
not exceed $300,000 at any time) outstanding at any one time (including those
outstanding as of the Closing Date) for all such Liens (provided that such Liens
attach only to the assets subject to such purchase money debt and such
Indebtedness is incurred within one hundred twenty (120) days following such
purchase and does not exceed 100% of the purchase price of the subject assets),
(iv) Liens existing on the date hereof and described on Schedule 6.7 and (v)
subject to the terms and conditions of the TimeMasters Subordination Agreement,
Liens only with respect to all or any portion of the Collateral which are
subordinate to the Liens created under the Loan Documents securing the
Obligations, created after the date hereof solely to secure the TimeMasters
Debt.
In addition, Borrower shall not, nor shall it cause or permit any
Subsidiary thereof to, become a party to any agreement, note, indenture or
instrument, or take any other action, which would prohibit the creation of a
Lien on any of its properties or other assets in favor of Agent, on behalf of
itself and Lenders, as additional collateral for the Obligations, except
operating leases, Capital Leases or intellectual property licenses which
prohibit liens upon the assets that are subject thereto.
6.8 Sale of Assets. Borrower shall not, nor shall it cause or permit
any Subsidiary (other than LaserMaster Europe) thereof to, sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the capital stock of any such Subsidiary (other than LaserMaster
Europe) or Borrower or any of their Accounts, other than (i) the sale of
Inventory in the ordinary course of business, (ii) the sale, transfer,
conveyance or other disposition of assets (other than any Collateral) having a
value not exceeding $500,000 in the aggregate in any Fiscal Year, (iii) the
sale, transfer, conveyance or other disposition of obsolete or redundant assets,
(iv) the sale, transfer, conveyance or other disposition of any Intellectual
Property at any time prior to such Intellectual Property being released, if at
all, by the Agent pursuant to Section 11.16 having a value not exceeding
$300,000 in the aggregate in any Fiscal Year so long as (A) no default or Event
of Default has occurred and is continuing, (B) each such sale, transfer,
conveyance or other disposition shall be subject to an irrevocable (while the
Obligations remain outstanding and this Agreement has not been terminated),
royalty-free license or sublicense, in each case subject to any existing royalty
payable to the existing licensor, executed by the purchaser thereof in favor of
Agent and Lenders, in form and substance satisfactory to Agent, (C) such sale,
transfer, conveyance or other disposition is for consideration consisting solely
of cash and such consideration received is at least equal to the
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fair market value of such assets as determined by the board of directors of
Borrower and (D) such sale, transfer, conveyance or other disposition is to a
Person which is not, directly or indirectly, an Affiliate of Borrower or an
employee, officer or director of Borrower or any of its Affiliates and (v) the
sale, transfer, conveyance or other disposition of any Intellectual Property at
any time after such Intellectual Property being released, if at all, by the
Agent pursuant to Section 11.16 so long as (A) no Default or Event of Default
has occurred and is continuing, (B) each such sale, transfer, conveyance or
other disposition shall be subject to an irrevocable (while the Obligations
remain outstanding and this Agreement has not been terminated), royalty-free
license or sublicense, in each case subject to any existing royalty payable to
the existing licensor, executed by the purchaser thereof in favor of Agent and
Lenders, in form and substance satisfactory to Agent, (C) such consideration
received is at least equal to the fair market value of such assets as determined
by the board of directors of Borrower and (D) such sale, transfer, conveyance or
other disposition is to a Person which is not, directly or indirectly, an
Affiliate of Borrower or an employee, officer or director of Borrower or any of
its Affiliates. With respect to any disposition of assets or other properties
permitted pursuant to this Section 6.8, Agent agrees on reasonable prior written
notice to release its Lien on such assets or other properties in order to permit
Borrower to effect such disposition and shall execute and deliver to Borrower,
at Borrower's expense, appropriate UCC-3 termination statements and other
releases as reasonably requested by Borrower.
6.9 ERISA. Borrower shall not, nor shall it cause or permit any
Subsidiary or ERISA Affiliate thereof (without Agent's prior written consent)
to, (i) acquire any ERISA Affiliate that maintains or has an obligation to
contribute to a Pension Plan that has either an "accumulated funding
deficiency", as defined in Section 302 of ERISA, or any "unfunded vested
benefits", as defined in Section 4006(a)(3)(e)(iii) of ERISA, in the case of any
plan other than a Multiemployer Plan, and in Section 4211 of ERISA in the case
of a Multiemployer Plan, in excess of $100,000, (ii) permit or suffer any
representation set forth in Schedule 3.14 to cease to be met and satisfied at
any time, (iii) terminate any Pension Plan that is subject to Title IV of ERISA
where such termination could reasonably be anticipated to result in liability in
excess of $100,000 to such Person, (iv) permit any accumulated funding
deficiency, as defined in Section 302(a)(2) of ERISA, to be incurred with
respect to any Pension Plan, in excess of $100,000, (v) fail to make any
material contributions or fail to pay any amounts due and owing as required by
the terms of any Plan before such contributions or amounts become delinquent,
(vi) make a complete or partial withdrawal (within the meaning of Section 4201
of ERISA) from any Multiemployer Plan, or (vii) fail to promptly provide Agent
with copies of any Plan documents or governmental reports or filings, if
requested by Agent.
6.10 Financial Covenants. Borrower shall not breach or fail to
comply with any of the Financial Covenants (the "Financial Covenants") set forth
in Schedule H.
6.11 Hazardous Materials. No Borrower shall, nor shall it cause or
permit any Subsidiary thereof or any other Person within its control to, cause
or permit a material Release or the presence, use, generation, manufacture,
installation, Release, discharge, storage or disposal of any Hazardous Materials
on, under, in, above or about any of its real estate or the transportation of
any Hazardous Materials to or from any real estate where such Release or such
presence, use,
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generation, manufacture, installation, Release, discharge, storage or disposal
would violate in any material respect, or form the basis for any material
liability under, any Environmental Laws.
6.12 Sale-Leasebacks. Borrower shall not, nor shall it cause or
permit any Subsidiary (other than LaserMaster Europe) thereof to, engage in any
sale-leaseback or similar transaction involving any of its assets.
6.13 Cancellation of Indebtedness. Borrower shall not, nor shall it
cause or permit any Subsidiary thereof to, cancel any claim or debt owing to it,
except for reasonable consideration negotiated on an arm's-length basis and in
the ordinary course of its business consistent with past practices.
6.14 Restricted Payments. Borrower shall not, nor shall it cause or
permit any Subsidiary thereof to, make any Restricted Payment, other than (i)
payments necessary to enable Holdings to satisfy its Federal, state and local
income tax obligations to the extent such obligations are the result of the net
consolidated income of Borrower and its Subsidiaries being attributed to
Holdings for tax purposes which are directly related to the operations of
Borrower and its Subsidiaries, (ii) payments to Holdings to pay for the actual
incurrence by Holdings of necessary legal, accounting and other fees and
expenses which are related to the operations of Borrower and its Subsidiaries
and (iii) payments to Holdings in an aggregate amount that do not exceed 50% of
the Cumulative Net Income Capex/Restricted Payment Basket, if positive, from and
after January 1, 1996; provided, however, that in no event shall the aggregate
amount of all payments made under clause (ii) above exceed $500,000 in any
month.
6.15 Leases. (a) Borrower shall not, nor shall it cause or permit
any Subsidiary (other than LaserMaster Europe) thereof to, enter into any lease
of real property or similar agreement or arrangement except (i) those certain
leases set forth on Schedule 6.15 hereto, including any renewals or replacements
thereof on terms which are not materially different from such leases, and (ii)
leases for additional space entered into in the ordinary course of business.
(b) Borrower shall not nor shall it permit any Subsidiary to enter
into or be a party to any operating lease for equipment or personal property if
the aggregate of all such operating lease payments payable in any Fiscal Year
for Borrower and its Subsidiaries would exceed $2,500,000.
6.16 Fiscal Year. Borrower shall not, nor shall it cause or permit
any Subsidiary thereof to, change its Fiscal Year.
6.17 Change of Corporate Name or Location. (a) Borrower shall not,
nor shall it cause or permit any Subsidiary (other than LaserMaster Europe)
thereof to, (i) change its corporate name or (ii) change its chief executive
office, principal place of business, corporate offices or warehouses or
Collateral locations, or the location of its records concerning the Collateral,
in any case without at least thirty (30) days' prior written notice to Agent and
after Agent's written acknowledgment that any reasonable action requested by
Agent in connection therewith, including, without limitation, to continue the
perfection of any Liens in favor of Agent, on behalf of Lenders,
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in any Collateral has been completed or taken and provided that any such new
location shall be in the continental United States; (b) in furtherance of and
without limiting the scope of clause (a) above, Borrower shall not, nor shall it
permit any of its Subsidiaries (other than LaserMaster Europe), to change its
name, identity or corporate structure in any manner which might make any
financing or continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9.402(7) of the Code or any other then
applicable provision of the Code except upon prior written notice to Agent and
Lenders and after Agent's written acknowledgment that any reasonable action
requested by Agent in connection therewith, including, without limitation, to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral has been completed or taken.
6.18 Sale of Stock. Borrower shall not, nor shall it cause or permit
any Subsidiary thereof to, sell (whether in a public or private offering or
otherwise) any of its Stock, except with respect to any issuances of any Stock
by LaserMaster Europe or any of its Subsidiaries in connection with a
transaction permitted by Section 6.1.
6.19 Cash Management. Borrower shall not, nor shall it cause or
permit any Subsidiary (other than LaserMaster Europe) thereof to, accumulate or
maintain cash in disbursement or payroll accounts as of any date of
determination in excess of checks outstanding against such accounts as of that
date and amounts necessary to meet minimum balance requirements other than
accounts at ColorMasters with deposits which do not exceed $25,000 in the
aggregate at any time.
6.20 No Impairment of Upstreaming. Borrower shall not, nor shall it
cause or permit any Subsidiary thereof to, directly or indirectly, enter into or
become bound by any agreement, instrument, indenture or other obligation (other
than this Agreement and the other Loan Documents) which could directly or
indirectly restrict, prohibit or require the consent of any Person with respect
to the payment of dividends or distributions or the making of intercompany loans
by a Subsidiary of Borrower to Borrower.
6.21 Changes Relating to Subordinated Debt. Borrower shall not, nor
shall it cause or permit any Subsidiary thereof to do any of the following:
(A) change or amend the terms of any Subordinated Debt (or any
indenture or agreement in connection therewith); or
(B) prepay, defease or purchase any of the Subordinated Debt;
provided, however, that the TimeMasters Debt may be paid at any time in
accordance with the terms and conditions of the TimeMasters Debt Documents
and the TimeMasters Subordination Agreement.
6.22 LaserMaster Export Corporation. Borrower shall not cause or
permit LaserMaster Export Corporation, a Virgin Island corporation and a wholly-
owned Subsidiary of Borrower, to own any assets or to conduct any business other
than operations solely as a foreign sales corporation.
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6.23 Asia/Pacific. Borrower shall not cause or permit Asia/Pacific
to incur obligations (whether contingent or otherwise) or any Indebtedness other
than (a) obligations owing to Borrower, (b) obligations arising solely by
operation of law, (c) Indebtedness permitted under Sections 6.7(iii) and 6.3(i),
and (d) obligations under any lease of real property which do not exceed
$200,000 in calendar years 1996 or 1997 or $300,000 in calendar year 1998.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby
shall be in effect until the Commitment Termination Date, and the Revolving
Credit Loan and all other Obligations shall be automatically due and payable in
full on such date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of Borrower or the rights of Agent and
Lenders relating to any unpaid portion of the Revolving Credit Loan or any other
Obligation, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon Borrower, and all rights of Agent and each
Lender, all as contained in the Loan Documents shall not terminate or expire,
but rather shall survive such termination or cancellation and shall continue in
full force and effect until such time as all of the Obligations have been paid
in full in accordance with the terms of the agreements creating such
Obligations.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Borrower shall fail to make any payment of (i) principal of the
Revolving Credit Loan when due and payable or declared due and payable or (ii)
interest on, or any other amount owing in respect of, the Revolving Credit Loan
or any other Obligation (other than as set forth in Clause (b) below) within
three (3) days after such amount is due and payable or declared due and payable.
(b) Borrower shall fail to pay any Fees, costs or expenses payable or
reimbursable by Borrower under this Agreement or under any other Loan Document,
and such failure shall have remained unremedied for a period of 5 days or more
after Borrower has received written notice of such failure from Agent or any
Lender.
(c) Borrower shall fail or neglect to perform, keep or observe any of
the provisions of (i) Sections 1.8, 5.5 or 6, or any of the provisions set forth
in Schedules D or H,
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respectively; or (ii) Section 4 or any provisions set forth in Schedules F or G,
respectively, within twenty (20) days after written notice from Agent.
(d) Borrower shall fail or neglect to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents (other
than any provision embodied in or covered by any other clause of this Section
8.1) and the same shall remain unremedied for 30 days or more after Borrower has
received written notice of any such failure from Agent or any Lender.
(e) Holdings shall fail or neglect to perform, keep or observe any
provision of the Holdings Guaranty, and the same shall remain unremedied for 30
days or more after Holdings shall have received written notice of any such
failure from Agent or any Lender.
(f) A default or breach shall occur under any other agreement,
document or instrument to which Holdings, Borrower or any Subsidiary of Borrower
is a party and such default is not cured within any applicable grace period and
such default or breach (i) involves the failure to make any payment when due in
respect of any Indebtedness (other than the Obligations) of Holdings, Borrower
or any Subsidiary of Borrower in excess of $200,000 in the aggregate, or (ii)
causes such Indebtedness or a portion thereof in excess of $200,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or (iii) entitles any holder of such Indebtedness or
a trustee to cause such Indebtedness or a portion thereof in excess of $200,000
in the aggregate to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment, regardless of whether such right is
exercised or waived by such holder or trustee.
(g) Any representation or warranty herein or in any Loan Document or
in any written statement, report, financial statement or certificate made or
delivered to any Lender by Borrower shall be untrue or incorrect in any material
respect, as of the date when made or deemed made.
(h) Any representation or warranty in the Holdings Guaranty or in any
written statement pursuant thereto, or in any report, financial statement or
certificate made or delivered to any Lender by Holdings shall be untrue or
incorrect in any material respect, as of the date when made or deemed made.
(i) Assets of Holdings, Borrower or any Subsidiary of Borrower with a
fair market value of $200,000 or more shall be attached, seized, levied upon or
subjected to a writ or distress warrant, or come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors of
Holdings, Borrower or any Subsidiary of Borrower and shall such condition shall
continue for thirty (30) days or more.
(j) A case or proceeding shall have been commenced against Holdings,
Borrower or any Subsidiary of Borrower in a court having competent jurisdiction
seeking a decree or order in respect of Holdings, Borrower or any Subsidiary of
Borrower (i) under Title 11 of the United States Code, as now constituted or
hereafter amended or any other applicable federal, state or foreign
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bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for
Holdings, Borrower or any Subsidiary of Borrower or of any substantial part of
any such Person's assets, or (iii) ordering the winding-up or liquidation of the
affairs of Holdings, Borrower or any Subsidiary of Borrower and such case or
proceeding shall remain undismissed or unstayed for forty-five (45) days or more
or such court shall enter a decree or order granting the relief sought in such
case or proceeding.
(k) Holdings, Borrower or any Subsidiary of Borrower shall (i) file a
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable federal, State or
foreign bankruptcy or other similar law, (ii) consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) of Holdings, Borrower or
any Subsidiary of Borrower or of any substantial part of any such Person's
assets, (iii) make an assignment for the benefit of creditors, or (iv) take any
corporate action in furtherance of any such action.
(l) A final judgment or judgments for the payment of money in excess
of $200,000 in the aggregate shall be rendered against Holdings, Borrower or any
Subsidiary of Borrower and the same shall not (i) be fully covered by insurance,
or (ii) within the applicable statutory time for filing an appeal with respect
thereto, have been discharged or execution thereof stayed pending appeal, or
shall not have been discharged prior to the expiration of any such stay.
(m) With respect to any Plan: (i) which is a Defined Contribution Plan
or Welfare Plan, Borrower or any ERISA Affiliate thereof or any other party-in-
interest or disqualified Person shall engage in any transactions which in the
aggregate results in a final assessment to Borrower or any Subsidiary of
Borrower in excess of $100,000 under Section 409 or 502 of ERISA or IRC Section
4975 which assessment has not been paid within 30 days of final assessment and
which is not being contested pursuant to Sections 6.2(b) or (c) hereof; (ii)
Borrower or any ERISA Affiliate thereof shall incur any accumulated funding
deficiency, as defined in IRC Section 412, in the aggregate in excess of
$100,000, or request a funding waiver from the IRS for contributions in the
aggregate in excess of $100,000; (iii) Borrower or any ERISA Affiliate thereof
shall not pay any withdrawal liability which involves annual withdrawal
liability payments which exceed $100,000, as a result of a complete or partial
withdrawal within the meaning of Section 4203 or 4205 of ERISA, within 30 days
after the date such payment becomes due, unless such payment is being contested
pursuant to Sections 6.2(b) or (c) hereof; (iv) Borrower or any ERISA Affiliate
thereof shall fail to make a required contribution by the due date under Section
412 of the IRC or Section 302 of ERISA which would result in the imposition of a
lien under Section 412 of the IRC or Section 302 of ERISA within 30 days after
the date such payment becomes due; or (v) an ERISA Event (other than an event
described in 29 CFR (S)2615.23) with respect to a Plan has occurred, and within
thirty (30) days Borrower has not contested such ERISA Event by appropriate
proceedings.
(n) Any material provision of any Loan Document shall for any reason
(other than any actions taken by Agent) cease to be valid or enforceable in
accordance with its terms (or Holdings, Borrower or any Subsidiary thereof, or
any other Person party thereto, shall challenge the
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enforceability of any Loan Document), or any security interest created under any
Loan Document shall cease to be a valid and perfected first priority security
interest or Lien (except as otherwise permitted herein or therein) in any of the
Collateral purported to be covered thereby.
(o) Borrower shall cease to be a wholly-owned Subsidiary of Holdings.
(p) Any "Change of Control" shall occur.
8.2 Remedies. If any Default or Event of Default shall have occurred
and be continuing, Agent may (and at the written request of the Requisite
Lenders shall), with notice to Borrower, terminate this facility with respect to
further Revolving Credit Advances, whereupon any further Revolving Credit
Advances shall be made in Agent's sole discretion. If any Event of Default
shall have occurred and be continuing, Agent may (and at the written request of
the Requisite Lenders shall), with notice to Borrower, (a) declare all or any
portion of the Obligations, including all or any portion of the Revolving Credit
Loan, to be forthwith due and payable, all without presentment, demand, protest
or further notice of any kind, all of which are expressly waived by Borrower;
(b) increase the rate of interest applicable to the Revolving Credit Loan to the
Default Rate, as provided in Section 1.4(d); and (c) exercise any rights and
remedies provided to Agent under the Loan Documents and/or at law or equity,
including all remedies provided under the Code; provided, however, that upon the
occurrence of an Event of Default specified in Sections 8.1 (j) or (k), all of
the Obligations, including the Revolving Credit Loan, shall become immediately
due and payable without declaration, notice or demand by any Person.
8.3 Waivers by Borrower. Except as otherwise provided for in this
Agreement or by applicable law, Borrower waives: (i) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Agent on which Borrower may in any way be liable, and hereby
ratifies and confirms whatever Agent may do in this regard, (ii) all rights to
notice and a hearing prior to Agent's taking possession or control of, or to
Agent's replevy, attachment or levy upon, the Collateral or any bond or security
which might be required by any court prior to allowing Agent to exercise any of
its remedies, and (iii) the benefit of all valuation, appraisal and exemption
laws. Borrower acknowledges that it has been advised by counsel of its choice
with respect to this Agreement, the other Loan Documents and the transactions
evidenced by this Agreement and the other Loan Documents.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations. (a) Borrower hereby consents to
any Lender's sale of participations, and to any Lender's assignment, at any time
or times, of any of the Loan Documents, any Commitment or of any portion thereof
or interest therein, including, without limitation, any Lender's rights, title,
interests, remedies, powers or duties thereunder, whether evidenced by a writing
or not; provided, however, that any assignment by a Lender of all or any part
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of its Commitment shall (i) require the consent of Agent and the execution of a
Lender Addition Agreement in form and substance satisfactory to Agent; (ii) be
conditioned on such assignee Lender representing to the assigning Lender and the
Agent that it is purchasing the Revolving Credit Loans to be assigned to it for
its own account, for investment purposes and not with a view to the distribution
thereof; (iii) if a partial assignment, be in an amount at least equal to
$2,500,000 and, after giving effect to any such partial assignment, the
assigning Lender shall have retained Commitments in an amount at least equal to
$2,500,000; and (iv) include a payment by the assigning Lender to the Agent of
an assignment fee of $3,000; and, provided, further, that any participation by a
Lender of all or any part of its Commitments shall be in an amount at least
equal to $2,500,000, and with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount,
interest rate or fees payable hereunder in which such holder participates, (ii)
any extension of the final scheduled maturity date of the principal amount of
the Revolving Credit Loan in which such holder participates, and (iii) any
release of all or substantially all of the Collateral (other than in accordance
with the terms of this Agreement, the Collateral Documents or the other Loan
Documents). Borrower hereby acknowledges and agrees that any participation will
give rise to a direct obligation of Borrower to the participant and the
participant shall for purposes of Sections 1.14, 1.15 and 9.8 be considered to
be a "Lender".
(b) In the case of an assignment by a Lender under this Section 9.1,
the assignee shall have, to the extent of such assignment, the same rights,
benefits and obligations as it would if it were a Lender hereunder. The
assigning Lender shall be relieved of its obligations hereunder with respect to
its Commitments or assigned portion thereof. Borrower hereby acknowledges and
agrees that any assignment will give rise to a direct obligation of Borrower to
the assignee and that the assignee shall be considered to be a "Lender". In all
instances, each Lender's liability to make Loans hereunder shall be several and
not joint and shall be limited to such Lender's Pro Rata Share.
(c) Except as otherwise provided in this Section 9.1, no Lender shall,
as between Borrower and that Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or negotiation of, or
granting of participation in, all or any part of the Loans, the Notes or other
Obligations owed to such Lender.
(d) Borrower shall assist any Lender permitted to sell assignments or
participations under this Section 9.1 as reasonably required to enable the
assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be requested and the preparation of
informational materials for, and the participation of management in meetings
with, potential assignees or participants.
(e) A Lender may furnish any information concerning Borrower in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided, however, that any
potential assignee or participant shall, before being provided with any
confidential information with respect to Borrower, agree to maintain the
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confidentiality of confidential information of Borrower by executing a
confidentiality agreement substantially in the form of the confidentiality
agreement executed by Borrower and GE Capital, or such other form as shall be
reasonably acceptable to such prospective assignee or participant and Borrower.
In the event Agent or any Lender assigns or otherwise transfers all or any part
of a Note, Agent or any such Lender shall so notify Borrower and Borrower shall,
upon the request of Agent or such Lender, execute new Notes in exchange for the
Notes being assigned.
9.2 Appointment of Agent. GE Capital is hereby appointed Agent to
act on behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and Lenders and neither Borrower nor any Subsidiary thereof nor any other
Person shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and the other Loan Documents, Agent shall act solely as an agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower, any Subsidiary thereof or
any other Person. Agent shall have no duties or responsibilities except for
those expressly set forth in this Agreement and the other Loan Documents. The
duties of Agent shall be mechanical and administrative in nature and Agent shall
not have, or be deemed to have, by reason of this Agreement, any other Loan
Document or otherwise a fiduciary relationship in respect of any Lender.
Neither Agent nor any of its officers, directors, employees, agents or
representatives shall be liable to any Lender for any action taken or omitted to
be taken by it hereunder or under any other Loan Document, or in connection
herewith or therewith, except for damages caused by its or their own gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction after all possible appeals have been exhausted.
If Agent shall request instructions from Requisite Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Loan Document, then Agent shall be entitled to refrain
from such act or taking such action unless and until Agent shall have received
instructions from Requisite Lenders, and Agent shall not incur liability to any
Person by reason of so refraining. Agent shall be fully justified in failing or
refusing to take any action hereunder or under any other Loan Document (a) if
such action would, in the opinion of Agent, be contrary to law or the terms of
this Agreement or any other Loan Document or (b) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with this Agreement or the other
Loan Documents, except for its or their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction after all
possible appeals have been exhausted. Without limitation of the generality of
the foregoing, Agent: (i) may treat the payee of any Revolving Credit Note as
the holder thereof until Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory
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to Agent; (ii) may consult with legal counsel, independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with this Agreement or
the other Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of Borrower
or to inspect the Collateral (including the books and records) of Borrower; (v)
shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (vi) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4 GE Capital and Affiliates. With respect to its commitment
hereunder to make Revolving Credit Advances, GE Capital shall have the same
rights and powers under this Agreement and the other Loan Documents as any other
Lender and may exercise the same as though it were not Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include GE
Capital in its individual capacity. GE Capital and its Affiliates may lend
money to, invest in, and generally engage in any kind of business with,
Borrower, any of its Subsidiaries and Affiliates and any Person who may do
business with or own securities of Borrower or any such Subsidiary or Affiliate,
all as if GE Capital were not Agent and without any duty to account therefor to
Lenders. GE Capital and its Affiliates may accept fees and other consideration
from Borrower and any of its Subsidiaries for services in connection with the
Agreement or otherwise without having to account for the same to Lenders.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the financial statements referred to in Section 3.4 and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of Borrower and its Subsidiaries and its own decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon 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 decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of the Lenders holding disproportionate interests in the Loans, and
expressly consents to, and waives any claim based upon, such conflict of
interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the extent
not reimbursed by Borrower and without limiting the Obligations of Borrower
hereunder), ratably according to their respective Pro Rata Shares, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or
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omitted by Agent in connection therewith; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or wilful misconduct as finally
determined by a court of competent jurisdiction after all possible appeals have
been exhausted. Without limiting the foregoing, each Lender agrees to reimburse
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Loan Document, to the extent that Agent is not reimbursed for such
expenses by Borrower.
9.7 Successor Agent. Agent may resign at any time by giving not less
than thirty (30) days' prior written notice thereof to Lenders and Borrower.
Upon any such resignation, the Requisite Lenders shall have the right to appoint
a successor Agent which shall be reasonably acceptable to Borrower. If no
successor Agent shall have been so appointed by the Requisite Lenders and shall
have accepted such appointment, within 30 days after the resigning Agent's
giving notice of resignation then the resigning Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a Lender, if a Lender is
willing to accept such appointment, or otherwise shall be a commercial bank or
financial institution organized under the laws of the United States of America
or of any State thereof having a combined capital and surplus of at least
$300,000,000, which is reasonably acceptable to Borrower. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent, and the resigning Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning Agent shall continue. After any resigning Agent's resignation
hereunder as Agent, the provisions of this Section 9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Note is hereby authorized at any time or from
time to time, without notice to Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all balances held by it at any of its offices for the account of Borrower
(regardless of whether such balances are then due to Borrower) and any other
properties or assets any time held or owing by that Lender or that holder to or
for the credit or for the account of Borrower against and on account of any of
the Obligations which are not paid when due. Any Lender or holder of any Note
having a right to set off shall, to the extent the amount of any such set off
exceeds its Pro Rata Share of the Obligations, purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share such excess with each other Lender or holder in accordance
with their respective Pro Rata Shares. Borrower agrees, to the fullest extent
permitted by law, that (a) any Lender or holder may exercise its right to set
off with respect to amounts in excess of its Pro
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Rata Share of the Obligations and may sell participations in such excess to
other Lenders and holders and (b) any Lender or holders so purchasing a
participation in the Revolving Credit Advances made or other Obligations held by
other Lenders or holders may exercise all rights of set-off, bankers' lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender or holder were a direct holder of Revolving Credit Advances and
other Obligations in the amount of such participation.
9.9 Disbursement of Funds. Agent may, on behalf of Lenders, disburse
funds to Borrower for Revolving Credit Advances requested. Each Lender shall
reimburse Agent on demand for all funds disbursed on its behalf by Agent, or if
Agent so requests, each Lender will remit to Agent its Pro Rata Share of any
Revolving Credit Advance before Agent disburses same to Borrower. If any Lender
fails to pay the amount of its Pro Rata Share forthwith upon Agent's demand,
Agent shall promptly notify Borrower and Borrower shall immediately repay such
amount to Agent. Nothing in this Section 9.9 or elsewhere in this Agreement or
the other Loan Documents shall be deemed to require Agent to advance funds on
behalf of any Lender or to relieve any Lender from its obligation to fulfill its
Revolving Credit Loan Commitment hereunder or to prejudice any rights that
Borrower may have against any Lender as a result of any default by such Lender
hereunder.
9.10 Advances; Payments; Information; Non-Funding Lenders.
(a) Revolving Credit Advances; Payments; Fee Payments.
(i) The Revolving Credit Loan balance may fluctuate from day to
day through Agent's disbursement of funds to, and receipt of funds from,
Borrower. In order to minimize the frequency of transfers of funds between Agent
and each Lender, Revolving Credit Advances and payments in respect thereof will
be settled according to the procedures described in Sections 9.10(a)(ii) and
9.10(a)(iii) below. Notwithstanding these procedures, each Lender's obligation
to fund its portion of any advances made by Agent to Borrower will commence on
the date such advances are made by Agent. Such payments will be made by each
Lender without setoff, counterclaim or reduction of any kind.
(ii) Not later than 11:00 a.m. (Chicago time) on the second
(2nd) Business Day of each week, or more frequently (including daily) if Agent
so elects (each such day being a "Settlement Date"), Agent will advise each
Lender by telephone, telex or telecopy of the amount of such Lender's Pro Rata
Share of the Revolving Credit Loan balance as of the close of business on the
first (1st) Business Day immediately preceding the Settlement Date. In the event
that payments are necessary to adjust the amount of such Lender's portion of the
Revolving Credit Loan to such Lender's Pro Rata Share of the Revolving Credit
Loan as of any Settlement Date, the party from which such payment is due will
pay the other, in same day funds, by wire transfer to the other's account not
later than 2:00 p.m. (Chicago time) on the Settlement Date. Notwithstanding the
foregoing, if Agent so elects, Agent may require that each Lender make its Pro
Rata Share of any requested Revolving Credit Advance available to Agent for
disbursement prior to the funding of such Revolving Credit Advance. If Agent
elects to require that such funds be so made available,
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Agent shall advise each Lender by telephone, telex or telecopy of the amount of
such Lender's Pro Rata Share of the requested Revolving Credit Advance no later
than 11:00 a.m. (Chicago time) on the date of funding thereof, and each such
Lender shall pay Agent such Lender's Pro Rata Share of such requested Revolving
Credit Advance, in same day funds, by wire transfer to the Agent's account not
later than 2:00 p.m. (Chicago time) on the date of funding such Revolving Credit
Advance.
(iii) For purposes of this Section 9.10(a)(iii), the following
terms and conditions will have the following meanings:
(A) "Daily Loan Balance" means, with respect to the Revolving
Credit Loan, an amount calculated as of the end of each
calendar day by subtracting (i) the cumulative principal
amount paid by Agent to a Lender with respect to such Loan
from the Closing Date through and including such calendar
day, from (ii) the cumulative principal amount of such
Loan advanced by such Lender to Agent from the Closing
Date through and including such calendar day.
(B) "Daily Interest Rate" means, with respect to the Revolving
Credit Loan, an amount calculated by dividing the interest
rate payable to a Lender on such Loan (as set forth in
Section 1.5) as of each calendar day by three hundred
sixty (360) days.
(C) "Daily Interest Amount" means, with respect to the
Revolving Credit Loan, an amount calculated by multiplying
the Daily Loan Balance of such Loan by the associated
Daily Interest Rate applicable to such Loan.
(D) "Interest Ratio" means, with respect to the Revolving
Credit Loan, a number calculated by dividing the total
amount of interest on such Loan received by Agent during
the immediately preceding month by the total amount of
interest on such Loan due from Borrower during the
immediately preceding month.
On the first (1st) Business Day of each calendar month (an "Interest Settlement
Date"), Agent will advise each Lender by telephone, telex or telecopy of the
amount of such Lender's Pro Rata Share of principal, interest and Fees paid for
the benefit of Lenders on the Revolving Credit Loan as of the end of the last
day of the immediately preceding month. Provided that such Lender has made all
payments required to be made by it under this Agreement and the other Loan
Documents, Agent will pay to such Lender, by wire transfer to such Lender's
account (as specified by such Lender on the applicable Lender Addition
Agreement, as amended by such Lender from time to time after the date hereof
pursuant to the notice provisions contained herein or in the applicable Lender
Addition Agreement) not later than 12:00 noon (Chicago time) on the next
Business Day following the Interest Settlement Date, such Lender's Pro Rata
Share of principal, interest and Fees paid for the
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benefit of Lenders on the Revolving Credit Loan. Such Lender's Pro Rata Share
of interest on the Revolving Credit Loan will be calculated by adding together
the Daily Interest Amounts for each calendar day of the prior month for such
Loan and multiplying the total thereof by the Interest Ratio for such Loan.
(b) Availability of Lender's Pro Rata Share.
(i) Agent may assume that each Lender will make its Pro Rata Share of
each Revolving Credit Advance available to Agent on the first (1st) Business Day
following each Settlement Date. If such Pro Rata Share is not, in fact, paid to
Agent by such Lender when due, Agent will be entitled to recover such amount on
demand from such Lender without set-off, counterclaim or deduction of any kind.
(ii) Nothing contained in this Section 9.10(b) will be deemed to
relieve any Lender of its obligation to fulfill its Commitments or to prejudice
any rights Agent or Borrower may have against any Lender as a result of any
default by such Lender under this Agreement.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by
Agent from Borrower and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
set-off, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by Agent
under this Agreement must be returned to Borrower or paid to any other Person
pursuant to any insolvency law or otherwise, then, notwithstanding any other
term or condition of this Agreement or any other Loan Document, Agent will not
be required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.
(d) Dissemination of Information.
Agent will use reasonable efforts to provide Lenders with any
information received by Agent from Borrower which is required to be provided to
Lenders hereunder, with any notice of Default or Event of Default received by
Agent from Borrower, with any notice of Default or Event of Default delivered by
Agent to Borrower, with notice of any Default or Event of Default of which Agent
has actually become aware and with notice of any action taken by Agent following
any Default or Event of Default; provided, however, that Agent shall not be
liable to any Lender for any failure to do so, except to the extent that such
failure is attributable to Agent's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction after all possible
appeals have been exhausted.
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(e) Non-Funding Lenders. The failure of any Lender (such Lender, a
"Non-Funding Lender") to make any Revolving Credit Advance to be made by it on
the date specified therefor shall not relieve any other Lender (each such other
Lender, an "Other Lender") of its obligations to make its Revolving Credit
Advance on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make a Revolving Credit
Advance to be made by such Non-Funding Lender, and no Non-Funding Lender shall
have any obligation to Agent or any Other Lender for the failure by such Non-
Funding Lender. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender" (or be included in the
calculation of "Required Lenders" hereunder) for any voting or consent rights
under, or with respect to, any Loan Document. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including, without limitation, exercising any
rights of set-off) without first obtaining the prior written consent of Agent or
Required Lenders, it being the intent of Lenders that any such action to protect
or enforce rights under this Agreement and the Notes shall be taken in concert
and at the direction or with the consent of the Agent.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of Borrower, Agent,
Lenders and their respective successors and assigns, except as otherwise
provided herein or therein. Borrower may not assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Requisite Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by Borrower without the prior express written
consent of Agent shall be void. The terms and provisions of this Agreement are
for the purpose of defining the relative rights and obligations of Borrower,
Agent and Lenders with respect to the transactions contemplated hereby and there
shall be no third party beneficiaries of any of the terms and provisions of this
Agreement or any of the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2 below. Except for the confidentiality letter dated
November 22, 1995 between Borrower and GE Capital, any letter of interest or
commitment letter and/or fee letter between Borrower and Agent or any of its
affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2 Amendments and Waivers. (a) Except as otherwise provided
herein, no amendment, modification, termination or waiver of any provision of
this Agreement or any of the
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Notes or consent to any departure by Borrower or any of its Subsidiaries
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Agent, Requisite Lenders and Borrower.
(b) In furtherance of and without limiting the foregoing, no
amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement which (i) increases the percentage advance rates set
forth in the definition of Borrowing Base or (ii) makes less restrictive the
nondiscretionary criteria for exclusion from Eligible Accounts and Eligible
Inventory set forth in Schedule B and Schedule C hereto shall be effective
unless the same shall be in writing and signed by Agent, Requisite Lenders and
Borrower.
(c) Notwithstanding the foregoing, except to the extent permitted by
any applicable Lender Addition Agreement, no amendment, modification,
termination or waiver shall, unless in writing and signed by Agent and each
affected Lender, do any of the following: (a) increase the principal amount of
the Commitment of any affected Lender; (b) reduce the principal of, rate of
interest on or Fees payable with respect to any Revolving Credit Advance; (c)
extend the final scheduled maturity date of the principal amount of any Loan;
(d) waive, forgive, defer, extend or postpone any payment of interest or Fees
required hereunder; (e) release the Holdings Guaranty; (f) except as otherwise
contemplated herein or in one of the other Loan Documents, permit Borrower to
sell or otherwise dispose of any Collateral with a value exceeding $5,000,000 in
the aggregate; (g) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for Lenders or any
of them to take any action hereunder; and (h) amend or waive this Section 11.2
or the definitions of the terms used in this Section 11.2 insofar as the
definitions affect the substance of this Section 11.2; and provided, further,
that no amendment, modification, termination or waiver affecting the rights or
duties of Agent under this agreement or any other Loan Document shall in any
event be effective, unless in writing and signed by Agent, in addition to
Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or
waiver of any provision of any Note shall be effective without the written
concurrence of the holder of that Note. No notice to or demand on Borrower in
any case shall entitle Borrower to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 11.2 shall be binding
upon each holder of the Notes at the time outstanding and each future holder of
the Notes.
11.3 Fees and Expenses. Borrower shall reimburse Agent for all
reasonable out-of-pocket expenses incurred in connection with (a) the
preparation of the Loan Documents (including the reasonable fees and expenses of
all of its special loan counsel, advisors, consultants and auditors retained in
connection with the Loan Documents and the transactions contemplated thereby and
advice in connection therewith), and (b) wire transfers to the account of
Borrower. Borrower shall reimburse Agent (and, with respect to clauses (iii) and
(iv) below, each Lender) for all fees, costs and expenses, including the fees,
costs and expenses of counsel or other advisors
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(including environmental and management consultants) for advice, assistance, or
other representation in connection with:
(i) the forwarding to Borrower or any other Person on behalf of
Borrower by Agent of the proceeds of the Revolving Credit Advances;
(ii) any amendment, modification or waiver of, or consent with respect
to, any of the Loan Documents or advice in connection with the administration of
the loans made pursuant hereto or its rights hereunder or thereunder;
(iii) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, Borrower or any other Person) in any
way relating to the Collateral, any of the Loan Documents or any other agreement
to be executed or delivered in connection therewith or herewith, whether as
party, witness, or otherwise, including any litigation, contest, dispute, suit,
case, proceeding or action, and any appeal or review thereof, in connection with
a case commenced by or against Borrower or any other Person that may be
obligated to Agent by virtue of the Loan Documents;
(iv) any attempt to enforce any rights of Agent or any Lender against
Borrower or any other Person that may be obligated to Agent or any Lender by
virtue of any of the Loan Documents;
(v) efforts to (A) monitor the Loans or any of the other Obligations,
(B) evaluate, observe, assess Borrower, any Subsidiary thereof or their
respective affairs, and (C) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, without limitation, all the attorneys' and other professional and
service providers' fees arising from such services, including those in
connection with any appellate proceedings; and all expenses, costs, charges and
other fees incurred by such counsel and others in any way or respect arising in
connection with or relating to any of the events or actions described in this
Section 11.3 shall be payable, on demand, by Borrower to Agent. Without
limiting the generality of the foregoing, such expenses, costs, charges and fees
may include: fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other advisory services.
11.4 No Waiver. Agent's or any Lender's failure, at any time or
times, to require strict performance by Borrower of any provision of this
Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver of an Event of
Default under this Agreement or any of the other Loan Documents shall not
suspend, waive or affect any other Event of Default under this Agreement and any
of the other Loan Documents whether the
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same is prior or subsequent thereto and whether of the same or of a different
type. None of the undertakings, agreements, warranties, covenants and
representations of Borrower contained in this Agreement or any of the other Loan
Documents and no Default or Event of Default by Borrower under this Agreement
and no defaults by Borrower under any of the other Loan Documents shall be
deemed to have been suspended or waived by Agent or any Lender, unless such
waiver or suspension is by an instrument in writing signed by an officer of or
other authorized employee of Agent and Requisite Lenders and directed to
Borrower specifying such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
which Agent or any Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of the
other Loan Documents, the provision contained in this Agreement shall govern and
control.
11.8 Authorized Signature. Until Agent shall be notified by
Borrower to the contrary, the signature upon any document or instrument
delivered pursuant hereto of an officer of Borrower listed on Schedule 11.8
shall bind Borrower and be deemed to be the act of Borrower affixed pursuant to
and in accordance with resolutions duly adopted by Borrower's Board of
Directors.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF ILLINOIS (WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. BORROWER,
AGENT AND LENDERS HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS
LOCATED IN XXXX COUNTY, CITY OF CHICAGO, ILLINOIS, SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWERS,
AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
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AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT, LENDERS AND
BORROWER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT LOCATED OUTSIDE OF XXXX COUNTY, CITY OF CHICAGO, ILLINOIS AND, PROVIDED,
THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE
ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. BORROWER EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT.
11.10 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon either of the
parties by the other party, or whenever either of the parties desires to give or
serve upon the other party any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (i) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (ii) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10), (iii) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid or (iv) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated on Schedule I or to such other
address (or facsimile number) as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Failure or delay in delivering
copies of any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower or Agent) designated on
Schedule I to receive copies shall in no way adversely affect the effectiveness
of such notice, demand, request, consent, approval, declaration or other
communication.
11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.
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11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND BORROWER ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS RELATED THERETO.
11.14 Press Releases. Borrower hereby agrees that it is not on the
date hereof issuing any press releases with respect to this Agreement or the
Related Transactions which mentions or uses the name of General Electric Capital
Corporation or its affiliates. Borrower further agrees that it will not make in
the future any press releases using the name of General Electric Capital
Corporation or its affiliates referring to this Agreement without the prior
written consent of GE Capital unless Borrower is required to do so under law and
then, in any event, Borrower will consult with GE Capital before issuing such
press release.
11.15 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Borrower for liquidation or reorganization, should Borrower become insolvent or
make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of Borrower's
assets, and shall continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee of the Obligations, whether as
a "voidable preference," "fraudulent conveyance," or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
11.16 Release of Intellectual Property Lien. The Agent and the
Lenders agree to release their Lien created under the Loan Documents solely with
respect to the Intellectual Property of Borrower, ColorMasters and Asia/Pacific
if, and only if, the following terms and conditions have been satisfied: (i) no
Default or Event of Default has occurred and is continuing; (ii) Excess
Availability is equal to or greater than $2,000,000; (iii) the Average Payable
Days is less than 60 days; (iv) Holdings and its Subsidiaries shall have
positive net income, determined on a consolidated basis in accordance with GAAP,
for each of the immediately preceding two (2) Fiscal Quarters; (v) Holdings and
its Subsidiaries shall have cumulative positive net income, determined on a
consolidated basis in accordance with GAAP, or new cash equity in the form of
cash proceeds of
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sales of common stock and/or capital contributions received by Borrower (net of
any fees, costs and expenses incurred in connection with any such sale or
contribution, including, without limitation, underwriters' discounts) (but
excluding any such equity proceeds (x) which are invested in or otherwise used
to benefit LaserMaster Europe or (y) used to repay the TimeMasters Debt pursuant
to Section 5(d) of the TimeMasters Subordination Agreement), if any, of at least
$5,000,000 from and after January 1, 1996; (vi) prior to or contemporaneously
with such release, Borrower shall deliver a certificate of the Chief Executive
Officer of Borrower certifying, in form and substance satisfactory to Agent, as
to the satisfaction of all of the terms and conditions set forth in this Section
11.16; and (vii) prior to or contemporaneously with such release, Borrower shall
have caused TimeMasters to release all Liens and return all collateral securing
all or any portion of the TimeMasters Debt, after which time the TimeMasters
Debt shall no longer be secured by any property or assets. The capital stock of
Borrower shall not be pledged to secure any Indebtedness or other obligations.
Anything in this Section 11.16 to the contrary notwithstanding, Agent shall at
all times retain for the benefit of itself and Lenders the right to utilize such
Intellectual Property to the extent permitted in Section 9 of the applicable
Borrower Security Agreement or Subsidiary Security Agreements.
[signature page follows]
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IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the date first written above.
LASERMASTER CORPORATION
By: /s/ Xxxxxx Xxxxxxx
----------------------------------
Name: Xxx Xxxxxxx
---------------------------------
Title: CEO, LMC
--------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION,
Revolving Credit Loan as Agent and Lender
Commitment:
$10,000,000 By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
---------------------------------
Title: Duly Authorized Signatory
--------------------------------
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