EXHIBIT 10.1
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DEBTOR IN POSSESSION REVOLVING CREDIT AGREEMENT
AMONG
A.B. DICK COMPANY,
AS A DEBTOR IN POSSESSION AND LEAD BORROWER
AND
PARAGON CORPORATE HOLDINGS, INC.,
AS A DEBTOR IN POSSESSION AND BORROWER
AND
INTERACTIVE MEDIA GROUP, INC.,
AS A DEBTOR IN POSSESSION AND BORROWER
AND
KEYBANK NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT
AND
KEYBANK NATIONAL ASSOCIATION AND PRESSTEK, INC.
AS LENDERS
DATED AS OF JULY 13, 2004
$7,000,000
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DEBTOR IN POSSESSION REVOLVING CREDIT AGREEMENT, dated as of July
13, 2004, among A.B. DICK COMPANY, a Delaware corporation and a debtor in
possession (the "LEAD BORROWER"), PARAGON CORPORATE HOLDINGS, INC., a Delaware
corporation and debtor in possession ("Paragon"), INTERACTIVE MEDIA GROUP, INC.,
an Ohio corporation ("IMG"; Paragon and IMG, together with the Lead Borrower,
jointly and severally, the "BORROWERS"), KEYBANK NATIONAL ASSOCIATION
("KEYBANK") and PRESSTEK, INC. ("PRESSTEK"; and together with KeyBank a "LENDER"
and, KeyBank and Presstek being collectively referred to as the "Lenders") and
KEYBANK NATIONAL ASSOCIATION, as administrative agent (the "ADMINISTRATIVE
AGENT") for the Lenders. Unless otherwise defined herein, all capitalized terms
used herein and defined in Section 11 are used herein as so defined.
W I T N E S S E T H:
WHEREAS, on July 13, 2004 (the "FILING DATE"), the Borrowers
collectively, the "DEBTORS") filed a petition under Chapter 11 of the Bankruptcy
Code in the United States Bankruptcy Court for the District of Delaware; and
WHEREAS, the Debtors intend to continue to operate their respective
businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Code; and
WHEREAS, before the Filing Date, Paragon, parent of the Lead
Borrower, and KeyBank, successor by assignment to Key Corporate Capital Inc.
("KCCI"), as Agent, Bank and Letter of Credit Bank (KCCI, in such capacities,
being herein referred to as the "PREPETITION LENDER"), entered into that certain
Credit and Security Agreement dated as of April 1, 1998 (as amended and in
effect from time to time prior to the Filing Date, the "PREPETITION CREDIT
AGREEMENT"), pursuant to which the Prepetition Lender extended credit to
Paragon, including in respect of letters of credit, on the terms set forth
therein; and
WHEREAS, the Lead Borrower guaranteed the full and prompt payment of
Paragon's obligations under the Prepetition Credit Agreement; and
WHEREAS, as of the Filing Date, the Prepetition Lender under the
Prepetition Credit Agreement is owed $23,112,797.98 in principal obligations
incurred directly by Paragon, plus interest, fees, costs and expenses, and
letter of credit reimbursement obligations (the "PREPETITION OBLIGATIONS"); and
WHEREAS, the Prepetition Obligations are secured by Liens (the
"PREPETITION LIENS") on substantially all of the existing and after-acquired
assets of Paragon, such Liens are perfected and, except as otherwise permitted
in the Prepetition Credit Agreement, have priority over other Liens; and
WHEREAS, the Borrowers have requested that the Lenders provide
financing to the Borrowers pursuant to Section 364(c)(1), (2) and (3) and
Section 364(d) of the
Bankruptcy Code, and enter into this Agreement pursuant to which the Lenders
would extend to the Borrowers a revolving credit facility not to exceed at any
one time outstanding $7,000,000 (as such amount may be reduced pursuant to this
Agreement) to be available in the form of revolving loans advanced by the
Lenders from time to time; and
WHEREAS, the Lenders are willing to extend such credit to the
Borrowers on terms and conditions set forth herein and in the other Credit
Documents in accordance with Section 364(c)(1), (2) and (3) and Section 364(d)
of the Bankruptcy Code, so long as:
(a) such postpetition credit obligations are (i) secured
by Liens on substantially all of the property and interest, real and
personal, tangible and intangible, of the Borrowers whether now
owned or hereafter acquired, subject in priority only to certain
Liens and claims in respect of the Carve Out as herein provided and
(ii) given superpriority status as provided in the Orders; and
(b) KCCI receives certain adequate protection for the
Borrowers' use, sale or lease of collateral, including the
Borrowers' use of cash collateral, and the priming of the
Prepetition Liens securing the Prepetition Obligations; and
WHEREAS, the Borrowers have agreed to provide such collateral,
superpriority claims and adequate protection subject to the approval of the
Bankruptcy Court; and
WHEREAS, each Borrower and each guarantor thereof will derive
substantial direct and indirect benefit from the credit made available by the
Lenders to the Borrowers and is willing to guarantee all obligations (including
letter of credit reimbursement obligations, if any) of the Borrowers hereunder.
NOW, THEREFORE, in consideration of these premises and of the mutual
undertakings set forth herein, the parties hereto hereby agree as follows:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 The Commitments. The commitments provided for hereunder consist
of (a) the commitment of Presstek (the "TRANCHE A COMMITMENT") to advance,
subject to the terms and conditions of this Agreement, revolving credit loans at
the request of the Lead Borrower in amounts that, after the making of the Loan,
do not result in the aggregate amount of the principal balance of all Tranche A
Loans then outstanding exceeding $4,000,000.00 (the "TRANCHE A Loans"), (b) the
commitment of Presstek (the "TRANCHE B COMMITMENT") to advance, subject to the
terms and conditions of this Agreement, revolving credit loans at the request of
the Lead Borrower in amounts that, after the making of the Loan, result in the
aggregate amount of the principal balance of all Tranche A Loans and Tranche B
Loans then outstanding exceeding $4,000,000.00, but not exceeding $5,500,000.00
(the "TRANCHE B LOANS"), and (c) the commitment of
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KeyBank (the "TRANCHE C COMMITMENT") to advance, subject to the terms and
conditions of this Agreement, revolving credit loans at the request of the Lead
Borrower in amounts that, after the making of the Loan, result in the aggregate
amount of the principal balance of all Tranche A Loans, Tranche B Loans and
Tranche C Loans then outstanding exceeding $5,500,000.00, but not exceeding
$7,000,000.00. Subject to the terms and conditions set forth in this Agreement,
Presstek agrees to advance Tranche A Loans and, at such times as all Tranche A
Loans have been made, Presstek agrees to advance Tranche B Loans and at such
times as all Tranche A Loans and Tranche B Loans have been made, KeyBank agrees
to advance Tranche C Loans (each Tranche A Loan, Tranche B Loan and Tranche C
Loan being referred to herein as a "LOAN" and, collectively, as the "LOANS") to
the Borrowers on the request of the Lead Borrower from time to time from the
Closing Date to (but not including) the Maturity Date, in an aggregate principal
amount not to exceed at any time the amount of such Lender's Commitment;
provided, that the aggregate principal amount of all Loans outstanding (giving
effect to any requested Borrowings) shall not at any time exceed the least of
(a) the Total Commitments at such time, (b) the amount, if any, by which (i) the
sum of (1) the Borrowing Base at such time and (2) the applicable amount in the
"Cushion/(Over Advance)" line of the then current Budget exceeds (ii) the
principal amount of the Prepetition Obligations and (c) the amount approved to
be advanced to the Borrowers by way of Loans pursuant to the Orders. The
Borrowers may use the Commitments prior to the Maturity Date by borrowing,
prepaying and re-borrowing Loans in whole or in part, all in accordance with the
terms of this Agreement. Notwithstanding anything to the contrary set forth in
this Agreement the Lenders may, in their sole discretion, advance to the
Borrowers Loans in aggregate principal amount exceeding the maximum amount
otherwise applicable under clause (b) of the second preceding sentence of this
Section 1.01, but in no event exceeding the least of the amounts applicable
under clauses (a) and (c) of such sentence at the time any such Loan is to be
made.
1.02 Notice of Borrowing. (a) To request a Loan the Lead Borrower
shall give the Administrative Agent at its Notice Office, prior to 12:00 noon
(Cleveland, Ohio time), on the Business Day which is the requested date of a
proposed Borrowing, written notice of such Borrowing. Each such notice shall be
in the form of Exhibit A, shall be irrevocable and shall specify (i) the
aggregate principal amount of the Loans to be made pursuant to such Borrowing,
and (ii) the date of such Borrowing (which shall be a Business Day). Except as
hereinafter permitted, each such Notice of Borrowing shall be in writing signed
by the Lead Borrower and transmitted by the Lead Borrower to the Administrative
Agent by telecopier, telex or cable (in the case of telex or cable, confirmed in
writing prior to the date of the requested Borrowing). The Administrative Agent
shall promptly give each Lender obligated to fund the requested Loan written
notice of each proposed Borrowing, of the amount such Lender is obligated to
advance in respect thereof and of the other matters covered by the Notice of
Borrowing. Each of the Borrowers hereby irrevocably authorize the Lead Borrower
to make all requests for Borrowing hereunder.
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(b) Without in any way limiting the obligation of the
Lead Borrower to confirm in writing any telephonic notice of any Borrowing of
Loans, the Administrative Agent may act without liability upon the basis of
telephonic notice of such Borrowing, believed by the Administrative Agent in
good faith to be from the President or the Chief Financial Officer of the Lead
Borrower (or any other officer of the Lead Borrower designated in writing to the
Administrative Agent by the President or the Chief Financial Officer as being
authorized to give such notices under this Agreement) prior to receipt of
written confirmation. In each such case, the Borrowers hereby waive the right to
dispute the Administrative Agent's record of the terms of such telephonic notice
of such Borrowing of Loans. The Lead Borrower may request a Borrowing
telephonically so long as (i) a written Notice of Borrowing confirmation is
received by the Administrative Agent by 12:30 p.m. (Cleveland, Ohio time) and
(ii) the other requirements of this Section 1.03 are complied with.
1.03 Disbursement of Funds. (a) Promptly after receipt of a Notice
of Borrowing, the Administrative Agent shall elect, in its sole discretion,
either (i) to require same day funding pursuant to Section 1.03(b) for Loans in
connection with such requested Borrowing or (ii) to request KeyBank to make a
Settlement Advance pursuant to Section 1.03(c) in the amount of the requested
Borrowing; provided, however, that if KeyBank declines, in its sole discretion,
to make such Settlement Advance, the Administrative Agent shall elect to have
the terms of Section 1.03(b) apply to such requested Borrowing.
(b) In the event the Administrative Agent has elected to
have same day funding of a Borrowing pursuant to this Section 1.03(b), the
Administrative Agent shall notify each Lender of each Notice of Borrowing no
later than 12:30 p.m. (Cleveland, Ohio time) on the date received by telecopy,
telephone or similar form of transmission. Unless the Administrative Agent
elects to have periodic funding of Loans by the Lenders in accordance with
Section 1.03(c), each Lender shall, before 3:00 p.m. (Cleveland, Ohio time) on
the date of each Borrowing requested, make available to the Administrative
Agent, in immediately available funds at the account of the Administrative Agent
maintained at its Payment Office as shall have been notified by the Agent to the
Lenders prior to such date, such Lender's amount of funds, if any, required by
its Commitment in respect of the Borrowing requested to be made on such date. On
the date requested by the Lead Borrower for a Borrowing, after the
Administrative Agent's receipt of the funds representing a Lender's portion, as
required by its Commitment, of such Borrowing and subject to the terms and
conditions set forth in this Agreement, the Administrative Agent shall make such
Loan of such Lender available to the Lead Borrower, in immediately available
funds, by wire transfer or intrabank transfer in accordance with the
instructions of the Lead Borrower consistent with the terms of this Agreement.
Unless the Administrative Agent shall have received notice from a Lender prior
to the time of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's portion of such Borrowing, the Administrative
Agent may assume that such Lender has made its portion of such Borrowing
available to the Administrative Agent on
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the date of such Borrowing in accordance with this Section 1.03(b). In reliance
upon such assumption, the Administrative Agent may, but shall not be obligated
to, make available to the Lead Borrower, on such date, a corresponding portion
of such Borrowing. Any disbursement by the Administrative Agent in reliance on
such assumption shall be deemed a Tranche A Loan, a Tranche B Loan or a Tranche
C Loan, as applicable, by such Lender.
(c) In the event the Administrative Agent elects, in its
sole discretion, with the consent of KeyBank, to have periodic
funding of Borrowings of Tranche A Loans or Tranche B Loans pursuant to this
Section 1.03(c), KeyBank shall, upon the request of the Administrative Agent, on
the date requested by the Lead Borrower for a Borrowing, make a Tranche A Loan
or a Tranche B Loan, as applicable, to the Lead Borrower from its own funds and
on a nonratable basis pending settlement pursuant to Section 1.03(d) below in
the amount of such requested Borrowing (any Loan made solely by KeyBank pursuant
to this Section 1.03(c) being hereinafter referred to as a "SETTLEMENT ADVANCE"
and, collectively with all such Settlement Advances, as "SETTLEMENT ADVANCES");
provided, that the outstanding amount of Settlement Advances advanced by KeyBank
shall not at any time exceed an amount equal to the Total Commitment of the
Lenders in effect at such time, minus the aggregate outstanding principal
balance of all Loans at such time. If KeyBank has agreed to make requested
Settlement Advances, KeyBank shall, before 2:00 p.m. (Cleveland, Ohio time) on
the date requested by the Lead Borrower for such Borrowing, make such Settlement
Advance available to the Lead Borrower, in immediately available funds, by wire
transfer or intrabank transfer in accordance with the instructions of the Lead
Borrower consistent with the terms of this Agreement. Each Settlement Advance
shall be deemed for all purposes hereof to be a Loan hereunder and shall be
subject to all of the terms and conditions applicable to other Loans except that
all payments thereon shall be payable to KeyBank solely for its own account (and
for the account of the holder of any participation interest with respect to such
Loan purchased pursuant to Section 13.04 of this Agreement). The Administrative
Agent shall not request KeyBank to make any Settlement Advances if the
Administrative Agent has received written notification from any Lender that one
or more conditions set forth in Section 6 will not be satisfied on the date
requested by the Lead Borrower for such Borrowing. Prior to making, in its sole
discretion, any Settlement Advance, KeyBank shall not be otherwise required to
determine whether the conditions precedent set forth in Section 6 of this
Agreement have been satisfied or whether the requested Borrowing would exceed
the Total Commitment of the Lenders then in effect.
(d) The Administrative Agent and the Lenders hereby
agree that, except in the case of Settlement Advances pending settlement as
provided in this Section 1.03(d), each Lender's funded portion of such
Settlement Advances is intended to be equal to such Lender's portion of Tranche
A Loans or Tranche B Loans, as applicable, required by its Commitments. The
Administrative Agent and the Lenders agree (which agreement shall not be for the
benefit of or enforceable by any of the Borrowers) that, in
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order to facilitate the administration of this Agreement and the other Credit
Documents, the Administrative Agent may elect, with the consent of KeyBank, to
settle accounts (each settlement of accounts hereunder a "SETTLEMENT") as to the
Settlement Advances among the Lenders on a periodic basis in accordance with
this Section 1.03(d). The Administrative Agent shall request such Settlement of
accounts of the Lenders as to Settlement Advances on a basis not less frequently
than once during each five (5) Business Day period, or on a more frequent basis
if so determined by the Administrative Agent, by notifying the other Lenders by
telecopy, telephone or other similar form of transmission, of such requested
Settlement, no later than 12:30 p.m. (Cleveland, Ohio time) on the date of such
requested Settlement (the "SETTLEMENT DATE"). The Settlement Date for
outstanding Settlement Advances shall be such day of each calendar week as the
Administrative Agent shall notify the Lenders from time to time. Each Lender
(other than KeyBank) shall make the amount of such Lender's portion of the
outstanding principal amount of the Settlement Advances with respect to which
Settlement is requested available to the Administrative Agent, for the account
of KeyBank, in immediately available funds at the account of the Agent
maintained at the Payment Office not later than 2:00 p.m. (Cleveland, Ohio
time), on the Settlement Date applicable thereto. Such Settlement shall occur
regardless of whether the applicable conditions precedent set forth in Section 6
have then been satisfied. Such amounts made available to the Administrative
Agent shall be applied against the amounts of the applicable Settlement Advance
and shall constitute Tranche A Loans or Tranche B Loans, as applicable.
Notwithstanding the occurrence of a Default or an Event of Default and
regardless of whether the Administrative Agent has requested a Settlement with
respect to a Settlement Advance, in the event that any Loan pursuant to this
Section 1.03(d) cannot be made by the Lenders because one or more of the Lenders
shall determine that such Lenders are legally prohibited from making such a
Loan, each such Lender shall irrevocably and unconditionally purchase and
receive from KeyBank, without recourse or warranty, an undivided interest and
participation in such Settlement Advance to the extent of such Lender's portion
thereof as required by its Commitment by paying to the Administrative Agent, in
immediately available funds, an amount equal to such Lender's portion, as
required by its Commitment, of such Settlement Advance on the date the Loan
would have been made pursuant to this Section 1.03(d). If such amount is not in
fact made available to the Administrative Agent by any Lender, the
Administrative Agent shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the Federal Funds Effective Rate
for the first three (3) days from and after such demand and thereafter at the
interest rate then applicable to the Loans. From and after the date, if any, on
which a Lender purchases an undivided interest and participation in any
Settlement Advance pursuant to this Section 1.03(d) and subject to Sections
13.04 and 13.06 of this Agreement, such Lender shall be entitled to its portion
of all payments made by or on behalf of the Borrowers in respect of, and all
Collections and Remittances received by the Administrative Agent and credited
to, such Settlement Advance. Pursuant to the Administrative Agent's election for
periodic funding, the Administrative Agent and KeyBank may be advancing and may
be receiving repayments in respect of Loans prior to the time the Lenders
actually advance or are actually repaid
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Loans. Each of: (i) KeyBank with respect to Settlement Advances, and (ii) each
Lender with respect to the Loans other than Settlement Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement accruing on the amount of funds employed by reason of actual Loans by
KeyBank or such Lender. Funds shall be deemed employed by KeyBank or the
Lenders, as the case may be, until such time as: (I) in the case of KeyBank,
payments are credited to the Borrowers pursuant to Section 5.08 or Collections
or Remittances are received by the Administrative Agent by reason of deposit to
the Borrower Cash Collateral Account and credited to the Borrowers pursuant to
Sections 5.04-.07 or (II) in the case of a Lender, funds representing such
Lender's portion of such payment or Collections and Remittances are received by
such Lender from the Administrative Agent pursuant to Section 5.06 of this
Agreement.
(e) If and to the extent that any Lender shall not have
made available to the Administrative Agent such Lender's portion as required by
its Commitment of any Borrowing advanced by the Administrative Agent on behalf
of the Lenders on the Closing Date or thereafter (whether advanced by KeyBank on
behalf of the Lenders pursuant to Section 1.04(d) or otherwise pursuant to this
Agreement), such Lender agrees to pay, and the Borrowers agree to repay to the
Administrative Agent, severally and not jointly and severally, immediately upon
demand by the Administrative Agent, an amount equal to such Lender's portion of
such Borrowing, together with interest thereon for each day from the date such
amount is made available to the Lead Borrower until the date such amount is
repaid to the Administrative Agent, at: (i) in the case of the Lender, the
Federal Funds Effective Rate for the first three (3) days from and after the
date of the Borrowing and thereafter at the interest rate then applicable to
such Borrowings and (ii) in the case of the Borrowers, the interest rate
applicable at the time to such Borrowings. If such Lender pays to the
Administrative Agent the Lender's portion required by its Commitment of such
Borrowing prior to repayment of such amount by the Borrowers, the amount so
repaid shall constitute such Lender's portion of such Borrowing, and the
Borrowers shall have no further obligation to make the payment required by this
Section 1.04(e).
(f) Nothing herein shall be deemed to relieve any Lender
from its obligation to fulfill its Commitment(s) hereunder or to prejudice any
rights which the Borrowers may have against any Lender as a result of any
default by such Lender hereunder.
1.04 Notes. (a) At the request of any Lender, the Borrowers'
obligation to pay the principal of and interest on all the Loans made to it by
each Lender shall be evidenced by a promissory note (each a "NOTE" and,
collectively the "NOTES") duly executed and delivered by the Borrowers
substantially in the form of Exhibit B hereto, with blanks appropriately
completed in conformity herewith.
(b) Each Lender will note on its internal records the
amount of each Loan made by it and each payment in respect thereof and will,
prior to any transfer of its
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Notes, endorse on the reverse side thereof the outstanding principal amount of
Loans evidenced thereby. Such notation shall be conclusive absent manifest
error, although the failure to make any such notation shall not affect the
Borrowers' obligations in respect of such Loans.
1.05 Allocations of Borrowings. All Borrowings of Tranche A Loans
under this Agreement shall be incurred solely from Presstek on the basis of
Presstek's Tranche A Commitment, all Borrowings of Tranche B Loans under this
Agreement shall be incurred solely from Presstek on the basis of Presstek's
Tranche B Commitment and all Borrowings of Tranche C Loans under this Agreement
shall be incurred solely from KeyBank on the basis of KeyBank's Tranche C
Commitment. No Lender shall be responsible for any default by any other Lender
in its obligation to fund Loans hereunder and each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its Commitments hereunder.
1.06 Interest. (a) Except as provided in this Section 1.07(b), the
unpaid principal amount of each Loan shall bear interest from the date of the
Borrowing thereof to the date such Loan is repaid, at a rate per annum which
shall at all times equal the lesser of (i) 100 basis points less than the Prime
Rate in effect from time to time and (ii) three percent (3.00%).
(b) During the continuance of an Event of Default, the
principal of the Loans (and overdue interest and all other overdue amounts
payable hereunder to the extent permitted by applicable law) shall upon notice
by the Administrative Agent, until such Event of Default has been cured or
remedied or waived pursuant to Section 13.12, bear interest at a rate per annum
equal to two percent (2%) above the rate of interest otherwise applicable to
such Loans pursuant to Section 1.07(a).
(c) Interest shall accrue from and including the date of
any Borrowing to but excluding the date of any repayment thereof and shall be
payable in arrears on each Monthly Payment Date and the Maturity Date, and after
the Maturity Date, on demand.
(d) As adequate protection for the use of the
Prepetition Collateral, Postpetition Interest shall (i) be paid to KCCI solely
for its own account as a Prepetition Lender on each Monthly Payment Date, and
after the Maturity Date on demand and (ii) be paid to the Prepetition Lenders in
accordance with the terms of the Prepetition Credit Agreement. All computations
of interest hereunder shall be made in accordance with Section 13.07(b).
1.07 Increased Costs, Illegality, etc. If the Administrative Agent
or any Lender shall have determined that after the Closing Date, the adoption or
effectiveness of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental
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Authority, central bank or comparable agency charged by relevant authority with
the interpretation or administration thereof, or compliance by the
Administrative Agent or such Lender (or any corporation controlling such Lender)
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing, by an amount reasonably deemed by the
Administrative Agent or such Lender to be material, the rate of return on the
Administrative Agent's or such Lender's (or such controlling corporation's)
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which the Administrative Agent or such Lender (or such
controlling corporation) could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's (or
such controlling corporation's) policies with respect to capital adequacy), then
from time to time, within fifteen (15) days after written demand by the
Administrative Agent or such Lender (with a copy to the Administrative Agent and
accompanied by the notice described in the last sentence of this Section 1.08),
the Borrowers shall, subject to the provisions of Section 13.17 (to the extent
applicable), pay to the Administrative Agent or such Lender such additional
amount or amounts as will compensate the Administrative Agent or such Lender (or
such controlling corporation) for such reduction. The Administrative Agent and
each Lender, upon determining that any additional amounts will be payable
pursuant to this Section 1.08, will give prompt written notice thereof to the
Lead Borrower, which notice shall set forth in reasonable detail the basis of
the calculation of such additional amounts, which basis shall be reasonable,
although the failure to give any such notice shall not release or diminish any
of the Borrowers' obligations to pay additional amounts pursuant to this Section
1.08 upon the subsequent receipt of such notice.
1.08 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.08 or Section
4.04 with respect to such Lender, it will, if requested by the Lead Borrower,
use reasonable efforts (subject to overall policy considerations of such Lender)
to designate another lending office for any Loans or its Commitment, as the case
may be, if affected by such event, provided that such designation is made on
such terms that such Lender and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such Section. Nothing in this Section
1.09 shall affect or postpone any of the obligations of the Borrowers or the
right of any Lender provided in Section 1.08 or Section 4.04.
SECTION 2. [Reserved---Letters of Credit.]
SECTION 3. Fees, Commitments.
3.01 Fees. (a) The Borrowers agree to pay to the Administrative
Agent a commitment commission ("COMMITMENT COMMISSION") for the account of each
Lender for the period from and including the Closing Date to, but not including,
the date
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the Total Commitments have been terminated, computed at a rate for each day
equal to 0.50% per annum on the daily average of such Lender's Unutilized
Commitment. Such Commitment Commission shall be due and payable in arrears on
each Monthly Payment Date of each year and on the date upon which the Total
Commitments are terminated.
(b) The Borrowers agrees to pay to the Administrative
Agent at closing a facility fee in the amount of $50,000.00, which shall be
deemed to be fully earned at closing, of which 80% shall be allocated to
Presstek and 20% shall be allocated to KeyBank.
(c) All computations of Fees shall be made in accordance
with Section 13.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least three (3)
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrowers shall have the right, without premium or penalty, to terminate or
partially reduce the Total Commitment, provided, that (a) any such partial
reduction shall first permanently reduce the Tranche C Commitment until such
Commitment is reduced to zero and only thereafter may the Tranche B Commitment
be reduced, (b) only after the Tranche B Commitment is reduced to zero may the
Tranche A Commitment be reduced, (c) any termination must terminate all
Commitments and (d) any partial reduction pursuant to this Section 3.02 shall be
in the amount of at least $500,000.
3.03 Mandatory Reductions of Commitments, etc. (a) The Commitments
shall terminate on the Maturity Date and be automatically reduced permanently to
zero.
(b) In addition, the Total Commitments shall be reduced
as provided in Section 4.02.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrowers shall have the right to
prepay Loans in whole or in part, without premium or penalty, from time to time
on the following terms and conditions:
(a) the Lead Borrower shall give the Administrative
Agent at the Payment Office written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay the Loans and the amount of such
prepayment, which notice shall be given by the Lead Borrower at least one
Business Day prior to the date of such prepayment, and which notice shall
promptly be transmitted by the Administrative Agent to each of the Lenders;
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(b) each partial prepayment shall be in an aggregate
principal amount of at least $500,000; and
(c) each partial prepayment shall first be applied to
repayment of all Tranche C Loans and only after all Tranche C Loans have been
repaid in full shall any prepayments be applied to Settlement Advances, and only
after all Settlement Advances have been repaid in full shall any prepayments be
applied to Tranche B Loans, and only after all Tranche B Loans have been repaid
in full shall any prepayments be applied to any Tranche A Loans.
The notice provisions, the provisions with respect to the minimum amount of any
prepayment, and the provisions requiring prepayments in integral multiples above
such minimum amount of this Section 4.01 are for the benefit of the
Administrative Agent and may be waived unilaterally by the Administrative Agent.
4.02 Mandatory Prepayments and Repayment.
(a) The Loans shall become due and payable in full, and
the Borrowers shall repay the Loans in full, on the Maturity Date, together with
any and all accrued and unpaid interest thereon and any fees and other
obligations due and payable hereunder; provided, however, that Collections and
Remittances deposited into the Borrower Cash Collateral Account will be applied
to the Loans on an ongoing basis in accordance with Section 5.07 of this
Agreement.
(b) If on any date the sum of the aggregate outstanding
principal amount of Loans then outstanding exceeds an amount equal to the lesser
of (i) the aggregate Commitments at such time, and (ii) the amount approved to
be advanced to the Borrowers by way of Loans pursuant to the Orders, the
Borrowers shall repay on such date Loans in an aggregate amount equal to such
excess.
(c) On the first Business Day after receipt by any of
the Borrowers or any of their Subsidiaries of Net Cash Proceeds from any Asset
Sale, the Borrowers shall pay to the Administrative Agent an amount equal to the
lesser of (i) one hundred percent (100%) of such Net Cash Proceeds and (ii) the
sum of the aggregate amount of Loans then outstanding (together with accrued and
unpaid interest thereon), to repay such Loans, and the Total Commitments shall
be permanently reduced by an amount equal to one hundred percent (100%) of such
Net Cash Proceeds, with the Tranche C Commitment to be reduced first until such
Commitment is reduced to zero, the Tranche B Commitment to be reduced next until
such Commitment is reduced to zero and the Tranche A Commitment to be reduced
last.
(d) On the first Business Day after receipt by any of
the Borrowers or any of their Subsidiaries of Net Offering Proceeds of the sale
or issuance of Capital Stock of (or cash capital contributions to) the Borrowers
or any of their Subsidiaries the
11
Borrowers shall pay to the Administrative Agent an amount equal to the lesser of
(i) one hundred percent (100%) of such Net Offering Proceeds and (ii) the sum of
the aggregate amount of Loans then outstanding (together with accrued and unpaid
interest thereon), to repay such Loans, and the Total Commitments shall be
permanently reduced by an amount equal to one hundred percent (100%) of such Net
Offering Proceeds, with the Tranche C Commitment to be reduced first until such
Commitment is reduced to zero, the Tranche B Commitment to be reduced next until
such Commitment is reduced to zero and the Tranche A Commitment to be reduced
last.
(e) On the first Business Day after receipt by the
Borrowers or any of their Subsidiaries of proceeds from any Recovery Event, the
Borrowers shall pay to the Administrative Agent an amount equal to the lesser of
(i) one hundred percent (100%) of such proceeds (net of reasonable costs and
taxes incurred in connection with such Recovery Event) and (ii) the sum of the
aggregate amount of Loans then outstanding (together with accrued and unpaid
interest thereon), to repay such Loans, and the Total Commitments shall be
permanently reduced by an amount equal to one hundred percent (100%) of such
proceeds, with the Tranche C Commitment to be reduced first until such
Commitment is reduced to zero, the Tranche B Commitment to be reduced next until
such Commitment is reduced to zero and the Tranche A Commitment to be reduced
last; provided that with the prior consent of the Administrative Agent (which
consent may be granted or withheld in the sole discretion of the Administrative
Agent) the Borrowers may apply such proceeds to repair or replace assets lost or
damaged in connection with such Recovery Event and no such repayment of Loans
shall be required to the extent of such application of proceeds.
(f) On the first Business Day after receipt by any of
the Borrowers or any of their Domestic Subsidiaries of any United States federal
tax refund the Borrowers shall pay to the Administrative Agent an amount equal
to the lesser of (i) one hundred percent (100%) of such tax refund and (ii) the
sum of the aggregate amount of Loans then outstanding (together with accrued and
unpaid interest thereon), to repay such Loans, and the Total Commitments shall
be permanently reduced by an amount equal to one hundred percent (100%) of such
refund, with the Tranche C Commitment to be reduced first until such Commitment
is reduced to zero, the Tranche B Commitment to be reduced next until such
Commitment is reduced to zero and the Tranche A Commitment to be reduced last
(g) Except as expressly provided in this Agreement, all
prepayments of principal made by the Borrowers pursuant to Section 4.02 shall be
applied: (i) to the payment of the then outstanding balance of the Loans in
accordance with the provisions of Section 4.01(c) with a corresponding permanent
reduction of the Commitments in the amount of such payment; and (ii) held as
cash collateral in accordance with Section 8.14.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative
12
Agent for the account of the Lenders entitled thereto (which funds the
Administrative Agent shall promptly forward to such Lenders), not later than
1:00 P.M. (Cleveland, Ohio time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the Payment Office, it being understood that written notice by the Lead
Borrower to the Administrative Agent to make a payment from the funds in the
Borrower Cash Collateral Account at the Payment Office shall constitute the
making of such payment to the extent of such funds held in such account. Any
payments under this Agreement which are made later than 1:00 P.M. (Cleveland,
Ohio time) shall be deemed to have been made on the next succeeding Business
Day. Whenever any payment to be made hereunder shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrowers hereunder
or under any Credit Document will be made without setoff, counterclaim or other
defense. Except as provided in this Section 4.04, all payments hereunder and
under any of the Credit Documents (including, without limitation, payments on
account of principal and interest and fees) shall be made by the Borrowers free
and clear of and without deduction or withholding for or on account of any
present or future tax, duty, levy, impost, assessment or other charge of
whatever nature now or hereafter imposed by any Governmental Authority, but
excluding therefrom
(i) a tax imposed on or measured by the overall net
income (including a franchise tax based on net income) of the lending office of
the Lender in respect of which the payment is made by the jurisdiction in which
the Lender is incorporated or the jurisdiction (or political subdivision or
taxing authority thereof) in which its lending office is located,
(ii) in the case of any Lender organized under the laws
of any jurisdiction other than the United States or any state thereof (including
the District of Columbia), any taxes imposed by the United States by means of
withholding at the source unless such withholding results from a change in
applicable law, treaty or regulations or the interpretation or administration
thereof (including, without limitation, any guideline or policy not having the
force of law) by any authority charged with the administration thereof
subsequent to the date such Lender becomes a Lender with respect to the Loans or
portion thereof affected by such change, and
(iii) any tax imposed on or measured by the overall net
income (including a franchise tax based on net income) of a Lender or an office
or branch thereof by the United States of America or any political subdivision
or taxing authority thereof or therein (such tax or taxes, other than excluded
tax or taxes, being herein referred to as "TAX" or "TAXES"). If the Borrowers
are required by law to make any deduction or withholding of any Taxes from any
payment due hereunder or under any of the Credit
13
Documents, then the amount payable will be increased to such amount which, after
deduction from such increased amount of all such Taxes required to be withheld
or deducted therefrom, will not be less than the amount due and payable
hereunder had no such deduction or withholding been required. A certificate as
to any additional amounts payable to a Lender under this Section 4.04 submitted
to the Lead Borrower by such Lender shall show in reasonable detail the amount
payable and the calculations used to determine in good faith such amount and
shall, absent manifest error, be final, conclusive and binding upon all parties
hereto.
(b) If the Borrowers make any payment hereunder or under
any of the Credit Documents in respect of which they are required by law to make
any deduction or withholding of any Taxes, the Borrowers shall pay the full
amount to be deducted or withheld to the relevant taxation or other authority
within the time allowed for such payment under applicable law and shall deliver
to the Lenders within thirty (30) days after it has made such payment to the
applicable authority a receipt issued by such authority evidencing the payment
to such authority of all amounts so required to be deducted or withheld from
such payment.
(c) Without prejudice to the other provisions of Section
4.04, if any Lender, or the Administrative Agent on its behalf, is required by
law to make any payment on account of Taxes on or in relation to any amount
received or receivable hereunder or under any of the Credit Documents by such
Lender, or the Administrative Agent on its behalf, or any liability for Tax in
respect of any such payment is imposed, levied or assessed against any Lender or
the Administrative Agent on its behalf, the Borrowers will promptly, following
receipt of the certificate described in the immediately following sentence,
indemnify such person against such Tax payment or liability, together with any
interest, penalties and expenses (including reasonable counsel fees and
expenses) payable or incurred in connection therewith, including any tax of any
Lender arising by virtue of payments under this Section 4.04(c), computed in a
manner consistent with this Section 4.04(c). A certificate prepared in good
faith as to the amount of such payment by such Lender, or the Administrative
Agent on its behalf, absent manifest error, shall be final, conclusive and
binding upon all parties hereto for all purposes.
(d) Each Lender that is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) agrees to deliver to
the Lead Borrower and the Administrative Agent on or prior to the Closing Date,
or in the case of a Lender that is an Assignee of an interest under this
Agreement pursuant to Section 13.04 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment), on the date of such
assignment to such Lender, (i) two accurate and complete original signed copies
of IRS Form X-0XXX, X-0XXX or W-8IMY (or successor or other applicable forms
prescribed by the IRS) certifying to such Lender's entitlement to a complete
exemption from or reduced rate of United States withholding tax on interest
payments to be made under this Agreement and under any Note, or (ii) if the
Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code
and
14
cannot deliver the applicable form pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit C (any such certificate, a
"SECTION 4.04(D)(II) CERTIFICATE") and (y) two accurate and complete original
signed copies of IRS Form W-8 (or successor form) certifying to such Lender's
entitlement to a complete exemption from United States withholding tax on
payments of interest to be made under this Agreement and under any Note;
provided, however, that no Lender shall be required to deliver an IRS Form
X-0XXX, X-0XXX, W-8IMY, or Section 4.04(d)(ii) Certificate under this Section
4.04(d) to the extent that the delivery of such form is not authorized by law;
provided, further, however, that in the event that a Lender provides the
Borrowers or the Administrative Agent with an IRS Form W-8IMY (or substitute
form) indicating that it is a "flow through" entity, as defined in Treasury
Regulations promulgated under Section 1441 of the Code, or otherwise, not a
beneficial owner of interest payments under this Agreement and under any Note,
such Lender agrees, on or prior to the Closing Date, or the date of assignment
to such Lender, as applicable, to take any actions necessary, and to deliver to
the Borrowers and the Administrative Agent all forms necessary, to establish
such Lender's entitlement to a complete exemption from, or a reduction in,
United States withholding tax on payments of interest to be made under this
Agreement and under any Note, including causing its partners, members,
beneficiaries, beneficial owners, and their beneficial owners, if any, to take
any actions and deliver any forms necessary to establish such exemption.
Notwithstanding the foregoing, (i) a fiscally transparent entity may provide an
IRS Form W-8BEN to claim a treaty exemption or rate reduction to the extent that
such entity is receiving interest and is not treated as fiscally transparent by
its own jurisdiction, provided, that the satisfaction of such conditions
entitles the Lender to an exemption or reduction from withholding at the time
such Lender becomes a party to this Agreement and (ii) a withholding foreign
partnership, withholding foreign trust, and qualified intermediary shall only
provide such information as is required by Treasury Regulations promulgated
under Code Section 1441. For purposes of this Agreement, the term "Forms" shall
include any attachments to IRS Forms W-8 IMY required to be filed by the Lender.
In addition, each Lender agrees that from time to time after the Closing Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, such Lender will
deliver to the Lead Borrower and the Administrative Agent two new accurate and
complete original signed copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY and a
Section 4.04(d)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender (or
its partners, members, beneficiaries, or beneficial owners) to a continued
exemption from or reduction in United States withholding Tax on interest
payments under this Agreement and any Note, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such form
or certificate; provided, however, that no Lender shall be required to deliver
an IRS Form X0-XXX, X-0XXX, or W-8IMY under this Section 4.04(d) to the extent
that the delivery of such form is not authorized by law; provided, further,
however, that any Lender which does not deliver the applicable form pursuant to
this Section 4.04(d) shall be entitled to additional payment pursuant to Section
4.04(a) or indemnification under Section 4.04(c) only if and to the extent (i)
such failure results
15
from a change in law or (ii) the Tax to which such additional payment or
indemnification relates would have been imposed regardless of whether such
Lender provided such forms. Notwithstanding anything to the contrary contained
in Section 4.04, any Lender that has not provided to the Borrower the IRS Forms
required to be provided to the Borrowers pursuant to this Section 4.04(d) shall
not be entitled to any payment of additional amounts pursuant to Section 4.04(a)
or indemnification under Section 4.04(c) with respect to any deduction or
withholding which would not have been required if such Lender had provided such
forms.
(e) Each Lender that is incorporated or organized under
the laws of the United States of America or a state thereof shall provide two
properly completed and duly executed copies of IRS Form W-9, or any successor or
other applicable form. Each Lender shall deliver to the Borrowers and the
Administrative Agent (provided that such Lender remains lawfully able to do so),
two further duly executed forms and statements, properly completed in all
material respects, at or before the time any such form or statement expires or
becomes obsolete, or otherwise as reasonably requested by the Borrower. Each
Lender shall promptly notify the Borrowers at any time it determines that it is
no longer in a position to provide any previously delivered certificate to the
Borrower (or any other form or certification adopted by U.S. taxing authorities
for such purpose).
(f) Each Lender agrees that, as promptly as practicable
after it becomes aware of the occurrence of any event or the existence of any
condition that would cause the Borrowers to make a payment in respect of any
Taxes to such Lender pursuant to Section 4.04(a) or a payment in indemnification
for any Taxes pursuant to Section 4.04(c), it will use reasonable efforts to
make, fund or maintain the Loan (or portion thereof) of such Lender with respect
to which the aforementioned payment is or would be made through another lending
office of such Lender or take any other action reasonably requested by the Lead
Borrower if as a result thereof the additional amounts which would otherwise be
required to be paid by the Borrowers in respect of such Loans (or portions
thereof) pursuant to Section 4.04(a) or Section 4.04(c) would be materially
reduced, and if, as determined by such Lender, in its reasonable discretion, the
making, funding or maintaining of such Loans (or portions thereof) through such
other lending office or taking of such other action would not otherwise
materially adversely affect such Loans or such Lender. The Borrowers agrees to
pay all reasonable expenses incurred by any Lender in utilizing another lending
office of such Lender or taking of such other action pursuant to this Section
4.04(f).
SECTION 5. Priority and Collateral Security.
5.01 Superpriority Claims and Collateral Security. The Borrowers
hereby represent, warrant and covenant that, except as otherwise expressly
provided in this Section 5.01, upon the entry of the Final Order:
16
(a) subject to the Carve Out, the Tranche A Loans shall
be:
(i) secured by first priority liens on and security
interests pursuant to Section 364(c)(2) of the Bankruptcy Code in all of the
outstanding capital stock of the Debtors' Subsidiaries in the United Kingdom and
Canada;
(ii) pursuant to Section 364(c)(3) of the Bankruptcy
Code, secured by liens and security interests that are junior to the liens and
security interests of the Prepetition Lender under the Prepetition Financing
Documents, on all of the assets of the Borrowers and their Domestic
Subsidiaries, including without limitation, all goods (including without
limitation, equipment and inventory), deposit accounts, investment property,
accounts, chattel paper, instruments, documents, letter-of-credit rights,
commercial tort claims, insurance claims, supporting obligations and liens, real
estate interests and general intangibles of the Borrowers and their Domestic
Subsidiaries of any nature, whether now owned or hereafter acquired, but
excluding Avoidance Claims; and
(iii) entitled to Superpriority Claim status pursuant to
Section 364(c)(1) of the Bankruptcy Code senior to any other claims of any
entity, including, without limitation, any claims under Sections 503, 507, 1113
and 1114 of the Bankruptcy Code, except that any Superpriority Claim status
accorded to the Tranche A Loans shall have equal priority, pari passu, with any
Superpriority Claim held by the Prepetition Lender pursuant to Section 507(b) of
the Bankruptcy Code.
The liens described in Subsections (a)(i) and (a)(ii) above are referred to as
the "TRANCHE A LIENS".
(b) subject to the Carve Out, the Tranche B Loans and
the Tranche C Loans shall be:
(i) secured pursuant to Section 364(d)(1) of the
Bankruptcy Code by first priority security interests in and liens on (A) all of
the assets of the Borrowers and their Domestic Subsidiaries, including, without
limitation, all goods (including without limitation, equipment and inventory),
deposit accounts, investment property, accounts, chattel paper, instruments,
documents, letter-of-credit rights, commercial tort claims, insurance claims,
supporting obligations and liens, real estate interests, Avoidance Claims and
general intangibles of the Borrowers and their Domestic Subsidiaries of any
nature, whether now owned or hereafter acquired and (B) any assets of the
Borrowers in which the Prepetition Lender was not granted a security interest or
lien under the terms of the Prepetition Financing Documents, senior in priority
to all other security interests and liens (the "TRANCHE B AND TRANCHE C LIENS");
and
(ii) entitled to Superpriority Claim status pursuant to
Section 364(c)(1) of the Bankruptcy code senior to any Superpriority Claim
granted as adequate protection in respect to the Prepetition Lender and any
other claims of any entity,
17
including, without limitation, any claims under Sections 503, 507, 1113 and 1114
of the Bankruptcy Code.
(c) the Tranche A Liens and the Tranche B and Tranche C
Liens are not subject to Section 551 of the Bankruptcy Code.
5.02 Collateral Security Perfection. The Borrowers agree to take all
actions that the Administrative Agent or any Lender may reasonably request as a
matter of nonbankruptcy law to perfect and protect the Administrative Agent's
and the Lenders' Liens upon the Collateral and for such Liens to obtain the
priority therefor contemplated hereby, including, without limitation, executing
and delivering such documents and instruments, financing statements, providing
such notices and assents of third parties, obtaining such governmental approvals
and providing such other instruments and documents in recordable form as the
Administrative Agent or any Lender may request. Each of the Borrowers hereby
irrevocably authorizes the Administrative Agent at any time and from time to
time to file in any filing office in any Uniform Commercial Code jurisdiction
any initial financing statements and amendments thereto that (a) indicate the
Collateral (i) as "all assets of the Borrower" or words of similar effect,
regardless of whether any particular asset comprised in the Collateral falls
within the scope of Article 9 of the UCC of such jurisdiction, or (ii) as being
of an equal or lesser scope or with greater detail, and (b) provide any other
information required by part 5 of Article 9 of the Uniform Commercial Code of
any jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment, including (i) whether such Borrower is an
organization, the type of organization and any organization identification
number issued to such Borrower and, (ii) in the case of a financing statement
filed as a fixture filing, a sufficient description of real property to which
the Collateral relates. Each of the Borrowers agree to furnish any such
information to the Administrative Agent promptly upon the Administrative Agent's
request.
5.03 No Discharge; Survival of Claims. The Borrowers agree that (a)
the Obligations shall not be discharged by the entry of an order confirming a
Reorganization Plan (and the Borrowers pursuant to Section 1141(d)(4) of the
Bankruptcy Code, hereby waive any such discharge), (b) the Superpriority Claim
granted to the Administrative Agent and Lenders pursuant to the Orders and the
Liens granted to the Administrative Agent, for the benefit of the Administrative
Agent and the Lenders pursuant to the Orders and the other Security Documents,
shall not be affected in any manner by the entry of an order confirming a
Reorganization Plan and (c) the Borrowers shall not propose or support any
Reorganization Plan that is not conditioned upon the Payment In Full on or prior
to the Maturity Date, and, with respect to Obligations arising pursuant to
Section 13.01 after such date, thereafter for the payment in full of such
Obligations in cash when due and payable.
5.04 Receipt of Collections and Remittances. All Collections or
Remittances received directly by any Borrower shall be deemed held by such
Borrower
18
in trust and as fiduciary for the Administrative Agent for the benefit of the
Lenders. Each Borrower immediately shall deposit any such Collection or
Remittance, in its original form, into the Borrower Cash Collateral Account.
Pending such deposit, each Borrower agrees that it will not commingle any such
Collection or Remittance with any of such Borrower's other funds or property,
but will hold it separate and apart therefrom in trust and as fiduciary for the
Administrative Agent until deposit is made into the Borrower Cash Collateral
Account.
5.05 Cash Collateral Accounts. Paragon has established the Borrower
Cash Collateral Account with KeyBank National Association. All Collections and
Remittances of any kind deposited in the Borrower Cash Collateral Account are
the sole and exclusive property of the Administrative Agent for the benefit of
the Lenders. Each Borrower shall cause all Collections and Remittances not
deposited into the Borrower Cash Collateral Account to be swept to the Borrower
Cash Collateral Account on a daily basis. All funds at any time in the Borrower
Cash Collateral Account shall be deemed to be the property of the Administrative
Agent for the benefit of the Lenders and shall be subject only to the signing
authority designated from time to time by the Administrative Agent. No Borrower
shall have any interest therein or control over such funds. Nevertheless, to the
extent funds in the Borrower Cash Collateral Account are deemed to be the
property of any Borrower, each Borrower hereby grants to the Administrative
Agent a security interest in all funds held in the Borrower Cash Collateral
Account, as security for the Obligations. The Borrower Cash Collateral Account
shall not be subject to any deduction, set-off, banker's lien or any other right
in favor of any person or entity other than the Administrative Agent.
5.07 Application of Collections and Remittances. Deposits to the
Borrower Cash Collateral Account in respect of any Borrower shall be credited to
the Borrowers as follows: (i) first, to the payment of Adequate Protection
Payments, to the extent not previously paid; (ii) second, to the payment of
interest due on the Tranche C Loans, if any, made to the Borrowers; (iii) third,
to the outstanding principal amount of any Tranche C Loans, and any other fees,
expenses, costs or other Obligations owed with respect to the Tranche C Loans;
(iv) fourth, to the payment of interest due on the Tranche B Loans, if any, made
to the Borrowers; (v) fifth, to the outstanding principal amount of any Tranche
B Loans, and any other fees, expenses, costs or other Obligations owed with
resepct to the Tranche B Loans (A) first to Tranche B Loans comprised of
Settlement Advances and (B) then to other Tranche B Loans in such order as the
Administrative Agent may choose in its sole discretion; (vi) sixth, to the
payment of interest due on the Tranche A Loans made to the Borrowers; (vii)
seventh, to the outstanding principal of any Tranche A Loans, and any other
fees, expenses, costs or other Obligations owed with respect to the Tranche C
Loans (A) first to Tranche A Loans comprised of Settlement Advances and (B) then
to other Tranche A Loans in such order as the Administrative Agent may choose in
its sole discretion; (viii) eighth, to late charges until paid in full; (ix)
ninth, to payment of Prepetition Indebtedness consisting of principal; and (x)
last, to any portion of Prepetition Indebtedness consisting of costs and
expenses.
19
5.08 Crediting of Collections and Remittances. For the purpose of
calculating in respect of the Borrowers interest and determining the aggregate
Loans outstanding and resulting availability hereunder, all Collections and
Remittances shall be credited to the Borrowers: (a) in the case of Collections
and Remittances received by wire transfer prior to 12:00 noon (Cleveland, Ohio
time), on the same Business Day as received, (b) in the case of Collections and
Remittances received by wire transfer after 12:00 noon (Cleveland, Ohio time),
on the next succeeding Business Day after such receipt and (c) in the case of
all other Collections and Remittances received, two Business Days after the
Business Day on which the Administrative Agent receives notice of the deposit of
the proceeds of such Collections and Remittances into the Borrower Cash
Collateral Account, and is in good funds with respect thereto prior to 12:00
noon (Cleveland, Ohio time). From time to time, upon advance written notice to
the Lead Borrower, the Administrative Agent may adopt such additional or
modified regulations and procedures as it may deem reasonable and appropriate
with respect to the operation of the Borrower Cash Collateral Account and the
services to be provided by the Administrative Agent under this Agreement not
inconsistent with the terms of this Agreement.
SECTION 6. Conditions Precedent to the Closing Date and to all Credit Events.
The obligation of the Lenders to make each Loan hereunder are each subject, at
the time thereof (except as otherwise hereinafter indicated), to the
satisfaction of each of the following conditions:
6.01 Commencement of the Cases. The Case of the Borrowers shall have
commenced on or before July 15, 2004, and the Closing Date shall be no later
than five (5) days after the Filing Date.
6.02 Entry of Interim Order. The Cases shall have commenced and the
Bankruptcy Court shall have entered the Interim Order, such Interim Order shall
be in full force and effect and shall not have been amended, modified, stayed or
reversed.
6.03 Execution of Agreement. On or prior to the Closing Date, (i)
this Agreement shall have been executed and delivered and as provided in Section
13.10 and (ii) there shall have been delivered to the Administrative Agent for
the account of each Lender the appropriate Notes payable to the account of each
applicable Lender in the amount of their respective Commitments, executed by the
Borrowers, and in the amount, maturity and as otherwise provided herein.
6.04 No Default; Representations and Warranties. On the Closing Date
and at the time of each Credit Event and after giving effect thereto, (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents in effect at such
time shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on and as of the date
of such Credit Event, except to the extent that such
20
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties will be true and correct in all
material respects as of such earlier date.
6.05 Officer's Certificate. On or prior to the Closing Date, the
Administrative Agent shall have received a certificate dated such date signed by
the President or any Vice President of each of the Borrowers stating that all of
the applicable conditions set forth in Section 6.01, Section 6.02, Section 6.04
and Section 6.08 exist or have been satisfied as of such date.
6.06 Corporate Proceedings. (a) On or prior to the Closing Date, the
Administrative Agent shall have received from each Credit Party a certificate,
dated the Closing Date, signed by the President or any Vice-President of each
such Credit Party in the form of Exhibit D with appropriate insertions and
deletions, together with copies of the certificate of incorporation, the by-laws
or other organizational documents of each such Credit Party and the resolutions
of each such Credit Party referred to in such certificate and all of the
foregoing shall be satisfactory to the Administrative Agent.
(b) On or prior to the Closing Date, all corporate and
legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received all information and copies of all
certificates, documents and papers, including good standing certificates and any
other records of corporate proceedings and governmental approvals, if any, which
the Administrative Agent may have reasonably requested in connection therewith,
such documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.
6.07 Material Adverse Effect. Since May 31, 2004, there shall have
occurred no event, and no condition shall exist, that could result in a Material
Adverse Effect.
6.08 Initial Budget. On or prior to the Closing Date, the Borrowers
shall have prepared the initial Budget, and the Lenders and the Administrative
Agent shall have approved the initial Budget in their sold discretion.
6.09 Agency Agreement. On or prior to the Closing Date, the
Administrative Agent shall have received Agency Agreements with respect to each
of the bank accounts listed on Annex I hereto.
6.10 Security Agreement and Pledge Agreement. (a) On the Closing
Date, (i) each of the Borrowers shall have duly authorized, executed and
delivered a Security Agreement in the form of Exhibit E (each such security
agreement, as amended, modified or supplemented from time to time, a "SECURITY
Agreement"), (ii) the
21
Borrowers shall have duly authorized, executed and delivered a Pledge Agreement
in the form of Exhibit F (such pledge agreement, as amended, modified or
supplemented from time to time, the "PLEDGE AGREEMENT"), and (iii) the Borrowers
shall have taken all actions reasonably requested by the Administrative Agent
(including, without limitation, the obtaining of UCC search reports or
equivalent reports and the filing of UCC-1's or UCC-3's, if applicable) in
connection with the perfection and first priority status of the Liens intended
to be created and/or maintained by the Pledge Agreement and each Security
Agreement in the Pledge Agreement Collateral and the Security Agreement
Collateral.
(b) On the Closing Date,
(i) the Lenders shall have received evidence that the
completion of all recordings and filings necessary or, in the reasonable opinion
of the Collateral Agent, desirable to perfect and protect the security interests
purported to be created by the Security Agreement have been taken;
(ii) the Collateral Agent shall have in its possession
all of the Securities which shall be either endorsed in blank (in the case of
promissory notes constituting Securities) or accompanied by executed and undated
stock powers (in the case of Capital Stock constituting Securities);
(iii) the Lenders shall have received evidence that all
other actions necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect and protect the first priority Lien in the Pledge Agreement
Collateral and the Security Agreement Collateral, subject only to Permitted
Encumbrances, have been taken, or arrangements therefor have been made on a
basis satisfactory to the Collateral Agent and shall be in place; and
(iv) the Collateral Agent shall have received a duly
executed Perfection Certificate from each of the Borrowers.
6.11 Insurance Policies. On or prior to the Closing Date, the
Collateral Agent shall have received evidence of insurance complying with the
requirements of Section 8.06 for the business and properties of the Borrowers
and their Subsidiaries, in form and substance satisfactory to the Administrative
Agent and, naming the Collateral Agent as an additional insured and/or loss
payee, as the case may be, and stating that such insurance shall not be
cancelled or revised without 30 days' prior written notice by the insurer to the
Collateral Agent.
6.12 Fees. On or prior to the Closing Date, the Borrowers shall have
paid to the Administrative Agent and the Lenders all Fees and expenses
(including, without limitation, reasonable fees and expenses of counsel) agreed
upon by such parties to be paid on or prior to such date.
22
6.13 Notice of Borrowing; Borrowing Base Certificates. Prior to the
making of each Loan, the Administrative Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.02(a) and a Borrowing Base
Certificate as of a date not earlier than one week prior to the date the Loan is
requested to be made.
6.14 Prepetition Interest, Fees and Expenses. The Administrative
Agent shall have received, for the account of the Prepetition Lender and its
advisors and counsels, and advisors and experts retained by such advisors and
counsels) payment of all fees and expenses incurred and accrued and unpaid
interest due and payable under the Prepetition Credit Agreement to the extent
authorized by the Bankruptcy Court or in any order entered by the Bankruptcy
Court.
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by the Borrowers to the Administrative Agent and
each of the Lenders that all of the applicable conditions specified above exist
as of that time. All of the certificates, legal opinions and other documents and
papers referred to in this Section 6, unless otherwise specified, shall be
delivered to the Administrative Agent at its Notice Office for the account of
each of the Lenders and, except for the Notes, in sufficient counterparts or
copies for each of the Lenders and shall be satisfactory in form and substance
to the Administrative Agent.
SECTION 7. Representations, Warranties and Agreements. In order to induce the
Lenders to enter into this Agreement and to make the Loans, each of the
Borrowers represents and warrants to, and agrees with, the Lenders, that all of
the representations and warranties made by the Lead Borrower under and pursuant
to Article 3 of the Asset Purchase Agreement are true and correct, that all such
representations and warranties shall survive the execution and delivery of this
Agreement and the making of the Loans (with the making of each Credit Event
thereafter being deemed to constitute a representation and warranty that the
matters specified in this Section 7 are true and correct in all material
respects on and as of the date of each such Credit Event unless such
representation and warranty expressly indicates that it is being made as of any
specific date, in which case such representation and warranty shall be true and
correct in all material respects as of such specific date).
SECTION 8. Affirmative Covenants. The Borrowers and each of them covenant and
agree that as of the Closing Date and thereafter for so long as this Agreement
is in effect and until the Total Commitment has terminated, no Notes are
outstanding and the Loans and all interest, Fees and all other Obligations
(other than indemnities described in Section 13.13 hereof which are not then due
and payable) incurred hereunder, are paid in full:
8.01 Information Covenants. The Borrowers will furnish to the
Administrative Agent and each Lender:
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(a) Annual Financial Statements. As soon as practicable,
but in any event no later than September 15, 2004, the consolidated annual
balance sheet of the Borrowers and their Subsidiaries, for the fiscal year ended
December 31, 2003 and the related consolidated statements of income and retained
earnings and of cash flows for such fiscal year, in each case setting forth
comparative consolidated figures for the preceding fiscal year, and in the case
of the consolidated financial statements, examined by Ernst & Young LLP or such
other independent certified public accountants of recognized national standing
acceptable to the Administrative Agent whose opinion shall not be qualified
except with respect to uncertainties inherent in the Case resulting in
substantial doubt about any Borrower's or any Subsidiary's ability to continue
as a going concern, together with a certificate of such accounting firm stating
that in the course of its regular audit of the business of the Borrowers, which
audit was conducted in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any Default or Event of
Default which has occurred and is continuing or, if in the opinion of such
accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(b) Quarterly Financial Statements. As soon as available
and in any event within forty-five (45) days after the close of each of the
first three quarterly accounting periods in the fiscal year of the Borrowers,
the consolidated balance sheet of the Borrowers and their Subsidiaries, as at
the end of such quarterly accounting period and the related consolidated
statements of income and retained earnings and of cash flows for such quarterly
accounting period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly accounting period, and in each case setting forth
comparative consolidated figures for the related periods in the prior fiscal
year, all of which shall have been reviewed by Ernst & Young LLP or such other
independent certified public accountants of recognized national standing
acceptable to the Administrative Agent and shall be certified by the chief
financial officer or controller of the Lead Borrower, subject to changes
resulting from audit and normal year-end audit adjustments.
(c) Monthly Report. As soon as practicable, and in any
event within thirty (30) days after the end of each monthly accounting period of
the fiscal year of the Borrowers, monthly reports in a form reasonably
satisfactory to the Administrative Agent, which shall include the consolidated
balance sheet of the Borrowers and their Subsidiaries, as at the end of such
monthly accounting period, and the related consolidated statements of income and
cash flow for such monthly accounting period, setting forth (i) in the case of
the balance sheet, comparative figures to the balance sheet delivered pursuant
to Section 8.01(a) for the 2003 fiscal year and (ii) in the case of statements
of cash flow, a summary of cash flows for the elapsed portion of the fiscal year
ended with the last day of such monthly accounting period.
(d) Weekly Reports. Before 5:00 p.m. (Cleveland, Ohio
time) or the first Business Day of each week the Lead Borrower shall deliver to
Administrative Agent
24
and each Lender a Borrowing Base Certificate as of the close of business the
last Business Day of the immediately preceding week and a report reflecting (i)
the cash flows of the Borrowers and their Subsidiaries for the immediately
preceding calendar week and cash flow projections for the following consecutive
thirteen calendar weeks, which shall include identification of all variances
from the then current Budget for each such period, (ii) then current accounts
payable agings, including a summary of postpetition accounts payable and (iii)
daily cash receipts forecast for the following two weeks, in all respects in
form and substance satisfactory to the Administrative Agent and the Lenders.
(e) Officer's Certificates. At the time of the delivery
of the financial statements provided for in Section 8.01(a) (b), (c) and (d), a
certificate of the chief financial officer, controller or other Authorized
Officer of the Lead Borrower to the effect that no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying the nature
and extent thereof, which certificate, in the case of the certificate delivered
pursuant to Section 8.01(a) and (b), shall set forth the calculations required
to establish whether the Borrowers and their Subsidiaries were in compliance
with the provisions of Section 9.10 and Sections 9.16 through 9.20.
(f) [Intentionally Omitted]
(g) Notice of Default or Litigation. Promptly, and in
any event within three (3) Business Days after any Borrower obtains knowledge
thereof, notice of (x) the occurrence of any event which constitutes a Default
or an Event of Default, which notice shall specify the nature thereof, the
period of existence thereof and what action the Borrower proposes to take with
respect thereto or (y) the commencement of or any significant development in the
Case or any other litigation or governmental proceeding pending against any
Borrower or any Subsidiary which is reasonably likely to have a Material Adverse
Effect or is reasonably likely to have a material adverse effect on the ability
of the Borrowers or any other Credit Party to perform its obligations hereunder
or under any other Credit Document.
(h) Environmental Matters. Promptly upon, and in any
event within ten (10) Business Days after, an officer of any of the Borrowers or
any of their Subsidiaries obtains knowledge thereof, notice of one or more of
the following environmental matters, unless such environmental matters (i) have
already been disclosed to the Lenders or (ii) could not, individually or when
aggregated with all other such environmental matters, be reasonably expected to
have a Material Adverse Effect:
(i) any pending or threatened Environmental Claim
against any Borrower or any of its Subsidiaries or any Real Property owned or
operated by the Borrower or any of its Subsidiaries;
25
(ii) any condition or occurrence on or arising from any
Real Property owned or operated by any Borrower or any of its Subsidiaries that
(a) results in noncompliance by the Borrower or any of its Subsidiaries with any
applicable Environmental Law or (b) could reasonably be expected to form the
basis of an Environmental Claim against any Borrower or any of its Subsidiaries
or any such Real Property;
(iii) any condition or occurrence on any Real Property
owned or operated by any Borrower or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability by any Borrower
or any of its Subsidiaries of such Real Property under any Environmental Law;
and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by any Borrower or any of its Subsidiaries as
required by any Environmental Law or any governmental or other administrative
agency; provided, that in any event the Borrower shall deliver to each Lender
all notices received by it or any of its Subsidiaries from any government or
governmental agency under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's or such Subsidiary's response thereto. In addition, each Borrower
will provide the Lenders with copies of all material communications with any
government or governmental agency relating to Environmental Laws, all material
communications with any Person (other than its attorneys) relating to any
Environmental Claim of which notice is required to be given pursuant to this
Section 8.01(h), and such detailed reports of any such Environmental Claim as
may reasonably be requested by the Lenders.
(i) Auditors' Reports. Promptly upon receipt thereof, a
copy of each final report or "management letter" submitted to the Borrowers by
their independent accountants in connection with any annual, interim or special
audit made by it of the books of the Borrowers.
(ii) Claims Against Collateral. Immediately upon
becoming aware thereof, notice in writing of any setoff, claims, withholdings or
other defenses to which any of the Collateral, or any of the Lenders' rights
with respect to the Collateral, are subject.
(iii) Other Information. From time to time, such other
information or documents (financial or otherwise) as the Administrative Agent on
its own behalf or on behalf of the Required Lenders may reasonably request from
time to time.
8.02 Retention of Financial Advisors. [reserved]
26
8.03 Communications with Professionals. The Borrowers authorize the
Administrative Agent, each Lender and any of the Administrative Agent's or the
Lenders' respective representatives and counsel to communicate directly with the
Borrowers' professionals and authorizes such professionals to disclose to the
Administrative Agent, each Lender and the Administrative Agent's and the
Lenders' respective representatives and counsel, as the case may be, such
information as may be reasonably requested by such Person with respect to the
business, financial condition and other affairs of the Borrowers or any of their
Subsidiaries; provided that the Borrowers' professionals shall not be required
to disclose privileged or confidential information to the extent that disclosure
cannot be made without compromising such information's privileged or
confidential status.
8.04 Collateral Preservation. The Borrowers shall take all such
further actions as the Administrative Agent may from time to time reasonably
request to preserve, protect, perfect and ensure the priority of the Collateral,
subject to Permitted Liens entitled to priority under applicable law.
8.05 Executory Contracts. Prior to the Borrowers rejecting any
contract or making any motion to reject any contract, the Borrowers shall notify
the Administrative Agent in writing of the Borrowers' reasons why such rejection
(a) will be in the best interests of the Borrowers and (b) will not have a
Material Adverse Effect on the Borrowers and avoid proceeding with such
rejection if such rejection will have a Material Adverse Effect on any of the
Borrowers.
8.06 Maintenance of Property, Insurance. The Borrowers will, and
will cause each of their Subsidiaries to, at all times maintain in full force
and effect insurance in such amounts, covering such risks and liabilities and
with such deductibles or self-insured retentions as are in accordance with
normal industry practice. At any time that insurance at the levels described in
Annex II is not being maintained by the Borrowers and their Subsidiaries, the
Borrowers will notify the Lenders in writing thereof and, if thereafter notified
by the Administrative Agent to do so, the Borrowers will, and will cause each of
their Subsidiaries to, obtain insurance at such levels at least equal to those
set forth in Annex II to the extent then generally available, or otherwise as
are acceptable to the Administrative Agent. The Borrowers will, and will cause
each of their Subsidiaries to, furnish on the Closing Date a summary of the
insurance carried together with certificates of insurance and other evidence of
such insurance, if any, naming the Collateral Agent as an additional insured
and/or loss payee.
8.07 Payment of Taxes. The Borrowers will pay and discharge, and
will cause each of their Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which material penalties attach thereto, and all lawful claims for sums that
have become due and payable which, if unpaid, might become a Lien not otherwise
permitted pursuant to Section 9.03(a) or charge upon any
27
properties of the Borrowers or any of their Subsidiaries, provided,
that none of the Borrowers or any of their Subsidiaries shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves (in the
good faith judgment of the management of the Lead Borrower) with respect thereto
in accordance with GAAP.
8.08 Corporate Franchises. The Borrowers will do, and will cause
each of their Subsidiaries to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its existence, material rights and
authority, provided, that any transaction permitted by Section 9.02 will not
constitute a breach of this Section 8.08.
8.09 Compliance with Statutes, etc. Except as otherwise permitted by
the Bankruptcy Court, the Borrowers will, and will cause each of their
Subsidiaries to, comply with all applicable statutes (including, without
limitation, all applicable Environmental Laws), regulations and orders of, and
all applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property except for such non-compliance which would not have a Material Adverse
Effect or would not have a material adverse effect on the ability of any Credit
Party to perform its obligations under any Credit Document to which it is party.
8.10 ERISA. As soon as possible and, in any event, within ten (10)
days after any Borrower, any Subsidiary of any Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, the
Borrowers will deliver to the Administrative Agent a certificate of the chief
financial officer of the affected Borrower setting forth the full details as to
such occurrence and the action, if any, which such Borrower, a Subsidiary or an
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred;
(except to the extent that the Borrower has previously delivered to the Lenders
a certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor as defined in Section 4001(a)(13) of
ERISA of a Plan subject to the requirements of PBGC Regulation Section 4043.61
(without regard to subparagraph (b)(1) thereof) and an event described in
subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043
is reasonably expected to occur with respect to such Plan within the following
30 days; that an accumulated funding deficiency within the meaning of Section
412 of the Code or Section 302 of ERISA has been incurred or an application may
be or has been made for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code or Section 303 or 304 of
ERISA, with respect to a Plan; that any contribution required to be made with
respect to a Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability; that proceedings may
28
be or have been instituted to terminate a Plan which is subject to Title IV of
ERISA; that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that any Borrower, any Subsidiary
of any Borrower or any ERISA Affiliate will or may incur any material liability
to or on account of the termination of or withdrawal from a Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan
under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i)
or 502(l) of ERISA or with respect to a group health plan (as defined in Section
607(l) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code; or that any Borrower or any Subsidiary of any Borrower may incur any
liability pursuant to any employee welfare benefit plan (as defined in Section
3(l) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any Plan other
than any Plan subject to Title IV of ERISA and/or Section 412 of the Code. The
Borrowers will deliver to the Lenders (i) a complete copy of the annual report
(on Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service and (ii) copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA. In addition to any certificates
or notices delivered to the Lenders pursuant to the first sentence hereof,
copies of annual reports and any records, documents and other information
required to be furnished to the PBGC, and any material notices received by any
Borrower, any Subsidiary of any Borrower or any ERISA Affiliate with respect to
a Plan shall be delivered to the Lenders no later than ten (10) days after the
date such report has been filed with the Internal Revenue Service or such
records, documents and/or information has been furnished to the PBGC or such
notice has been received by any Borrower, the Subsidiary or the ERISA Affiliate,
as applicable.
8.11 Good Repair. The Borrowers will, and will cause each of their
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept, in all
material respects, in good repair, working order and condition, normal wear and
tear excepted, and, subject to Section 9.16, that from time to time there are
made in such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner useful or customary for companies in similar
businesses.
8.12 End of Fiscal Years, Fiscal Quarters. The Borrowers will, for
financial reporting and tax purposes, cause (i) each of their, and each of their
Subsidiaries' fiscal years to end on December 31 of each year and (ii) each of
their, and each of their Subsidiaries' fiscal quarters to end on March 31, June
30, September 30 and December 31 of each year.
29
8.13 Use of Proceeds. All proceeds of the Loans shall be used solely
for the disbursements to be made in accordance with the Budget.
8.14 Cash Management Arrangements; Depository Arrangements. The
Borrowers shall and shall cause each Domestic Subsidiary to:
(a) Maintain in place cash management arrangements in
accordance with the First Day Orders in connection with the Case relating to the
Borrowers' cash management system and in form and substance reasonably
satisfactory to the Administrative Agent. Without limiting the generality of the
foregoing, the parties agree that:
(i) all cash and Cash Equivalents held by the Credit
Parties and all proceeds of receivables and other accounts, chattel paper,
general intangibles, instruments and other payment rights for which any of the
Credit Parties is an obligee shall be deposited into either the Borrower Cash
Collateral Account or any bank accounts of the Credit Parties subject to any of
the Agency Agreements; and
(ii) all cash and Cash Equivalents held by the Credit
Parties and all such proceeds of receivables and other accounts, chattel paper,
general intangibles, instruments and other payment rights shall, on each
Business Day or such other frequency as may be agreed to by the Administrative
Agent, be transferred to the Borrower Cash Collateral Account, to the extent not
already transferred to the Borrower Cash Collateral Account, for application to
the Obligations pursuant to the provisions hereof.
(b) In the event that any of the Credit Parties receives
any cash, checks or other cash proceeds of Collateral, promptly upon receipt
thereof, in the identical form received (except for any endorsements thereon
which may be required by the Administrative Agent), cause such cash, checks and
cash proceeds to be paid directly into the Borrower Cash Collateral Account or
into any agency account subject to an Agency Agreement.
(c) Except to the extent that the Borrowers shall be
required to make payments to the Administrative Agent or any other Person
pursuant to the terms of this Agreement or the other Credit Documents, and
subject to the rights and remedies that may from time to time be available to
the Administrative Agent and the Lenders upon the occurrence of an Event of
Default, the Borrowers may use the proceeds of Borrowings for the disbursements
set forth in the Budget, subject in any case to the terms and conditions of this
Agreement and the other Credit Documents, and no such funds may be applied to
the Prepetition Obligations except as otherwise provided in this Agreement or
any other Credit Document or as permitted by the Bankruptcy Court or in any
order entered by the Bankruptcy Court.
30
8.15 Actions Relating to Asset Sale. The Borrowers will (a) file
with the Bankruptcy Court on or before July 15, 2004, a motion in form and
substance acceptable to the Lenders in their sole discretion, seeking approval
of sale procedures for the sale of substantially all of the assets of the
Borrowers to Presstek or such other party as may submit a higher and better
offer, (b) obtain an Order approving sale procedures on or before August 27,
2004, which provides for the following terms and conditions in connection with
the sale: (i) a break-up fee of $1,200,000.00 and expense reimbursement not to
exceed $500,000.00, payable at closing in the event the Borrowers sell all or
any substantial portion of their assets to a competing bidder, (ii) a
requirement that any competing bid be on terms substantially identical to, and
no less favorable than, those contained in Presstek's asset purchase agreement,
including that such bid be an all cash bid, (iii) a requirement that any initial
competing bid for the purchased assets be for not less than $2,100,000.00 above
the purchase price offered by Presstek, (iv) a requirement that any subsequent
competing bid be for not less than $200,000.00 above the prior bid, and (v)
providing that any competing bid that is subject to a financing contingency will
not be considered; and (c) obtain an Order, on or before September 30, 2004,
that authorizes the Borrowers to sell substantially all of its assets to
Presstek and includes the following provisions: (i) the assets being transferred
are free and clear of any and all liens, claims, encumbrances and liabilities
whatsoever (excluding post-closing obligations under any expressly assumed
leases and executory contracts), including, without limitation, claims with
respect to tax, labor and environmental matters, (ii) Presstek is not a
successor to the Lead Borrower, and (iii) Presstek has acted in "good faith"
within the meaning of that term's usage in Section 363(m) of the Bankruptcy
Code.
8.16 Additional Security; Further Assurances.
(a) The Borrowers will, and will cause each of their
Subsidiaries to, grant to the Collateral Agent security interests and mortgages
(each an "ADDITIONAL MORTGAGE") in such owned Real Property of the Borrowers and
their Subsidiaries acquired after the Closing Date as may be requested from time
to time by the Administrative Agent (each such Real Property, an "ADDITIONAL
MORTGAGED PROPERTY"). Such Additional Mortgages shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent and shall constitute valid and enforceable Liens superior
to and prior to the rights of all third Persons and subject to no other Liens
except as are permitted by Section 9.03. The Additional Mortgages or instruments
related thereto shall be duly recorded or filed in such manner and in such
places as are required by law to establish, perfect, preserve and protect the
Liens in favor of the Collateral Agent required to be granted pursuant to the
Additional Mortgages and all taxes, fees and other charges payable in connection
therewith shall have been paid in full by the Borrowers.
(b) The Borrowers will, and will cause each of their
Subsidiaries to, at the expense of the Borrowers, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the Collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, the
Borrowers will cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be requested by the
Administrative Agent to assure themselves that this Section 8.16 has been
complied with.
(c) The Borrowers agree that each action required by
clauses (a) and (b) above in this Section 8.16 shall be completed as soon as
possible, but in no event later than 60 days after such action is requested to
be taken by the Administrative Agent or the Required Lenders, provided that in
no event shall the Borrowers be required to take any action, other than using
its reasonable commercial efforts without any material expenditure, to obtain
consents from third parties with respect to its compliance with such clauses (b)
and (c).
(d) In the event that the Administrative Agent or the
Required Lenders at any time after the Closing Date determine in its or their
good faith discretion that real estate appraisals satisfying the requirements of
FIRREA (any such appraisal a "REQUIRED APPRAISAL") are or were required to be
obtained, or should be obtained, in each case, in accordance with FIRREA, in
connection with the Mortgaged Properties, then, within 120 days after receiving
written notice thereof from the Administrative Agent or the Required Lenders, as
the case may be, such Required Appraisal shall be delivered, at the expense of
the Borrowers, to the Administrative Agent which Required Appraisal, and the
respective appraiser, shall be satisfactory to the Administrative Agent.
SECTION 9. Negative Covenants. The Borrowers covenant and agree that as of the
Closing Date and thereafter for so long as this Agreement is in effect and until
the Total Commitment has terminated, no Notes are outstanding and the Loans and
all interest, Fees and all other Obligations (other than indemnities described
in Section 13.13 which are not then due and payable) incurred hereunder, are
paid in full:
9.01 Changes in Business. The Borrowers will not, and will not
permit any of their Subsidiaries to, materially alter the character of the
business of the Borrowers and their Subsidiaries from that conducted on the
Closing Date; provided, that this Section 9.01 shall not restrict the making of
any investment expressly permitted by Section 9.08 or the consummation of any
transaction expressly permitted by Section 9.02.
9.02 Consolidation, Merger, Sale or Purchase of Assets, etc. Except
as otherwise provided in this Agreement or the Orders, or as required by Section
8.15 of this Agreement, the Borrowers will not, and will not permit any of their
Subsidiaries to, wind up, liquidate or dissolve its affairs, or enter into any
transaction of merger or consolidation, or sell or otherwise dispose of all or
any part of its property or assets (other than inventory or obsolete equipment
or excess equipment no longer needed in the
32
conduct of the business in the ordinary course of business), including pursuant
to any sale/leaseback transaction, or purchase, lease or otherwise acquire all
or any part of the property or assets of any Person (other than leases,
purchases or other acquisitions of inventory, materials and equipment in the
ordinary course of business), or agree to do any of the foregoing at any future
time, except that the following shall be permitted:
(a) the Borrowers and their Subsidiaries may lease (as
lessee) real or personal property in the ordinary course of business (so long as
such lease does not create a Capitalized Lease Obligation);
(b) the Borrowers and their Subsidiaries may license or
sublicense software, customer lists, trademarks, service marks, patents, trade
names and copyrights and other intellectual property in the ordinary course of
business, provided, that such licenses or sublicenses shall not materially
interfere with the business of the Borrowers or any such Subsidiary;
(c) each of the Borrowers and its Subsidiaries may make
sales or transfers of inventory in the ordinary course of business and
consistent with past practices (including without limitation sales or transfers
of inventory by the Borrower to its Subsidiaries).
9.03 Liens. The Borrowers will not, and will not permit any of their
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrowers or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to any
of the Borrowers or any of their Subsidiaries) or assign any right to receive
income, or file or permit the filing of any financing statement under the UCC or
any other similar notice of Lien under any similar recording or notice statute;
provided, that the provisions of this Section 9.03 shall not prevent the
creation, incurrence, assumption or existence of the following (with such Liens
described below being herein referred to as "PERMITTED LIENS"):
(a) inchoate Liens for taxes, assessments or
governmental charges or rules not yet due or Liens for taxes, assessments or
governmental charges or rules being contested in good faith and by appropriate
proceedings for which adequate reserves (in the good faith judgment of the
management of the Lead Borrower) have been established;
(b) Liens in respect of property or assets of the
Borrowers or any of their Subsidiaries imposed by law which were incurred in the
ordinary course of business, such as carriers', warehousemen's and mechanics'
Liens, statutory landlord's Liens, and other similar Liens arising in the
ordinary course of business, and (x) which do not in the aggregate materially
detract from the value of such property or assets or materially impair
33
the use thereof in the operation of the business of any of the Borrowers or any
of their Subsidiaries or (y) which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement, the
Orders and the other Credit Documents;
(d) Liens arising from judgments, decrees or attachments
(or securing of appeal bonds with respect thereto) in circumstances not
constituting an Event of Default under Section 10, so long as no cash or
property (other than proceeds of insurance payable by reason of such judgments,
decrees or attachments) is deposited or delivered to secure any respective
judgment or award, or any appeal bond in respect thereof, the fair market value
of which exceeds $25,000;
(e) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
bonds (other than appeal bonds), bids, leases, government contracts, obligations
to utilities, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money);
(f) easements, rights-of-way, restrictions, minor
defects or irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the business of
the Borrowers or any of their Subsidiaries;
(g) any interest or title of a lessor under any lease
permitted by this Agreement; and
(h) Permitted Encumbrances.
Nothing contained in this Section 9.03 subordinates the Liens in favor of the
Administrative Agent under the Security Documents to any Permitted Lien that is
not valid, perfected and entitled to priority over the Administrative Agent's
Liens under applicable law or that is avoidable under the Bankruptcy Code.
9.04 Indebtedness. The Borrowers will not, and will not permit any
of their Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents; and
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(b) Existing Indebtedness, without giving effect to any
subsequent extension, renewal or refinancing thereof.
9.05 Severance Payments. The Borrower shall make no Severance
Payments except as otherwise consented to by the Administrative Agent.
9.06 [Reserved].
9.07 Restrictions on Negative Pledges and Upstream Limitations. The
Borrowers will not, and will not permit any of their Subsidiaries to (a) enter
into or permit to exist any arrangement or agreement (excluding this Agreement
and the other Credit Documents) which directly or indirectly prohibits the
Borrowers or any of their Subsidiaries from creating, assuming or incurring any
Lien upon its or their properties, revenues or assets or those of any of their
Subsidiaries whether now owned or hereafter acquired, or (b) enter into any
agreement, contract or arrangement (excluding this Agreement and the other
Credit Documents) restricting the ability of any Borrower or any Subsidiary of
any of the Borrowers to pay or make dividends or distributions in cash or kind
to any other Borrower, to make loans, advances or other payments of whatsoever
nature to any other Borrower, or to make transfers or distributions of all or
any part of its assets to any Borrower.
9.08 Advances, Investments and Loans. The Borrowers will not, and
will not permit any of their Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, except:
(a) subject to the terms of this Agreement, the
Borrowers and their Subsidiaries may acquire and hold receivables owing to them,
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
(b) the Borrowers and their Subsidiaries may acquire and
own investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business; and
(c) advances limited to the amounts of fees required to
be paid to the United States Trustee by Multigraphics, LLC in the Cases when due
together with other required administrative expenses of Multigraphics, LLC, in
no event including any professional fees or reimbursements; provided, that the
cumulative total of all advances permitted by this subsection (c) shall not
exceed $25,000.00.
9.09 Prepayments of Indebtedness, Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements, etc. Except as required or
35
expressly permitted by this Agreement, the Borrowers will not, and will not
permit any of their Subsidiaries to, (x) make (or give any notice in respect
thereof) any voluntary or optional payment or prepayment or redemption or
acquisition for value of (including, without limitation, by way of depositing
with the trustee with respect thereto money or securities before due for the
purpose of paying when due) or exchange or refinancing of any Prepetition
Obligations, (y) amend, modify or change in any manner any agreements relating
to any Prepetition Obligations, or (z) amend, modify or change in any manner
materially adverse to the interests of the Lenders, the Certificate of
Incorporation (including, without limitation, by the filing of any additional
certificate of designation) or By-Laws of any of the Borrowers or any of their
Subsidiaries, the terms of any of its Capital Stock, or enter into any new
agreement in any manner materially adverse to the interests of the Lenders with
respect to the Capital Stock of any of the Borrowers or any of their
Subsidiaries.
9.10 Dividends, etc. The Borrowers will not, and will not permit any
of their Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in Capital Stock of such Person) or return any capital to its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its Capital Stock now or hereafter outstanding (or any warrants for
or options or stock appreciation rights in respect of any of such shares), or
set aside any funds for any of the foregoing purposes, or permit any of their
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the Capital Stock of any of the Borrowers or any other Subsidiary,
as the case may be, now or hereafter outstanding (or any options or warrants or
stock appreciation rights issued by such Person with respect to its Capital
Stock) (all of the foregoing "DIVIDENDS"), except that any Subsidiary of any
Borrower may pay cash Dividends to the Borrower.
9.11 Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
transactions after the Closing Date whether or not in the ordinary course of
business, with any Affiliate other than on terms and conditions substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's length transaction
with a Person other than an Affiliate; provided, that the foregoing restrictions
shall not apply to (i) Dividends permitted under Section 9.10 and (ii)
transactions between Borrowers and their Subsidiaries to the extent otherwise
expressly permitted under this Agreement.
9.12 Limitation on Creation of Subsidiaries. The Borrowers shall
not, and shall not permit any of their Subsidiaries to, establish, create or
acquire any additional Subsidiaries.
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9.13 Limitation on Issuance of Stock. The Borrowers will not issue
any shares of Capital Stock, and will not permit any of their Subsidiaries
directly or indirectly to issue, sell, assign, pledge or otherwise encumber or
dispose of any shares of its Capital Stock or other securities (or warrants,
rights or options to acquire shares or other equity securities) of such
Subsidiary, except to the extent required by applicable law.
9.14 Limitation on Creation of Bank Accounts. The Borrowers will
not, and will not permit any of their Domestic Subsidiaries to, (a) establish
any bank accounts other than those listed on Annex I without the Administrative
Agent's prior written consent, (b) violate directly or indirectly any Agency
Account Agreement with respect to such account, or (c) deposit into any of the
payroll accounts listed on Annex I any amounts in excess of amounts necessary to
pay current payroll and related tax obligations from such accounts. Upon the
written consent of the Administrative Agent to the establishment of an
additional bank account pursuant to clause (a) of this Section 9.14, Annex I
hereto will be amended to reflect the addition of such bank account.
9.15 Bankruptcy Cases. The Borrowers will not (a) seek, consent or
suffer to exist any modification, stay, vacation or amendment to the Orders,
unless the Lenders have consented to such modification, stay, vacation or
amendment in writing, (b) seek or consent to nor shall the Bankruptcy Court have
permitted a priority claim for any administrative expense or unsecured claim
against any of the Borrowers (now existing or hereafter arising of any kind or
nature whatsoever, including without limitation any administrative expense of
the kind specified in Sections 503(b), 506(c), 507(b), 1113 and 1114 of the
Bankruptcy Code) equal or superior to the priority claim of the Administrative
Agent and the Lenders in respect of the Obligations, except for the Carve Out,
or (c) seek, consent or suffer to exist any Lien on any Collateral, having a
priority equal or superior to the Lien in favor of the Administrative Agent in
respect of the Obligations, except for the Carve-Out and Permitted Liens.
SECTION 10. Events of Default. Upon the occurrence of any of the following
specified events (each an "EVENT OF DEFAULT"):
10.01 Payments. The Borrowers shall default in the payment when due
of any principal of or interest on the Loans, any Fees or any other amounts
owing hereunder or under any other Credit Document; or
10.02 Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
10.03 Covenants. Any of the Borrower or any of their Subsidiaries
shall (a) default in the due performance or observance by it of any term,
covenant or agreement contained in Sections 8 or 9 or (b) default in the due
performance or observance by it of
37
any other term, covenant or agreement contained in this Agreement or any other
Credit Document and such default shall continue unremedied for a period of at
least 10 days; or
10.04 Failure to Pay Post-Filing Date Indebtedness, Etc. The
Borrowers shall (a) fail to pay any Indebtedness arising after the Filing Date
in an aggregate amount at any time in excess of $50,000 when and as the same
shall become due and payable (giving effect to any applicable grace period under
the instrument evidencing such Indebtedness) (except as may be permitted by the
Bankruptcy Code) or (b) fail to comply with any order of the Bankruptcy Court in
any material respect; or
10.05 Payment of Prepetition Indebtedness. The Borrowers shall pay
any Prepetition Obligations; provided, however, the Borrower may pay (a) any
amounts as provided in the first day orders, which orders shall be customary
first-day orders for debtors in Chapter 11 of the Bankruptcy Code (the "FIRST
DAY ORDERS"), and in form and substance satisfactory to the Administrative
Agent, (b) Postpetition Interest as provided in Section 1.07 herein and (c) any
other amounts pursuant to other orders of the Bankruptcy Court acceptable to the
Administrative Agent; or
10.06 Default Under Other Agreements. (a) The Borrowers or any of
their Subsidiaries shall default in the observance or performance of any
agreement or condition relating to any postpetition Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, any such Indebtedness to become due prior to its stated maturity or (b)
any such postpetition Indebtedness of the Borrowers or any of their Subsidiaries
shall be declared to be due and payable, or required to be prepaid other than by
a regularly scheduled required prepayment, prior to the stated maturity thereof;
or
10.07 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, the Borrowers or any
38
Subsidiary of any of the Borrowers or any ERISA Affiliate has incurred or is
likely to incur any liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or on account of a group health
plan (as defined in Section 607(l) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code, or any of the Borrowers or any of their
Subsidiaries has incurred or is likely to incur material liabilities pursuant to
one or more employee welfare benefit plans (as defined in Section 3(l) of ERISA)
that provide benefits to retired employees or other former employees (other than
as required by Section 601 of ERISA) or Plans or Foreign Pension Plans; (b)
there shall result from any such event or events the imposition of a lien or the
granting of a security interest, and (c) such lien or security interest,
individually, and/or in the aggregate, in the reasonable opinion of the Required
Lenders, has had, or could reasonably be expected to have, a material adverse
effect upon the business, operations, condition (financial or otherwise) or
prospects of the Borrowers or any of their Subsidiaries; or
10.08 Continued Operation of Business. The Borrowers shall be
enjoined from conducting any part of their business as a debtor in possession,
there shall occur any act of terrorism or other "force majeure" event disrupting
any material portion of the businesses of the Borrowers and their Subsidiaries,
or there shall occur any loss or change in any license or permit of any of the
Borrowers or any of their Subsidiaries, or any material damage to, or loss of
any Borrower's assets, which in each such case referred to this Section 10.08
shall continue for a period of five (5) or more days and could reasonably be
expected to have a Material Adverse Effect; or
10.09 Credit Documents. If any of the Credit Documents shall be
cancelled, terminated, revoked or rescinded; or the Administrative Agent's Lien
on any of the Collateral shall cease to be perfected or have the priority
contemplated by this Agreement or the Orders, or any suit or action at law, or
in equity or other legal proceeding to cancel, revoke, rescind or otherwise
challenge any of the Credit Documents or the Liens securing the Obligations
shall be commenced by any of the Borrower or any of their Subsidiaries; or any
court or any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order, decree
or ruling to the effect that, any one or more of the Credit Documents is
illegal, invalid or unenforceable in accordance with the terms thereof; or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Final Judgment. There shall remain undischarged for more than
thirty (30) days any final judgment arising after the Filing Date or execution
action against any of the Borrowers or relief from the automatic stay of Section
362(a) of the Bankruptcy Code shall be granted to any creditor or creditors of
any of the Borrowers with respect to assets having an aggregate value in excess
of $50,000 or where the deprivation of any of the Borrowers or any Subsidiary of
such assets could reasonably be expected to have a Material Adverse Effect; or
39
10.12 Relief from Automatic Stay. Any of the Borrowers shall default
in the payment when due of any principal of or interest on any post-Filing Date
Indebtedness, or any pre-Filing Date Indebtedness if, by order of the Bankruptcy
Court issued with respect to such Indebtedness, the default thereunder entitles
the holder thereof to relief from the automatic stay under Section 362 of the
Bankruptcy Code, in excess of $50,000 in the aggregate of such post-Filing Date
or pre-Filing Date Indebtedness; or
10.13 Modification of Any Order. The Bankruptcy Court shall enter
any order (i) amending, supplementing, altering, staying, vacating, rescinding
or otherwise modifying any Order, or any other order with respect to the Case,
affecting adversely in any respect this Agreement, (ii) appointing a chapter 11
trustee or an examiner with enlarged powers relating to the operation of the
business (powers beyond those set forth in Section 1106(a)(3) and (4) of the
Bankruptcy Code) under Section 1106(b) of the Bankruptcy Code in any of the
Cases, (iii) dismissing any of the Cases or converting any of the Cases to a
Chapter 7 case, or (iv) granting relief from the automatic stay to any creditor
holding or asserting a Lien or reclamation claim on the assets of any of the
Borrowers with a value in excess of $50,000; or
10.14 Final Order. The Bankruptcy Court shall fail to enter the
Final Order by July 30, 2004; or
10.15 Event of Default under Orders. The occurrence of an event of
default or contempt under either of the Orders; or
10.16 Application for Superpriority Claim. An application shall be
filed by any of the Borrowers for the approval of any other Superpriority Claim
in any of the Cases which is pari passu with or senior to the claims of the
Administrative Agent and the Lenders against the Borrowers unless after giving
effect to the transactions contemplated by such application, all Obligations
(whether contingent or otherwise) shall be paid in full in cash and the
Commitments shall be terminated), or the Bankruptcy Court shall determine that
any such Superpriority Claim has arisen; or
10.17 Motions with Bankruptcy Court. Any of the Borrowers shall file
a motion in any of the Cases (i) except for the payment of payroll and
payroll-related expenses and as otherwise provided in the Orders and the First
Day Orders, to use cash collateral of the Lenders or of the Prepetition Lenders
under Section 363(c) of the Bankruptcy Code without the Lenders' consent, (ii)
to recover from any portions of the Collateral any costs or expenses of
preserving or disposing of such Collateral under Section 506(c) of the
Bankruptcy Code, to cut off rights in the Collateral under Section 552(b) of the
Bankruptcy Code, or (iii) to take any other action or actions adverse to the
Lenders or the Prepetition Lenders or their rights and remedies hereunder or
under any of the other Credit Documents or any of the documents evidencing or
creating any of the Prepetition Obligations or the Lenders' or the Prepetition
Lenders' interest in any of the Collateral; or
40
10.18 Suit against Lenders, etc. A suit or action against any of the
Lenders, the Administrative Agent, the Prepetition Administrative Agent, or the
Prepetition Lenders shall be commenced by any of the Borrowers or any of their
Subsidiaries, any federal, state environmental protection or health and safety
agency or any official committee in the Case, which suit or action asserts any
claim or legal or equitable remedy contemplating subordination of any claim or
Lien of the Lenders, the Administrative Agent, the Prepetition Lenders, or the
Prepetition Administrative Agent, and shall remain undismissed or unstayed for
fifteen (15) days after its commencement without any preliminary relief of the
nature sought having been granted; and, with respect to any suit or action by
any such federal or state agency or official committee, a preliminary order for
relief or judgment or decree shall have been entered in such suit or action
against the Lenders, the Administrative Agent, the Prepetition Administrative
Agent, or the Prepetition Lenders and, in the case of a preliminary order, such
preliminary order has not been stayed within ten (10) days after its entry; or
10.19 Reorganization Plan or Disclosure Statement. Without the prior
written consent of the Administrative Agent, a Reorganization Plan or a related
disclosure statement or any draft of either thereof is distributed by or on
behalf of the Borrowers to any Person and such Reorganization Plan or disclosure
statement does not provide for the Payment In Full upon the effectiveness of
such Plan of Reorganization.
10.20 Remedies. If any such event, and at any time thereafter, if
any Event of Default shall occur and then be continuing, the Administrative
Agent may, and shall upon the written instruction of Required Lenders (which for
purposes of such instruction shall include the Administrative Agent in its
capacity as a Lender), by written notice to the Borrowers, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent or any Lender to enforce its claims against the Borrowers, except as
otherwise specifically provided for in this Agreement: (i) declare the Total
Commitments terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and all Obligations owing
hereunder and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrowers; (iii) subject to the notice
provisions of the following paragraph, enforce, as Collateral Agent (or direct
the Collateral Agent to enforce), any or all of the Liens and security interests
created pursuant to the Security Documents; and (iv) subject to the notice
provisions of the following paragraph, apply any cash collateral held pursuant
to this Agreement to repay the Obligations.
In addition to and not in derogation of the above paragraph, upon the occurrence
of an Event of Default, the Administrative Agent shall provide the Borrowers,
the United States Trustee for the District of Delaware and any Statutory
Committee with five (5) days' prior notice of the exercise of remedies under
this section and under the Security
41
Documents, which such notice will specify the Event of Default and the basis
therefor and will be given by the Administrative Agent via facsimile. During
such notice period, the Borrowers shall have the right to seek an emergency
hearing before the Bankruptcy Court for the sole purpose of contesting whether
an Event of Default has occurred; provided, that the Credit Parties shall have
no right to use or seek to use the cash Collateral during such notice period.
Unless during such notice period the Borrowers obtain an order of the Bankruptcy
Court to the effect that an Event of Default has not occurred, upon the
expiration of such notice period, the Agents and the Lenders shall have relief
from the automatic stay without further notice or Court order, and the
Collateral Agent may foreclose on all or any portion of the Collateral or
otherwise exercise remedies against the Collateral permitted by the Security
Documents and other nonbankruptcy law, including, without limitation, the
exercise of rights of setoff, the collection of accounts receivable and
application of the proceeds thereof to the Obligations, and occupation of the
premises of the Borrowers to sell the Collateral, and any right of the Borrowers
to use cash collateral shall cease.
In addition, at the expiration of any five day notice period referred to above,
in case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Lenders shall have accelerated the maturity
of the Loans pursuant to item (ii) above, each Lender, if owed any amount with
respect to the Loans or other Obligations, may, and the Administrative Agent
shall if directed by the Required Lenders (which for purposes of such direction
shall include the Administrative Agent in its capacity as a Lender), and may in
its sole discretion, on behalf of the Lenders, proceed to protect and enforce
its rights by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement and the other Credit Documents or any instrument pursuant to
which the Obligations to such Lender are evidenced, including as permitted by
applicable law the obtaining of the ex parte appointment of a receiver, and, if
such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of such
Lender. No remedy herein conferred upon any Lender or the Agents is intended to
be exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision of
law.
SECTION 11. Definitions. As used herein, the following terms shall have the
meanings herein specified unless the context otherwise requires (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"A.B. DICK ACCUMULATED DEPRECIATION INVENTORY" means Inventory of
the Lead Borrower that is the subject of an excess inventory reserve, obsolete
inventory reserve or accumulated depreciation reserve.
"A.B. DICK ELIGIBLE ACCOUNTS" means Eligible Accounts of the Lead
Borrower.
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"A.B. DICK ELIGIBLE INVENTORY" means Eligible Inventory owned by the
Lead Borrower.
"ACCOUNTS" means and includes "accounts" as defined in the UCC.
"ACCOUNT CREDITOR" means any Person to whom an Account Debtor is or
becomes obligated under, with respect to, or on account of an Account.
"ACCOUNT DEBTOR" means any Person who is or becomes obligated to an
Account Creditor under, with respect to, or on account of an Account.
"ADDITIONAL MORTGAGE" shall have the meaning provided in Section
8.16(a).
"ADDITIONAL MORTGAGED PROPERTY" shall have the meaning provided in
Section 8.16(a).
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 12.09.
"AFFILIATE" SHALL mean, with respect to any Person, any other Person
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote five
percent (5%) or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"AGENCY AGREEMENT" means an account control and agency agreement
between a banking institution and the Administrative Agent with respect to an
account of any of the Borrowers or any of their Subsidiaries held at such
banking institution, providing in part for the holding of such account by such
banking institution on behalf of the Administrative Agent for the benefit of the
Lenders, and otherwise in form and substance satisfactory to the Administrative
Agent.
"AGENTS" shall mean, collectively, the Administrative Agent and the
Collateral Agent.
"AGREEMENT" shall mean this debtor in possession revolving credit
agreement, as the same may be from time to time modified, amended and/or
supplemented.
"APPROVED BANK" shall have the meaning provided in the definition of
Cash Equivalents.
43
"APPROVED COMPANY" shall have the meaning provided in the definition
of Cash Equivalents.
"ASSET PURCHASE AGREEMENT" means that certain Asset Purchase
Agreement dated as of July 13, 2004 by and among Presstek, Silver Acquisitions
Corp., as Purchaser, Paragon, and Lead Borrower and A.B. Dick Company of Canada,
Ltd., as Sellers, providing, INTER ALIA, on and subject to the terms therein set
forth, for the sale of certain assets of the Sellers to the Purchaser.
"ASSET SALE" shall mean the sale, transfer or other disposition, in
any one or series of transactions, by any of the Borrowers or any Subsidiary of
any of the Borrowers to any Person other than a Borrower of any asset of any
Borrower or such Subsidiary (other than sales, transfers or other dispositions
in the ordinary course of business of inventory and/or obsolete or excess
equipment pursuant to Section 9.02).
"ASSIGNEE" shall have meaning provided in Section 13.04(c).
"ASSIGNMENT AGREEMENT" shall have the meaning provided in Section
13.04(c).
"AUTHORIZED OFFICER" shall mean any senior officer of each Borrower
designated as such in writing to the Administrative Agent by such Borrower in
each case to the extent acceptable to the Administrative Agent.
"AVOIDANCE ACTIONS" means avoidance actions of any of the Borrowers
under Chapter 5 and/or Section 724(a) of the Bankruptcy Code (or proceeds
thereof).
"AVOIDANCE CLAIMS" means any claim based on or arising under
Sections 544, 547, 548 and 550 of the Bankruptcy Code.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Northern District of Illinois.
"BORROWER CASH COLLATERAL ACCOUNT" means that certain commercial
deposit account, Account No. 359681122545 at KeyBank National Association, in
the name of the Administrative Agent, for the benefit of the Lenders.
"BORROWERS" shall have the meaning provided in the recitals hereto.
"BORROWING" shall mean the disbursement of a Loan to the Borrowers
pursuant to Section 1.01.
"BORROWING BASE" means, at any date of determination, an amount not
in excess of the difference of the following:
44
(a) the sum of:
(i) eighty percent (80%) of the amount due
and owing on the A. B. Dick Eligible
Accounts other than Eligible Accounts
comprised of Service Related Accounts; plus
(ii) fifty percent (50%) of the amount due
and owing on the A. B. Dick Eligible
Accounts consisting of Eligible Accounts
comprised of Service Related Accounts; plus
(iii) the lesser of:
(x) Fifteen Million Dollars
($15,000,000) or
(y) sixty percent (60%) of the
cost or market value (whichever
is lower) of the A. B. Dick
Eligible Inventory; plus
(iv) sixty percent (60%) of the cost (net
of reserves and depreciation) of the A. B.
Dick's House Demo Inventory; plus
(v) the lesser of:
(x) Fifty Thousand Dollars
($50,000) or
(y) ten percent (10%) of the
cost (net of reserves and
depreciation) of the A. B.
Dick's Field Demo Inventory ;
minus
-----
(b) the Reserve Amount.
"BORROWING BASE CERTIFICATE" means a certificate reflecting the
calculation of the Borrowing Base, substantially in the form attached hereto as
Exhibit G (each a "Borrowing Base Certificate") and satisfactory in substance to
the Administrative Agent.
"BUDGET" shall mean a thirteen (13) week Budget of the operating
receipts and disbursements for the Borrowers, a schedule of the dates and
amounts of Loans to be requested and outstanding, on a week-by-week basis,
substantially in the form of Annex III and in substance satisfactory to the
Administrative Agent and each of the Lenders, including as such Budget may be
amended or revised from time to time with the agreement of the Lenders and the
Administrative Agent, in their respective sole discretion.
"BUSINESS DAY" shall mean any day excluding Saturday, Sunday and any
day which shall be in the City of Cleveland, Ohio a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close.
45
"CAPITAL LEASE" as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" shall mean, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents (however
designated) of such Person's capital stock, partnership interests, membership
interests or other equivalent interests and any rights (other than debt
securities convertible into or exchangeable for capital stock), warrants or
options exchangeable for or convertible into such capital stock or other equity
interests.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"CARVE OUT" shall mean, at any time, an amount equal to the sum of
then unpaid (a) allowed administrative expenses pursuant to 28 U.S.C. Section
1930(a)(6), plus (b) allowed fees and expenses incurred by the professionals
retained by the Borrowers and any Statutory Committee pursuant to Sections 327
and 1103 of the Bankruptcy Code (excluding, however, fees, costs and expenses of
third-party professionals employed by the members of any such Statutory
Committee. For purposes of clause (b) above, the Carve Out shall be limited to
accrued and unpaid professional fees and expenses incurred prior to the
Termination Date plus $100,000. For purposes hereof, "Termination Date" shall
mean the earliest of (a) the Maturity Date, and (b) the date of exercise of
remedies by the Agents hereunder or under the Security Documents.
"CASE" shall mean, collectively, the Debtors' reorganization cases
under Chapter 11 of the Bankruptcy Code (Chapter 11 Case Nos.
_____________________________) pending in the United States Bankruptcy Court for
the District of Delaware.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) Dollars denominated time
deposits, certificates of deposit and bankers' acceptances of KeyBank National
Association, any domestic commercial bank of recognized standing having capital
and surplus in excess of $500,000,000 or any bank (or the parent company of such
bank) whose short-term commercial paper rating from Standard & Poor's Ratings
Services ("S&P") is at least A-1 or the equivalent thereof or from Xxxxx'x
Investors Service, Inc. ("XXXXX'X") is at least P-1 or the equivalent thereof
(any such bank, an "APPROVED BANK"), in each case with maturities of not more
than six months from the date of acquisition, (iii) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above,
46
(iv) commercial paper issued by any Approved Bank or by the parent company of
any Approved Bank and commercial paper issued by, or guaranteed by, any
industrial or financial company with a short-term commercial paper rating of at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's (any such company, an "APPROVED COMPANY"), or guaranteed by
any industrial company with a long term unsecured debt rating of at least A or
A2, or the equivalent of each thereof, from S&P or Moody's, as the case may be,
and in each case maturing within six months after the date of acquisition and
(v) investments in money market funds substantially all of whose assets are
comprised of securities of the type described in clauses (i) through (iv) above.
"CASH PROCEEDS" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by any of the Borrowers and/or any of their
Subsidiaries from such Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.
"CHANGE OF CONTROL" shall mean (a) the Permitted Holders cease to be
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act), directly or indirectly, of a majority in the aggregate of the total voting
power of the Voting Stock of Paragon, whether as a result of the issuance of
securities of Paragon, any merger, consolidation, liquidation or dissolution of
Paragon, any direct or indirect transfer of securities or otherwise (for
purposes of this clause (a) and clause (b) below, the Permitted Holders shall be
deemed to beneficially own any Voting Stock of a corporation (the "specified
corporation") held by any other corporation (the "parent corporation") so long
as the Permitted Holders beneficially own (as so defined), directly or
indirectly (through Wholly-Owned Subsidiaries that are not operating
businesses), in the aggregate a majority of the voting power of the Voting Stock
of the parent corporation) or (b) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in clause (a) above, except that
a person shall be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 30% of the total voting power of the Voting Stock of Paragon; provided,
that the Permitted Holders "beneficially own" (as defined in clause (a) above),
directly or indirectly, in the aggregate a lesser percentage of the total voting
power of the Voting Stock of Paragon than such other person and do not have the
right or ability by voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors of Paragon (for the purposes
of this clause (b) such other person shall be deemed to beneficially own any
Voting Stock of a specified corporation held by a parent corporation, if such
other person "beneficially owns" (as defined in this clause
47
(b)), directly or indirectly, more than 30% of the voting power of the Voting
Stock of such parent corporation and the Permitted Holders "beneficially own"
(as defined in clause (a) above), directly or indirectly, in the aggregate a
lesser percentage of the voting power of the Voting Stock of such parent
corporation and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of such parent corporation), or (c) the Lead Borrower shall cease to
be a wholly-owned Subsidiary of Paragon.
"CHATTEL PAPER" means "chattel paper" as defined in the UCC.
"CLOSING DATE" shall have the meaning provided in Section 13.10.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"COLLATERAL" shall mean all of the "Collateral" as defined in each
of the Security Documents.
"COLLATERAL AGENT" shall mean the Administrative Agent acting as
collateral agent for the Lenders pursuant to the Security Documents.
"COLLECTIONS AND REMITTANCES" shall mean all payments received at
any time by the Administrative Agent or the Collateral Agent in respect of
Accounts of the Borrowers or other proceeds of any Collateral, and shall include
all payment orders, checks and other instruments by which any such payments are
to be made.
"COMMITMENTS" shall mean the Tranche A Commitment, the Tranche B
Commitment and the Tranche C Commitment, in each case as may be reduced from
time to time pursuant to the terms hereof.
"COMMITMENT Commission" shall have the meaning provided in Section
3.01(a).
"COMMITMENT PERCENTAGE" shall mean, with respect to the Tranche A
Commitment, 100% for Presstek and 0% for KeyBank, with respect to the Tranche B
Commitment, 100% for Presstek and 0% for KeyBank and, with respect to the
Tranche C Commitment, 100% for KeyBank and 0% for Presstek.
"CREDIT DOCUMENTS" means, collectively, this Agreement, the Notes,
each Security Document and all other agreements, instruments and documents
executed in connection therewith, in each case as the same may at any time be
amended, supplemented, restated or otherwise modified and in effect.
"CREDIT EVENT" shall mean and include the making of a Loan.
48
"CREDIT EXPOSURE" shall have the meaning provided in Section
13.04(b).
"CREDIT PARTY" shall mean the Borrowers.
"CREDITORS' COMMITTEE" shall mean the official committee of
creditors in the Case.
"DEBTORS" shall have the meaning provided in the recitals hereto.
"DEFAULT" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"DIVIDENDS" shall have the meaning provided in Section 9.10.
"DOLLARS" and "$" each shall mean lawful currency of the United
States of America.
"DOMESTIC Subsidiary" means any Subsidiary other than a Foreign
Subsidiary.
"ELIGIBLE ACCOUNTS" means, with respect to any Person, only such
Accounts of such Person as the Administrative Agent, in its reasonable
discretion, shall from time to time consider to be Eligible Accounts and, by way
of example and not limitation, excluding Accounts which:
(a) either: (i) remain unpaid more than ninety (90) days
after the original invoice date or (ii) have an original due date greater than
ninety (90) days after the original date of invoice,;
(b) have arisen from services performed by the Account
Creditor to or for the Account Debtor outside the ordinary course of business;
(c) have arisen from the sale by the Account Creditor of
goods where such goods have not been shipped or delivered to the Account Debtor;
(d) have arisen from transactions which are not
complete, are not bona fide, or require further acts on the part of the Account
Creditor to make such Account payable by the Account Debtor;
(e) have arisen in connection with sales of goods which
were shipped or delivered to the Account Debtor on other than an absolute sale
basis, such as shipments or deliveries made on consignment, a sale or return
basis, a guaranteed sale basis, a xxxx and hold basis, or on the basis of any
similar understanding;
49
(f) have arisen in connection with sales of goods which
were, at the time of sale thereof, subject to any Lien, except the security
interest in favor of the Agent created by the Loan Documents;
(g) are subject to any provision prohibiting assignment
or requiring notice of or consent to such assignment;
(h) are subject to any Lien other than the Lien in favor
of the Collateral Agent;
(i) are Accounts with respect to which the Account
Debtor is currently asserting setoff, counterclaim, defense, allowance, dispute,
or adjustment rights, or are Accounts that have arisen in connection with the
sale of goods which have been returned, rejected, repossessed, lost or damaged;
(j) are owed from an Account Debtor about which the
Account Creditor has received notice that such Account Debtor is the subject of
Financial Impairment or has suspended normal business operations, dissolved,
liquidated or terminated its existence;
(k) are owed by any Account Debtor located in New Jersey
or Minnesota unless the Account Creditor has filed all legally required Notice
of Business Activities Reports with the New Jersey Department of Taxation or the
Minnesota Department of Revenue, respectively;
(l) are Accounts with respect to which the Account
Debtor is located in any jurisdiction which requires that the Account Creditor,
in order to xxx any Person in such jurisdiction's courts, either (i) qualify to
do business in such jurisdiction or (ii) file a report with the taxation
division of such jurisdiction for the then current year, unless the Account
Creditor has fulfilled such requirements to the extent applicable for the then
current year;
(m) are evidenced by Chattel Paper or any Instrument of
any kind (including, without limitation, any promissory notes);
(n) are Accounts with respect to which any of the
representations, warranties, covenants and agreements contained in the
Prepetition Credit Agreement or any of the other Prepetition Loan Documents are
not or have ceased to be complete and correct or have been breached;
(o) are Accounts with respect to which the Account
Debtor is also a supplier or creditor of the Account Creditor, except to the
extent that the aggregate amount owed to the Account Creditor by such Account
Debtor exceeds the aggregate amount owed to such Account Debtor by the Account
Creditor;
50
(p) are Accounts with respect to which the Collateral
Agent or the Prepetition Administrative Agent does not have a first priority,
perfected security interest;
(q) represent a progress billing or have had the time
for payment extended by the Account Creditor without the consent of the
Administrative Agent (for the purposes hereof, "progress billing" means any
invoice for goods sold or leased or services rendered under a contract or
agreement pursuant to which the Account Debtor's obligation to pay such invoice
is conditioned upon the Account Creditor's completion of any further performance
under the contract or agreement);
(r) are owed by a Person that is not a citizen of or
organized under the laws of the United States or any State or are owed by any
Person located outside of the United States unless (i) such Accounts are owed by
an Account Debtor located in Canada and the Agent has a first priority lien
perfected to its satisfaction in such Accounts, or (ii) payment of such Accounts
is guaranteed by a letter of credit in form and substance and issued by a
financial institution satisfactory to the Administrative Agent, in its sole
discretion, and which has been transferred or assigned to the Administrative
Agent as security for the Obligations.
(s) are owed any government or any department, agency,
or instrumentality thereof;
(t) are owed by any State or any department, agency, or
instrumentality thereof unless the Account Creditor has complied with any
applicable statutory or regulatory requirements thereof in respect of the
Agent's security interest therein as granted hereunder;
(u) are owed by an Affiliate of the Account Creditor;
(v) are owed by an Account Debtor with respect to which
more than fifty percent (50%) of the balances then outstanding on Accounts owed
by such Account Debtor and its Affiliates to the Account Creditor has remained
unpaid for more than ninety (90) days from the dates of their original due
dates, as applicable; or
(w) are, in the Administrative Agent's reasonable credit
judgment, Accounts of an Account Debtor which is deemed to be an unacceptable
credit risk or Accounts which are otherwise deemed unacceptable. The
Administrative Agent shall use reasonable efforts to notify the Lead Borrower of
any such determination under this clause (w), but shall not be liable for any
damages arising out of any failure to so notify the Lead Borrower.
"ELIGIBLE ASSIGNEE" means any Person approved by the Required
Lenders.
"ELIGIBLE INVENTORY" means, with respect to any Person, only such
Inventory of such Person, valued at the lower of cost (on a first in, first out
basis) or market, as the
51
Administrative Agent, in its reasonable discretion, shall from time to time
consider to be Eligible Inventory and, by way of example and not limitation,
excluding Inventory which:
(a) consists of obsolete, damaged, defective,
unmerchantable, spoiled, outdated or unsalable items;
(b) consists of goods not held for sale, such as work in
process, any labels, any maintenance items, any supplies and
packaging, and any Inventory used in connection with research and
development; provided, that (i) raw materials shall be considered
goods not held for sale under this clause (b) and (ii) work in
process consisting of replacement parts of the Lead Borrower shall
not be considered goods not held for sale under this clause (b);
(c) is "R3500 Inventory" of the Lead Borrower or is
subject to a Lien other than in favor of the Administrative Agent;
(d) is not subject to a first priority, perfected
security interest in favor of the Administrative Agent or the
Prepetition Administrative Agent;
(e) is located at a location not owned by the Person
owning such Inventory and for which such Person has not delivered to
the Administrative Agent an appropriate landlord or warehouseman's
waiver, in form and substance satisfactory to the Administrative
Agent;
(f) is in the possession of a bailee or other third
Person including Inventory held by a third party for processing or
Inventory purchased by but not yet delivered to such Person and for
which such Person has not delivered to the Agent an appropriate
bailee's waiver, in form and substance satisfactory to the Agent;
(g) is held by such Person on consignment or Inventory
held by or placed into the possession of a third Person for sale or
display by that third Person;
(h) is located outside of the United States;
(i) is manufactured, produced or purchased pursuant to
any contract with the United States government, any agency or
instrumentality thereof or prime contractor thereof, which contract
provides for progress or advance payments to the extent such
Inventory is identified to such contract; or
(j) is, in the Administrative Agent's reasonable credit
judgment, Inventory which is otherwise deemed ineligible.
52
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, administrative investigations or
proceedings relating in any way to any violation of or any liability under any
Environmental Law or any permit issued, or under any approval given, under any
such Environmental Law (hereafter, "CLAIMS"), including, without limitation, (a)
any and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment,
"ENVIRONMENTAL LAW" shall mean any applicable Federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, rule of common
law or written and binding policy or guide, now or hereafter in effect and in
each case as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment,
relating to the environment, health, safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
ss. 7401 et seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. ss. 3808 et seq.; the Oil Pollution Act of 1990,
33 U.S.C. ss. 2701 et seq.; and any applicable state and local or foreign
counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA AFFILIATE" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary
of the Borrower being or having been a general partner of such person.
"EVENT OF DEFAULT" shall have the meaning provided in Section 10.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
["EXISTING MORTGAGE" means Mortgages in effect as of the Closing
Date in favor of the Collateral Agent and identified on Annex IV as an "Existing
Mortgage".]
53
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"FEES" shall mean all amounts payable pursuant to, or referred to
in, Section 3.01.
"FIELD DEMO INVENTORY" means Inventory of the Lead Borrower which is
used to demonstrate products to customers to the extent such Inventory is not
located at a facility owned or leased by the Lead Borrower.
"FIRREA" shall mean Financial Institution Reform, Recovery and
Enforcement Act of 1989.
"FILING DATE" shall have the meaning as provided in the recitals
hereto.
"FINAL ORDER" means a final order of the Bankruptcy Court in the
Cases authorizing and approving this Agreement and the other Credit Documents
under Section 364(c) of the Bankruptcy Code and entered at or after a final
hearing, in form and substance satisfactory to the Lenders, the Administrative
Agent and their counsel. The Final Order shall, among other things, have:
(a) authorized the transactions contemplated by this
Agreement and the extensions of credit under this Agreement in an
amount not greater than the Total Commitment provided for herein;
(b) authorized the payment by the Borrowers of the
Postpetition Interest as adequate protection payments to KCCI in
respect of Borrowers' obligations under the Prepetition Credit
Agreement;
(c) granted the claim status and Liens described in
Section 5, and prohibited the granting of additional Liens on the
assets of the Borrowers other than Permitted Liens; and
(d) provided that such Liens are automatically perfected
by the entry of the Final Order and also granted to the
Administrative Agent for the benefit of the Administrative Agent and
the Lenders relief from the automatic stay of Section 362(a) of the
Bankruptcy Code to enable the Administrative Agent, if the
Administrative Agent elects to do so in its discretion, to make all
filings and recordings and to take all other actions considered
necessary or advisable by the
54
Administrative Agent to perfect, protect and insure the priority of
its Liens upon the Collateral as a matter of nonbankruptcy law.
"FINANCIAL IMPAIRMENT" means, in respect of a Person, the distressed
economic condition of such Person manifested by any one or more of the following
events:
(a) the discontinuation of the business of the Person;
(b) the adjudication of the Person as a debtor or having
an order for relief under Title 11 of the United States Code entered against the
Person;
(c) the Person ceases or is unable or admits in writing
its inability, to make timely payment upon the Person's debts, obligations, or
liabilities as they mature or come due;
(d) assignment by the Person for the benefit of
creditors;
(e) voluntary institution by the Person or consent
granted by the Person to the involuntary institution (whether by petition,
complaint, application, default, answer (including, without limitation, an
answer or any other permissible or required responsive pleading admitting: (i)
the jurisdiction of the forum or (ii) any material allegations of the petition,
complaint, application, or other writing to which such answer serves as a
responsive pleading thereto), or otherwise) of any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, liquidation,
receivership, trusteeship, or similar proceeding pursuant to or purporting to be
pursuant to any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation, receivership, trusteeship, or
similar law of any jurisdiction;
(f) voluntary application by the Person for or consent
granted by the Person to the involuntary appointment of any receiver, trustee,
or similar officer (i) for the Person or (ii) of or for all or any substantial
part of the Person's property;
(g) the commencement or filing against a Person, without
such Person's application, approval or consent, of an involuntary proceeding or
an involuntary petition seeking: (a) liquidation, reorganization or other relief
in respect of such Person, its debts or all or a substantial part of its assets
under any Federal, state or foreign bankruptcy, insolvency, receivership, or
similar law now or hereafter in effect or (b) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for such
Person or for a substantial part of its assets, and, in any such case, either
(i) such proceeding or petition shall continue undismissed for sixty (60) days
or (ii) an order or decree approving or ordering any of the foregoing shall be
entered; or
(h) any judgment, writ, warrant of attachment,
execution, or similar process is issued or levied involving an amount which is
deemed by the Agent to be material, against any Person or against such Person's
assets and such judgment, writ,
55
warrant of attachment, execution, or similar process is not released, vacated,
or fully bonded within thirty (30) days after it is issued, levied or rendered.
"FIRST DAY ORDERS" shall have the meaning provided in Section 10.05.
"FOREIGN PENSION PLAN" means any plan, fund (including, without
limitation, any super-annuation fund) or other similar program established or
maintained outside of the United States of America by the Borrowers or one or
more of their Subsidiaries or Affiliates primarily for the benefit of employees
of any of the Borrowers or such Subsidiaries or its Affiliates residing outside
the United States of America, which plan, fund, or similar program provides or
results in, retirement income, a deferral of income in contemplation of
retirement or payments to be made upon termination of employment, and which is
not subject to ERISA or the Code.
"FOREIGN SUBSIDIARY" means any Subsidiary that is organized under
the laws of a jurisdiction other than the United States of America or any state
thereof or the District of Columbia.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 13.07(a).
"GOVERNMENTAL AUTHORITY" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government, any
securities exchange and any self-regulatory organization (including the National
Association of Insurance Commissioners).
"HAZARDOUS MATERIALS" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," (extremely hazardous waste," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar meaning and regulatory effect, under any applicable Environmental Law;
and (c) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any Governmental Authority.
"HEDGE AGREEMENT" shall mean (i) any interest rate swap agreement,
any interest rate cap agreement, any interest rate collar agreement or other
similar agreement or arrangement designed to hedge the position of the Borrowers
or any of their Subsidiaries with respect to interest rates and (ii) any
currency swap agreement, forward currency
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purchase agreement or similar agreement or arrangement designed to protect
against fluctuations in currency exchange rates.
"HOUSE DEMO INVENTORY" means Inventory of the Lead Borrower which is
used to demonstrate products to customers to the extent such Inventory is
located at a facility owned or leased by the Lead Borrower.
"INDEBTEDNESS" of any Person shall mean, without duplication, (i)
all indebtedness of such Person for borrowed money, (ii) the deferred purchase
price of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease Obligations
of such Person, (vi) all obligations of such Person to pay a specified purchase
price for goods or services whether or not delivered or accepted, i.e.
take-or-pay and similar obligations, (vii) all net obligations of such Person
under Hedge Agreements and (viii) all Contingent Obligations of such Person
(other than contingent obligations arising from the guaranty by such Person of
the obligations of any of the Borrowers and/or any of their Subsidiaries to the
extent such guaranteed obligations do not constitute Indebtedness), provided
that Indebtedness shall not include trade payables, deferred revenue, taxes and
accrued expenses, in each case arising in the ordinary course of business.
"INSTRUMENTS" means "instruments" as defined by the UCC
"INTERIM ORDER" means an order of the Bankruptcy Court in the Cases
authorizing and approving this Agreement on an interim basis under Section
364(c) of the Bankruptcy Code and entered at a preliminary hearing under
Bankruptcy Rule 4001, in form and substance satisfactory to the Lenders, the
Administrative Agent and their counsel. The Interim Order shall, among other
things, have:
(a) authorized the transactions contemplated by this
Agreement and the extensions of credit under this Agreement in an
amount not greater than the Total Commitment;
(b) authorized the payment by the Borrowers of the
Postpetition Interest as adequate protection to KCCI under the
Prepetition Credit Agreement;
(c) granted the claim status and Liens described in
Section 5, and prohibited the granting of additional Liens on the
assets of the Borrowers other than Permitted Liens; and provided,
that such Liens are automatically perfected by the entry of the
Interim Order and also granted to the Administrative Agent for the
benefit of the Administrative Agent and the Lenders, relief from the
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automatic stay of Section 362(a) of the Bankruptcy Code to enable
the Administrative Agent, if the Administrative Agent elects to do
so in its discretion, to make all filings and recordings and to take
all other actions considered necessary or advisable by the
Administrative Agent to perfect, protect and insure the priority of
its Liens upon the Collateral as a matter of nonbankruptcy law.
"INVENTORY" means and includes "inventory" as defined in the UCC.
"LEASEHOLD" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"LENDER" shall have the meaning provided in the first paragraph of
this Agreement.
"LIEN" shall mean ANY mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"LOAN" shall have the meaning PROVIDED in Section 1.01.
"MARGIN STOCK" shall have the MEANING provided in Regulation U.
"MATERIAL ADVERSE EFFECT" means if Lead Borrower shall fail to
recognize a minimum of (i) $8,200,000 in revenue from its U.S. operations (or
$11,000,000 on a consolidated basis) for the month of July, 2004, (ii)
$8,750,000 in revenue from its U.S. operations (or $11,500,000 on a consolidated
basis) for the month of August, 2004 and (iii) $9,750,000 in revenue from its
U.S. operations (or $12,750,000 on a consolidated basis) for the month of
September, 2004, measured in each case in accordance with GAAP; but excluding in
each case any "Material Adverse Effect" arising from or related to the outbreak
of civil unrest, hostilities, terrorist activities, or war (whether or not
formally declared) which causes, in a measurable manner, the Material Adverse
Effect..
"MATURITY DATE" means the earliest to occur of (a) October 15, 2004,
(b) the effective date of a plan of reorganization in the Case and (c) the
effective date of a sale of all or substantially all of the Borrowers' assets or
business pursuant to Section 363 of the Bankruptcy Code which is authorized by
the Bankruptcy Court (and in the event of a series of transaction resulting in
the sale of all or substantially all of the Borrowers' assets, the latest of
such sales).
"MONTHLY PAYMENT DATE" shall mean the last Business Day of each
calendar month beginning with July 30, 2004.
"XXXXX'X" shall have the meaning provided in the definition of Cash
Equivalents.
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["MORTGAGE" shall mean and include Existing Mortgage, provided, that
after the execution and delivery thereof, each Additional Mortgage shall also
constitute a Mortgage.]
["MORTGAGED PROPERTIES" shall mean each of the Real Properties
listed on Annex IV hereto and, after the execution and delivery of any
Additional Mortgage, shall include the respective Additional Mortgaged
Property.]
"NET CASH PROCEEDS" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of expenses of sale (including payment of
principal, premium and interest of other Indebtedness secured by the assets that
were the subject of the Asset Sale and required to be, and which is, repaid
under the terms thereof as a result of such Asset Sale, commissions, reasonable
costs, attorneys' fees and accountants' fees), and incremental taxes paid or
payable as a result thereof, provided, that Net Cash Proceeds shall not include
cash deposited with the Administrative Agent pursuant to a cash collateral
arrangement pursuant to this Agreement.
"NET OFFERING PROCEEDS" means the proceeds received from (a) the
issuance of any Capital Stock or (b) the incurrence of any Indebtedness, in each
case net of the actual liabilities for reasonably anticipated cash taxes in
connection with such issuance or incurrence, if any, any underwriting, brokerage
and other customary selling commissions incurred in connection with such
issuance or incurrence, and reasonable legal, advisory and other fees and
expenses, including title and recording tax expenses, if any, incurred in
connection with such issuance or incurrence.
"NOTE" shall have the meaning as provided in Section 1.05. e Date.
------------
"NOTICE OF BORROWING" shall mean any written notice of Borrowing
delivered pursuant to Section 1.03(a) or (b).
"NOTICE OFFICE" shall mean the office of the Administrative Agent
located at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: X. Xxxxx,
Mailcode OH-01-27-0504 or such other office as the Administrative Agent may
designate to the Lead Borrower from time to time.
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent, or any Lender pursuant to the terms of this Agreement
or any other Credit Document.
"ORDERS" shall mean, collectively, the Interim Order and the Final
Order.
"PARTICIPANT" shall have the meaning provided in Section 13.04(b).
"PAYMENT IN FULL" shall mean irrevocable payment in full in cash in
United States Dollars of all of the Obligations and all Prepetition Obligations.
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"PAYMENT OFFICE" shall mean the office of the Administrative Agent
located at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, Attention: X. Xxxxx,
Mailcode OH-01-27-0504 or such other office as the Administrative Agent may
designate to the Lead Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"PERFECTION CERTIFICATE" shall mean the Perfection Certificate dated
as of the date hereof in the form of Exhibit H hereto.
"PERMITTED DISCRETION" means the good faith judgment or good faith
exercise of discretion by the Administrative Agent to the extent based upon any
factor or circumstance which the Administrative Agent believes in good faith
(the burden of establishing lack of good faith being on the Borrowers): (a) will
or could reasonably be expected to adversely affect the value of any Collateral
(ordinary wear and tear excepted), the enforceability or priority of the
Collateral Agent's Liens thereon or the amount which the Administrative Agent
and the Lenders would be likely to receive (after giving consideration to delays
in payment and costs of enforcement) in the liquidation of such Collateral; (b)
suggests that any collateral report or financial information delivered to the
Administrative Agent by any Person on behalf of the Borrowers is incomplete,
inaccurate or misleading in any material respect;; or (c) creates or could
reasonably be expected to create a potential or actual Event of Default. In
exercising such judgment, the Administrative Agent may consider in good faith
such factors or circumstances already included in or tested by the definition of
Eligible Accounts or Eligible Inventory, as well as any of the following: (i)
the financial and business condition of the Borrowers, (ii) changes in
collection history and dilution with respect to the Accounts, (iii) material
changes in demand for, and changes in pricing of, Inventory, (iv) changes in any
concentration of risk with respect to Accounts or Inventory, (v) any other
factors or circumstances that will or could reasonably be expected to have a
Material Adverse Effect, (vi) history of charge-backs or other credit
adjustments, and (vii) any other factors that change or could reasonably be
expected to materially change the credit risk of lending to any of the Borrowers
on the security of the Accounts or the Inventory.
"PERMITTED ENCUMBRANCES" shall mean, with respect to any Real
Property subject to a Mortgage or an Additional Mortgage, such exceptions to
title as are set forth in the title insurance policy or title commitment
delivered with respect thereto, all of which exceptions must be reasonably
acceptable to the Administrative Agent.
"PERMITTED HOLDERS" shall mean the holders of the Capital Stock of
Paragon on the Filing Date.
"PERMITTED LIENS" shall have the meaning provided in Section 9.03.
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"PERSON" shall mean any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"PLAN" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute) the any of the Borrowers, any Subsidiary of any of the
Borrowers or an ERISA Affiliate, and each such plan for the five-year period
immediately following the latest date on which any Borrower, any Subsidiary of
any Borrower, or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"PlEDGE AGREEMENT" shall have the meaning provided in Section 6.13.
"PLEDGE AGREEMENT COLLATERAL" shall mean all "Collateral" as defined
in the Pledge Agreement.
"POSTPETITION INTEREST" shall mean interest accruing on the
obligations under the Prepetition Credit Agreement calculated based on the
applicable non-default rate of interest under the Prepetition Credit Agreement.
"PREPETITION ADMINISTRATIVE AGENT" shall mean KeyBank as successor
by assignment to KCCI.
"PREPETITION COLLATERAL" shall mean "Collateral" as defined in the
Prepetition Credit Agreement.
"PREPETITION CREDIT AGREEMENT" shall have the meaning provided in
the recitals hereto.
"PREPETITION FINANCING DOCUMENTS" means the Prepetition Credit
Agreement and all security agreements, guaranties, promissory notes and related
agreements and documents executed, delivered, issued or filed at any time in
connection therewith
"PREPETITION LENDER" shall have the meaning provided in the recitals
hereto.
"PREPETITION LIENS" shall have the meaning provided in the recitals
hereto.
"PREPETITION OBLIGATIONS" shall mean all "Obligations" as defined in
the Prepetition Credit Agreement.
"PRIME RATE" means for any day, the higher of (a) the rate most
recently announced by KeyBank at its principal office as its "prime rate" or
"base rate", which is not necessarily the lowest rate made available by KeyBank
and (b) the Federal Funds Effective Rate in effect on such day plus one half of
one percent (1/2 of 1%) per annum. The "prime rate" announced by KeyBank is
evidenced by the recording thereof after its
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announcement in such internal publication or publications as KeyBank may
designate. Any change in the interest rate resulting from a change in such
"prime rate" or "base rate" announced by KeyBank shall become effective without
prior notice to the Borrowers as of 12:01 a.m. (Cleveland, Ohio time) on the
Business Day on which each change in such "prime rate" or "base rate" is
announced by KeyBank.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C.ss.6901 et seq.
"REAL PROPERTY" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"RECOVERY EVENT" shall mean the receipt by any of the Borrowers or
any of their Subsidiaries of any cash insurance proceeds or condemnation award
payable (i) by reason of theft, loss, physical destruction or damage or any
other similar event with respect to any property or asset of any Borrower or any
Subsidiary of any Borrower, or (ii) by reason of any condemnation, taking,
seizing or similar event with respect to any property or asset of any Borrower
or any of Subsidiary of any Borrower.
"REGISTER" shall have the meaning provided in Section 13.16.
"REGULATION D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"REGULATION T, U AND X" shall mean Regulations T, U and X of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successor to all or a portion thereof establishing margin requirements.
"RELATED FUND" means, with respect to any Lender which is a fund,
any other fund that invests in bank loans and is managed by the same investment
advisor of such Lender or by an Affiliate of such investment advisor.
"REPORTABLE EVENT" shall mean an event, other than the filing of the
Case, described in Section 4043(c) of ERISA with respect to a Plan that is
subject to Title IV of ERISA other than those events as to which the 30-day
notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC
Regulation Section 4043.
"REQUIRED APPRAISAL" shall have the meaning provided in Section
8.16(d).
"REQUIRED LENDERS" shall mean (a) Presstek, if only Tranche A Loans
and/or Tranche B Loans are outstanding and (b) Presstek and KeyBank, if Tranche
C Loans are outstanding.
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"REQUIREMENT OF LAW" means, as to any Person, any law (including
common law), treaty, rule or regulation or judgment, decree, determination or
award of an arbitrator or a court or other Governmental Authority, including
without limitation, any Environmental Law, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"RESERVE AMOUNT" means an amount determined by the Agent, in its
Permitted Discretion, as a reserve against Collateral values and potential or
anticipated obligations of the Borrowers but without duplication of amounts
already reserved against the value of Collateral under the definitions of
"Eligible Inventory" or "Eligible Accounts." Without limiting the generality of
the foregoing, the Reserve Amount shall include: (a) tax liabilities and other
obligations owing to governmental entities, (b) litigation liabilities, (c)
amounts that are required to be expended in order for Borrowers and each of
Borrowers' operations and property to comply with Environmental Laws or in order
to correct any violation by Borrowers or each of Borrowers' operations or
property of Environmental Laws, (d) the anticipated costs and expenses relating
to the liquidation of Collateral, (e) unpaid sales taxes, (f) liabilities and
other obligations owing by Borrowers to any lessor of real property leased by
Borrowers or to any warehouseman, and (g) reserves for any claims asserted or
likely to be asserted (in Administrative Agent's sole determination) that have
resulted or would result in Liens on the Collateral.
"S&P" shall have the meaning provided in the definition of Cash
Equivalents.
"SEC" shall mean the Securities and Exchange Commission and any
successor thereto.
"SECTION 4.04(D)(II) CERTIFICATE" shall have the meaning provided in
Section 4.04(d)(ii).
"SECURITIES" shall mean all the Securities as defined in the Pledge
Agreement.
"SECURITY AGREEMENT" shall have the meaning provided in Section
6.13.
"SECURITY AGREEMENT COLLATERAL" shall mean all "Collateral" as
defined in the Security Agreement.
"SECURITY DOCUMENTS" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage, each Additional Mortgage, if any, the Agency
Agreements, the Orders and each of the security agreements, mortgages and other
instruments and documents executed and delivered pursuant to any of the
foregoing or pursuant to Sections 5.02 and 8.16.
"SERVICE RELATED ACCOUNT" means the outstanding amount of any
Account arising in connection with an A. B. Dick Product Service Agreement or
similar
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agreement for the purchase of regular maintenance services to be rendered by the
Lead Borrower pursuant to such A. B. Dick Product Service Agreement.
"SETTLEMENT" shall have the meaning provided in Section 1.04(d).
"SETTLEMENT ADVANCE" shall have the meaning provided in Section
1.04(c).
"SETTLEMENT DATE" shall have the meaning provided in Section
1.04(d).
"SEVERANCE PAYMENT" shall mean severance payments to employees of
the Borrower and Subsidiaries whose employment has been terminated prior to the
Filing Date.
"STATUTORY COMMITTEE" shall mean any committee appointed in the Case
pursuant to Section 1102 of the Bankruptcy Code.
"SUBSIDIARY" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"SUPERPRIORITY CLAIM" shall mean a claim against any of the
Borrowers in the Case which is an administrative expense claim having priority
over any and all administrative expenses of the kind specified in Sections
503(b), 506(c) and 507 of the Bankruptcy Code.
"TAXES" shall have the meaning provided in Section 4.04(a).
"TOTAL COMMITMENT" shall mean the sum of the Commitments of each of
the Lenders which shall equal $6,000,000 in the aggregate as of the Closing
Date.
"TOTAL UNUTILIZED COMMITMENT" shall mean, at any time, (i) the Total
Commitment at such time less (ii) the sum of the aggregate principal amount of
all Loans outstanding at such time.
"TRANCHE A COMMITMENT" shall have the meaning provided in Section
1.01(a).
"TRANCHE A LOANS" shall have the meaning provided in Section
1.01(a).
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"TRANCHE B COMMITMENT" shall have the meaning provided in Section
1.01(b).
"TRANCHE B LOANS" shall have the meaning provided in Section
1.01(b).
"TRANCHE C COMMITMENT" shall have the meaning provided in Section
1.01(c).
"TRANCHE C LOANS" shall have the meaning provided in Section
1.01(c).
"TRANSFEREE" shall have meaning provided in Section 13.04(d).
"UCC" shall mean the Uniform Commercial Code, as in effect from time
to time in the relevant jurisdiction.
"UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time consistent with Financial Accounting
Standards No. 87 exceeds the market value of the assets allocable thereto, each
determined in accordance with Statement of Financial Accounting Standards No.
87.
"UNUTILIZED COMMITMENT" means for (a) Presstek, the excess of the
Tranche A Commitment over the sum of the aggregate outstanding principal amount
of Tranche A Loans, plus the excess of the Tranche B Commitment over the sum of
the aggregate outstanding principal amount of Tranche B Loans and (b) KeyBank,
the excess of the Tranche C Commitment over the sum of the aggregate outstanding
principal amount of Tranche C Loans.
"VOTING STOCK" shall mean any class or classes of Capital Stock of
any of the Borrowers pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
Board of Directors of the relevant Borrower.
"WRITTEN" or "IN WRITING" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
SECTION 12. The Administrative Agent.
12.01 Appointment. (a) The Lenders hereby designate KeyBank National
Association as Administrative Agent (for purposes of this Section 12, the term
the "Administrative Agent" shall include KeyBank in its capacity as Collateral
Agent pursuant to the Security Documents) to act as specified herein and in the
other Credit Documents. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of such Note shall be deemed irrevocably to
authorize the Administrative Agent to take such action on its behalf under the
provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein
65
and to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of the Administrative Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. The Administrative Agent may perform any of its duties hereunder or
under the other Credit Documents by or through its respective officers,
directors, agents, employees or affiliates.
(b) Nature of Duties. (i) The Administrative Agent shall
not have any duties or responsibilities except those expressly set forth in this
Agreement and the Security Documents. Neither the Administrative Agent nor any
of its respective officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted by it or them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct (in either case, as
determined by a court of competent jurisdiction). The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Lender or the holder
of any Note; and nothing in this Agreement or any other Credit Document,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any
other Credit Document except as expressly set forth herein or therein.
12.02 Lack of Reliance on the Administrative Agent. Independently
and without reliance upon the Administrative Agent, each Lender and the holder
of each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrowers and their Subsidiaries in connection with the making
and the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrowers and their Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrowers and their Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrowers and their Subsidiaries or the existence or
possible existence of any Default or Event of Default.
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12.03 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Lenders;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, neither any Lender nor the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders.
12.04 Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent (which may be counsel for the
Borrower).
12.05 Indemnification. To the extent the Administrative Agent is not
reimbursed and indemnified by the Borrowers, the Lenders will reimburse and
indemnify the Administrative Agent in proportion of their respective
Commitment(s) to the Total Commitment, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by the Administrative Agent in performing its
respective duties hereunder or under any other Credit Document, in any way
relating to or arising out of this Agreement or any other Credit Document;
provided, 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 the Administrative Agent's gross
negligence or willful misconduct (in either case, as determined by a court of
competent jurisdiction).
12.06 The Administrative Agent in Its Individual Capacity. With
respect to its obligation to make Loans under this Agreement, the Administrative
Agent shall have the rights and powers specified herein for a "Lender" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Lenders," "Required Lenders," "holders of Notes"
or any similar terms shall, unless the context clearly otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with any Credit Party or any Affiliate of
any Credit Party as if it were not performing the duties specified herein, and
may accept fees and other consideration from any of the Borrowers or any
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other Credit Party for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
12.07 Holders. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.08 Resignation by the Administrative Agent. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
thirty (30) Business Days' prior written notice to the Borrowers and the
Lenders. Such resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Required
Lenders shall appoint a successor Administrative Agent hereunder.
(c) If a successor Administrative Agent shall not have
been so appointed within such thirty (30) Business Day period, the
Administrative Agent shall then appoint a successor Administrative Agent who
shall serve as the Administrative Agent hereunder or thereunder until such time,
if any, as the Required Lenders appoint a successor Administrative Agent as
provided above.
(d) If no successor Administrative Agent has been
appointed pursuant to clause (b) or (c) above by the thirtieth (30th) Business
Day after the date such notice of resignation was given by the Administrative
Agent, the Administrative Agent's resignation shall become effective and the
Required Lenders shall thereafter perform all the duties of the Administrative
Agent hereunder and/or under any other Credit Document until such time, if any,
as the Lenders appoint a successor Administrative Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrowers agree to: (i) whether
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, execution and delivery of the Credit Documents and
the documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of
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Xxxxxxxx Xxxx LLP) and of the Administrative Agent and each of the Lenders in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent and either one
outside counsel or in-house counsel for each of the Lenders); (ii) pay and hold
each of the Lenders harmless from and against any and all present and future
stamp and other similar taxes with respect to the foregoing matters and save
each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and (iii) indemnify each Lender
(including in its capacity as the Administrative Agent), its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them (whether asserted by the Borrowers or otherwise) as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Lender is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or the consummation
of any other transaction contemplated in any Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct (in
either case, as determined by a court of competent jurisdiction) of the Person
to be indemnified) or (b) the actual or alleged presence of Hazardous Materials
in the air, surface water, groundwater, surface or subsurface of any Real
Property owned or at any time operated by any of the Borrowers or any of their
Subsidiaries, the generation, storage, transportation or disposal of Hazardous
Materials at any location whether or not owned or operated by any of the
Borrowers or any of their Subsidiaries, the non-compliance of any Real Property
owned or at any time operated by any of the Borrowers or any of their
Subsidiaries with federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any such Real Property,
or any Environmental Claim asserted against any or the Borrowers, any of their
Subsidiaries, or any such Real Property, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct (in either case, as determined by a court of competent jurisdiction)
of the Person to be indemnified). To the extent that the undertaking to
indemnify, pay or hold harmless the Administrative Agent or any Lender set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrowers shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an
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Event of Default then exists, each Lender is hereby authorized at any time or
from time to time, without presentment, demand, protest or other notice of any
kind to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by
such Lender (including without limitation by branches and agencies of such
Lender wherever located) to or for the credit or the account of any Credit Party
against and on account of the Obligations and liabilities of such Credit Party
to such Lender under this Agreement or under any of the other Credit Documents,
including, without limitation, all interests in Obligations of such Credit Party
purchased by such Lender pursuant to Section 13.04(b), and all other claims of
any nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Lender shall have
made any demand hereunder and although said Obligations, liabilities or claims,
or any of them, shall be contingent or unmatured.
13.03 Notices. (a) Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to a Credit Party, at
the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to the Administrative Agent, at its
Notice Office; if to any Lender, at its address specified for such Lender
opposite its signature below; or, at such other address as shall be designated
by any party in a written notice to the other parties hereto. All such notices
and communications shall be mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, and shall be effective when received.
(b) Without in any way limiting the obligation of the
Borrowers to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent may prior to receipt of written confirmation
act without liability upon the basis of such telephonic notice, believed by the
Administrative Agent in good faith to be from an Authorized Officer of a
Borrower. In each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of such telephonic notice.
13.04 Assignments; Participations, Etc. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, provided that the Borrowers may
not assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Lenders.
(b) Each Lender may at any time sell to one or more
banks or other financial institutions ("PARTICIPANTS") participating interests
in all or any portion of its Commitment(s) and Loans or any other interest of
such Lender hereunder (in respect of any Lender, its "CREDIT EXPOSURE"). In the
event of any such sale by a Lender of participating interests to a Participant,
such Lender's obligations under this Agreement
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shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, and the Borrowers and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. At the time of each sale
of a participating interest, pursuant to this Section 13.04(b), the Lender shall
provide to the Borrowers or the Administrative Agent revised IRS Forms, and if
applicable, a Section 4.04(d)(ii) Certificate described in Section 4.04(d),
reflecting that portion of its Commitment(s) and Loan retained by it on an
amended IRS Form W-8BEN and that portion of its Commitment(s) and Loan which had
been sold to a Participant on a IRS Form W-8IMY (together with any required
attachments). The Borrowers agree that if amounts outstanding under this
Agreement or any of the Credit Documents are due or unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of setoff in respect
of its participating interest in amounts owing under this Agreement and the
Credit Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement or any other
Credit Document, provided, however, that such right of setoff shall be subject
to the obligation of such Participant to share with the Lenders, and the Lenders
agree to share with such Participant, as provided in Section 13.02. The Borrower
also agrees that each Participant shall be entitled to the benefits of Sections
1.08 and 4.04 with respect to its participation in the Loans outstanding from
time to time, provided, that such Participant's benefits under Sections 1.08 and
4.04 shall be limited to the benefits that the primary Lender would be entitled
to thereunder. Each Lender agrees that any agreement between such Lender and any
such Participant in respect of such participating interest shall not restrict
such Lender's right to approve or agree to any amendment, restatement,
supplement or other modification to, waiver of, or consent under, this Agreement
or any of the Credit Documents except to the extent that any of the foregoing
would (i) extend the final scheduled maturity of any Loan or Note in which such
Participant is participating beyond the Maturity Date, or reduce the rate or
extend the time of payment of interest or fees on any such Loan or Note (except
in connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the Participant's participation over the amount thereof then in effect (it
being understood that waivers or modifications of conditions precedent,
covenants, Events of Default or Default or of a mandatory reduction in
Commitments shall not constitute a change in the terms of such participation,
and that an increase in any Commitment or Loan shall be permitted without the
consent of any Participant if the Participant's participation is not increased
as a result thereof), (ii) consent to the assignment or transfer by the
Borrowers of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such Participant is participating.
(c) Any Lender may at any time assign to one or more
Eligible Assignees, including an Affiliate thereof (each an "ASSIGNEE"), all or
any part of its Credit Exposure pursuant to an Assignment Agreement in the form
of Exhibit I
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("ASSIGNMENT AGREEMENT"), provided that (i) it assigns its Credit Exposure in an
amount not less than $1,000,000 in the case of Loans (or if less the entire
amount of Lender's Credit Exposure) and (ii) any assignment of all or any
portion of any Lender's Credit Exposure to an Assignee, shall require the prior
written consent of the Administrative Agent and, so long as no Default or Event
of Default exists, the Borrowers (the consent of the Borrowers not to be
unreasonably withheld or delayed), provided, however, that for the first fifteen
Business Days following the Closing Date, assignments by the Administrative
Agent shall not require the consent of the Borrowers, and provided further, that
notwithstanding the foregoing limitations, any Lender (without the prior written
consent of the Administrative Agent or of the Borrowers) may at any time assign
all or any part of its Credit Exposure to any Affiliate of such Lender or to any
other Lender (or in the case of a Lender which is a fund, any Related Fund).
Upon execution of an Assignment Agreement and the payment of a nonrefundable
assignment fee of $3,500 (provided that no such fee shall be payable upon
assignments by any Lender which is a fund to any Related Fund, and no such fee
shall be payable by the Administrative Agent in connection with assignments
hereunder; and provided further that in the case of a simultaneous assignment by
a Lender to one or more Related Funds of another Lender, only a single $3,500
fee shall be payable for all such assignments by such Lender to such Related
Funds) in immediately available funds to the Administrative Agent at its Payment
Office in connection with each such assignment, written notice thereof by such
transferor Lender to the Administrative Agent and the recording by the
Administrative Agent of such assignment and the resulting effect upon the Loans
and Commitment(s) of the assigning Lender and the Assignee, the Assignee shall
have, to the extent of such assignment, the same rights and benefits as it would
have if it were a Lender hereunder and the holder of the Obligations (provided
that the Borrowers and the Administrative Agent shall be entitled to continue to
deal solely and directly with the assignor Lender in connection with the
interests so assigned to the Assignee until written notice of such assignment,
together with payment instructions, addresses and related information with
respect to the Assignee, shall have been given to the Borrowers and the
Administrative Agent by the assignor Lender and the Assignee) and, if the
Assignee has expressly assumed, for the benefit of the Borrower, some or all of
the transferor Lender's obligations hereunder, such transferor Lender shall be
relieved of its obligations hereunder to the extent of such assignment and
assumption, and except as described above, no further consent or action by the
Borrowers, the Lenders or the Administrative Agent shall be required. At the
time of each assignment pursuant to this Section 13.04(c) to a Person which is
not already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for United States Federal
income tax purposes, the respective Assignee shall provide to the Borrowers and
the Administrative Agent the appropriate IRS Forms (and, if applicable a Section
4.04(d)(ii) Certificate) described in Section 4.04(d). Each Assignee shall take
such Credit Exposure subject to the provisions of this Agreement and to any
request made, waiver or consent given or other action taken hereunder, prior to
the receipt by the Administrative Agent and the Borrowers of written notice of
such transfer, by each previous holder of such Credit Exposure. Such Assignment
Agreement shall be deemed
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to amend this Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Assignee as a Lender and the resulting adjustment
of all or a portion of the rights and obligations of such transferor Lender
under this Agreement, the Commitment, or Commitment Percentage, the case may be
(in each case, rounded to twelve decimal places), the Loans and any new Notes to
be issued, at the Borrowers' expense, to such Assignee, and no further consent
or action by the Borrowers or the Lenders shall be required to effect such
amendments.
(d) The Borrowers authorize each Lender to disclose to
any Participant or Assignee (each, a "TRANSFEREE") and any prospective
Transferee any and all financial information in such Lender's possession
concerning the Borrowers and any Subsidiary of any Borrower which has been
delivered to such Lender by any Borrower pursuant to this Agreement or which has
been delivered to such Lender by any Borrower in connection with such Lender's
credit evaluation of the Borrowers prior to entering into this Agreement;
provided that such Transferee or prospective Transferee agrees to treat any such
information which is not public as confidential.
(e) Notwithstanding any other provision set forth in
this Agreement, any Lender may at any time pledge or assign all or any portion
of its rights under this Agreement and the other Credit Documents (including,
without limitation, the Notes held by it) to any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Board without notice to, or
the consent of, the Borrowers; provided that no such pledge or assignment of a
security interest under this Section 13.04(e) shall release a Lender from any
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto. Any Lender which is a fund may pledge all or any portion of
its Notes or Loans to its trustee or other creditor in support of its
obligations to its trustee or other creditor. No such pledge or assignment shall
release the transferor Lender from its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between any Credit Party and the Administrative Agent or any Lender shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any Lender would otherwise have. No notice to or demand
on any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
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13.06 Payments. (a) The Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of any Credit Party in
respect of any Obligations of such Credit Party hereunder, it shall distribute
such payment to the Lenders (other than any Lender that has expressly waived its
right to receive its pro rata share thereof) pro rata based upon their
respective shares, if any, of the Obligations with respect to which such payment
was received.
(b) Each of the Lenders agrees that, if it should
receive any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Credit
Documents, or otherwise) which is applicable to the payment of the principal of,
or interest on, the Loans or Fees, of a sum which with respect to the related
sum or sums received by other Lenders is in a greater proportion than the total
of such Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in the appropriate participation by all of the Lenders in such
amount, provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
13.07 Calculations, Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrowers to the Lenders), provided that (x) except as otherwise
specifically provided herein, all computations determining compliance with
Section 9, including definitions used therein shall utilize accounting
principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the historical financial statements of
the Borrowers and (y) that if at any time the computations determining
compliance with Section 9, including definitions used therein, utilize
accounting principles different from those utilized in the financial statements
furnished to the Lenders, such financial statements shall be accompanied by
reconciliation work-sheets.
(b) All computations of interest, Commitment Commission
and Fees hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, Commitment Commission or Fees
are payable.
13.08 Governing Law: Submission to Jurisdiction; Venue; Waiver of
Jury Trial. (a) This Agreement and the other Credit Documents and the rights and
obligations of the parties hereunder and thereunder shall be construed in
accordance with and be governed by the internal laws of the State of Ohio. Any
legal action or proceeding
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with respect to this Agreement or any other Credit Document may be brought in
the Bankruptcy Court or the courts of the State of Ohio or of the United States
for the Northern District of Ohio, and, by execution and delivery of this
Agreement, each Credit Party hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each Credit Party to this Agreement hereby further irrevocably
waives any claim that any such courts lack jurisdiction over such Credit Party,
and agrees not to plead or claim, in any legal action or proceeding with respect
to this Agreement or any other Credit Document brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such Credit Party. If for
any reason such designee, appointee and agent shall cease to be available to act
as such, each credit party agrees to designate a new designee, appointee and
agent in Cleveland, Ohio on the terms and for the purposes of this provision
satisfactory to the Administrative Agent under this Agreement. The Borrowers
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, or by personal service
within or without the State of Ohio to the Borrowers at their respective
addresses set forth opposite its signature below. Nothing herein shall affect
the right of the Administrative Agent or any Lender to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
(c) Each of the parties to this Agreement hereby
irrevocably waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement, the other Credit
Documents or the transactions contemplated hereby or thereby.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Lead Borrower and
the Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the
date (the "CLOSING DATE") on which (i) the Borrowers, the Administrative Agent
and each of the Lenders shall have signed a counterpart hereof (whether the same
or different counterparts) and shall have delivered the same to the
Administrative Agent at the Notice Office of the Administrative Agent or, in the
case of the Lenders, shall have given to the
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Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it and (ii) the conditions set forth in Section 6
are met to the satisfaction of, or waived in writing by, the Administrative
Agent and the Required Lenders. Unless the Administrative Agent has received
actual notice from any Lender that the conditions contained in Section 6 have
not been met to its satisfaction or waived by it in writing, upon the
satisfaction of the condition described in clause (i) of the immediately
preceding sentence and upon the Administrative Agent's good faith determination
that the conditions described in clause (ii) of the immediately preceding
sentence have been met or waived in writing, then the Closing Date shall be
deemed to have occurred on the date determined by clause (i), regardless of any
subsequent determination that one or more of the conditions thereto had not been
met (although the occurrence of the Closing Date shall not release the Borrowers
from any liability for failure to satisfy one or more of the applicable
conditions contained in Section 6).
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrowers and the Required Lenders, provided that no
such change, waiver, discharge or termination shall, without the consent of each
Lender (with Obligations being directly affected thereby in the case of the
following clause (i)), (i) extend the Maturity Date or Note beyond the Maturity
Date, or reduce the rate or extend the time of payment of interest (other than
as a result of waiving the applicability of any post-default increase in
interest rates) or Fees thereon, or reduce the principal amount thereof (it
being understood that any amendment or modification to the financial definitions
in this Agreement shall not constitute a reduction in the rate of interest for
purposes of this clause (i)), (ii) release all or substantially all of the
Collateral (in each case except as expressly provided in the Credit Documents),
(iii) amend, modify or waive any provision of this Section 13.12, (iv) change
the definition of Required Lenders or (v) consent to the assignment or transfer
by any of the Borrowers of any of its rights and obligations under this
Agreement; provided further that no such change, waiver, discharge or
termination shall (A) increase the Commitment(s) of any Lender over the amount
thereof then in effect without the consent of such Lender (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default shall not constitute an increase of the Commitment of any
Lender, and that an increase in the available portion of any Commitment of any
Lender shall not constitute an increase in the Commitment of such Lender), (B)
without the consent of the Administrative Agent, amend, modify or waive any
provision of Section 12 as same applies to the Administrative Agent or any other
provision as same relates to the rights or obligations of the Administrative
Agent or (C) without the consent of the Collateral Agent, amend,
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modify or waive any provision relating to the rights or obligations of the
Collateral Agent.
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.08, 4.04, 12.06 or 13.01 shall, subject to the
provisions of Section 13.17 (to the extent applicable), survive the execution
and delivery of this Agreement and the making and repayment of the Loans.
13.14 Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Lender, provided that the Borrowers shall not be responsible for costs
arising under Sections 1.08 or 4.04 resulting from any such transfer to the
extent not otherwise applicable to such Lender prior to such transfer.
13.15 Confidentiality. Except as required by the Bankruptcy Court
and subject to Section 13.04, the Lenders shall hold all non-public information
obtained pursuant to the requirements of this Agreement which has been
identified as such by the Borrowers in accordance with its customary procedure
for handling confidential information of this nature and in accordance with safe
and sound banking practices and in any event may make disclosure reasonably
required by any bona fide actual or potential transferee or participant in
connection with the contemplated transfer of any Loans or participation therein
or an Affiliate of such Lender (including attorneys, legal advisors and
consultants of such Lender) (so long as each of such actual or potential
transferee, participant or Affiliate agrees to be bound by the provisions of
this Section 13.15) or as required or requested by any governmental agency or
representative thereof or pursuant to legal process, provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrowers of any request by any governmental agency or representative
thereof (other than any such request in connection with an examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information, and
provided further that in no event shall any Lender be obligated or required to
return any materials furnished by the Borrowers or any of their Subsidiaries.
13.16 Register. The Borrowers hereby designates the Administrative
Agent to serve as the Borrowers' agent, solely for purposes of this Section
13.15, to maintain a register (the "REGISTER") on which it will record the
Commitments from time to time of each of the Lenders, the Loans made by each of
the Lenders and each repayment in respect of the principal amount of the Loans
of each Lender. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrowers' obligations in respect of such
Loans. With respect to any Lender, the transfer of the Commitment of such Lender
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitment shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitment and Loans and prior to such recordation all amounts
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owing to the transferor with respect to such Commitments and Loans shall remain
owing to the transferor. The registration of assignment or transfer of all or
part of any Commitments and Loans shall be recorded by the Administrative Agent
on the Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note evidencing such Loan, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the assigning or transferor Lender and/or the new Lender. The Borrowers agrees
to indemnify the Administrative Agent from and against any and all losses,
claims, damages and liabilities of whatsoever nature which may be imposed on,
asserted against or incurred by the Administrative Agent in performing its
duties under this Section 13.16.
13.17 Limitation on Additional Amounts, Etc. Notwithstanding
anything to the contrary contained in Sections 1.08 or 4.04 of this Agreement,
unless a Lender gives notice to the Borrowers that it is obligated to pay an
amount under any such Section within 150 days after the later of (x) the date
the Lender incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Lender has actual knowledge of its incurrence of
the respective increased costs, Taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction in return on capital, then such
Lender shall only be entitled to be compensated for such amount by the Borrowers
pursuant to said Section 1.08 or 4.04, as the case may be, to the extent (1) the
costs, Taxes, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital are incurred or suffered on or
after the date which occurs 150 days prior to such Lender giving notice to the
Borrowers that it is obligated to pay the respective amounts pursuant to said
Section 1.08 or 4.04, as the case may be, and (II) the notice of such payment is
accompanied by a written statement by the Lenders that such amount is an amount
charged by such Lenders to similarly situated borrowers. This Section 13.17
shall have no applicability to any Section of this Agreement other than said
Sections 1.08 and 4.04.
* * *
78
IN WITNESS WHEREOF, each of the parties hereto has
caused a counterpart of this Agreement to be duly executed and delivered as of
the date first above written.
------------------------------------- --------------------------------------
A.B. DICK COMPANY PARAGON CORPORATE HOLDINGS, INC.
BY: /s/ Xxxxxxx X. Xxxxxx BY: /s/ Xxxxxxx X. Xxxxxx
-------------------------------- --------------------------
TITLE: Secretary TITLE: Secretary
----------------------------- -----------------------
ADDRESS: 0000 Xxxxxxxx Xx. ADDRESS: c/o A.B. Dick Company
Xxxxx, XX 00000 0000 Xxxxxxxx Xx.
Attention: President Xxxxx, XX 00000
Phone: (000) 000-0000 Attention: President
Phone: (000) 000-0000
------------------------------------- --------------------------------------
INTERACTIVE MEDIA GROUP, INC. KEYBANK NATIONAL ASSOCIATION
BY: /s/ Xxxxxxx X. Xxxxxx BY: /s/ Xxxxxxx Xxxxx
-------------------------------- --------------------------
TITLE: Secretary TITLE: Senior Vice President
----------------------------- -----------------------
ADDRESS: c/o A.B. Dick Company ADDRESS: 000 Xxxxxx Xxxxxx
0000 Xxxxxxxx Xx. Xxxxxxxxx, XX 00000
Xxxxx, XX 00000 Att: X. Xxxxx
Attention: President Mailcode OH-01-27-0504
Phone: (000) 000-0000
------------------------------------- --------------------------------------
PRESSTEK, INC. KEYBANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND COLLATERAL
AGENT
BY: /s/ Xxxxxx X. Xxxxxx BY: /s/ Xxxxxxx Xxxxx
-------------------------------- ---------------------------
TITLE: President and CEO TITLE: Senior Vice President
----------------------------- ------------------------
ADDRESS: 00 Xxxxxxxxx Xxxxx ADDRESS: 000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: President Att: X. Xxxxx
Phone: (000) 000-0000 Mailcode OH-01-27-0504
------------------------------------- --------------------------------------
