1
LOAN AGREEMENT
--------------
LASER GRAPHIC SYSTEMS, INCORPORATED ("Borrower"), the banks listed on
the signature pages hereof (each individually "Lender" and collectively
"Lenders"), and PNC BANK, OHIO, NATIONAL ASSOCIATION, as agent for Lenders
("Agent"), hereby agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined herein
will have the meanings given those terms in Section 15, below.
2. CREDIT FACILITIES.
2.1 NON-REVOLVING CREDIT LOAN.
2.1.1 TOTAL FACILITY. Each Lender severally agrees to make,
subject to the terms and conditions and upon the representations and warranties
of Borrower set forth in this Agreement, Revolving Loans to Borrower upon
Borrower's request in an amount not to exceed the Available Commitment of such
Lender. The Revolving Loans will be represented by the promissory notes of
Borrower of even date herewith and all amendments, extensions and renewals
thereto and restatements and replacements thereof (collectively, "Revolving
Credit Notes" or "Notes").
2.2 RATE OF INTEREST.
2.2.1 The outstanding principal balance of the Revolving Loans
will bear interest at a rate per annum equal to the Prime Rate plus 0.5%,
subject to the applicability of the Default Rate. All interest rate calculations
under this Agreement or any Note will be based on a year of 360 days for the
actual number of days in each interest period. In no event will the rate of
interest exceed twenty-five percent (25%) per annum, or the equivalent rate for
a shorter or longer period.
2.3 PAYMENTS. From the date of execution hereof through the Conversion
Date, accrued interest on the Revolving Loans will be due and payable on (i) the
first day of each month, commencing February 1, 1997, and (ii) on the Conversion
Date. Following the Conversion Date, principal will be due and payable in
installments (in an amount deemed sufficient by Lenders to fully and evenly
amortize the principal balance of the Revolving Loans on the Conversion Date
over the remaining term of the Notes) commencing on August 1, 1997 and on the
first day of each month thereafter until the Termination Date, on which date the
entire remaining principal balance and all accrued but unpaid interest on the
Revolving Loans will be due and payable. Accrued interest will be due and
payable on the due date of each principal payment.
2.4 LATE PAYMENTS. Borrower will make each payment hereunder and under
the Notes, as the case may be, not later than 11:00 a.m. (Cincinnati time) on
the day when due by deposit to Agent's Account, in same day funds. Amounts
received by Agent after 11:00 a.m. (Cincinnati time) on any Business Day will be
deemed to have been received on the next Business Day. Subject to the foregoing,
Agent will cause to be distributed to each Lender on the Business Day of receipt
by Agent an amount equal to the amount of such payment then due such Lender.
2
Payments when received will be applied in the following order: (i) to charges,
fees and expenses (including Attorneys Fees), (ii) to accrued interest, and
(iii) to principal. If any payment of principal, interest or other amount due
hereunder is not paid within 15 calendar days of the date due, Borrower also
will pay to Agent, for the benefit of Lenders, a late charge equal to the lesser
of 5% of the amount of such payment or $50. The foregoing charge is imposed for
the purpose of defraying Agent's and Lenders' expenses incident to the handling
of delinquent payments.
2.5 NON-REVOLVING NATURE OF LOANS AND RECORDATION OF ADVANCES. Borrower
may borrow and repay Revolving Loans subject to the terms, conditions and limits
set forth herein but amounts borrowed and repaid may not be reborrowed.
Notwithstanding any of the foregoing to the contrary, Lenders will have no
obligation to make any further advances on or after the Conversion Date. Each
Lender is authorized to record in its books and records the date and amount of
each advance and payment hereunder, and other information related thereto, which
books and records will constitute PRIMA FACIE evidence of the accuracy of the
information so recorded; provided, however, that failure of any Lender to
record, or any error in recording, any such information will not relieve
Borrower of any of its obligations under this Agreement, any Note or any of the
Security Documents.
2.6 ADVANCES.
2.6.1 Borrower will give Agent a Notice of Borrowing with
respect to each Revolving Loan, not later than 11:00 a.m. (Cincinnati time) one
Business Day prior to the proposed borrowing date. Each proposed borrowing date
must be a Business Day and must be prior to the Conversion Date. Agent will give
to each Lender prompt notice thereof by telex, telecopier or cable. Each Notice
of Borrowing will be by telex, telecopier or cable (or by telephonic notice
confirmed in writing by a Notice of Borrowing delivered no later than the close
of business on the day on which such telephonic notice is given), specifying
therein all matters required by such Notice. Each Lender will, before 11:00 a.m.
(Cincinnati time) on the Borrowing Date, make available at Agent's Account, in
same day funds, such Lender's Ratable Portion of such Revolving Loan. After
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth herein, Agent will make such funds available to Borrower by crediting
Borrower's Account.
2.6.2 Each Notice of Borrowing, whether telephonic or written,
will be binding upon and irrevocable by Borrower. No Lender will have any
liability in acting upon any request that such Lender believes in good faith to
have been given on behalf of Borrower and will have no duty to verify the
authenticity of the signature(s) appearing on any written request and no duty to
verify the identity of any person making any telephonic request.
2.6.3 Borrower will use the proceeds of each Revolving Loan
only to finance not more than 90% of the acquisition cost of property and
equipment used in connection with Borrower's business.
- 2 -
3
2.7 ADDITIONAL COSTS.
2.7.1 TAXES, RESERVE REQUIREMENTS, ETC. If any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Lender, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by Lenders with
any guideline, request or directive of any such authority (whether or not having
the force of law), will: (a) affect the basis of taxation of payments to any
Lender of any amounts payable by Borrower under this Agreement (other than taxes
imposed on the overall net income of such Lender, by the jurisdiction, or by any
political subdivision or taxing authority of any such jurisdiction, in which
Lender has its principal office), (b) impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by any Lender, or (c) impose any other
condition with respect to this Agreement, any Note executed in connection with
this Agreement or any of the Security Documents, and the result of any of the
foregoing is to increase the cost of making, funding or maintaining any such
Note or to reduce the amount of any sum receivable by any Lender thereon, then
Borrower will pay to Lenders from time to time, upon request by any Lender, with
a copy of such request to be provided to Agent, additional amounts sufficient to
compensate Lenders for such increased cost or reduced sum receivable.
2.7.2 CAPITAL ADEQUACY. If either: (a) the introduction of, or
any change in, or in the interpretation of, any United States or foreign law,
rule or regulation or (b) compliance with any directive, guidelines or request
from any central bank or other United States or foreign governmental authority
(whether or not having the force of law) promulgated, made, or that becomes
effective (in whole or in part) after the date hereof affects or would affect
the amount of capital required or expected to be maintained by any Lender or any
corporation directly or indirectly owning or controlling any Lender and any
Lender determines that such introduction, change or compliance has or would have
the effect of reducing the rate of return on such Lender's capital or on the
capital of such owning or controlling corporation as a consequence of its
obligations hereunder or under any Note or any commitment to lend thereunder to
a level below that which any Lender or such owning or controlling corporation
could have achieved but for such introduction, change or compliance (after
taking into account such Lender's policies or the policies of such owning or
controlling corporation, as the case may be, regarding capital adequacy) by an
amount deemed by such Lender (in its sole discretion) to be material, then, from
time to time, Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction.
2.7.3 CERTIFICATE OF LENDER. A certificate of any Lender
setting forth such amount or amounts as will be necessary to compensate such
Lender as specified above will be delivered to Borrower and will be conclusive
absent manifest error. Borrower will pay Agent for the account of such Lender
the amount shown as due on any such certificate within 10 days after its receipt
of the same. Failure on the part of any Lender to deliver any such certificate
will not constitute a waiver of such Lender's rights to demand compensation for
any particular period or any future period. The protection of this Section will
be available to Lenders regardless of any
- 3 -
4
possible contention of invalidity or inapplicability of the law, regulation,
etc., that results in the claim for compensation under this Section.
3. COLLATERAL. The Collateral for the repayment of the Obligations will be that
granted pursuant to the Security Documents.
4. REPRESENTATIONS AND WARRANTIES. To induce Lenders to enter into this
Agreement and to make the advances herein contemplated, Borrower hereby
represents and warrants as follows:
4.1 ORGANIZATION. Borrower is a corporation duly organized and in good
standing under the laws of the state of its incorporation, is duly qualified in
all jurisdictions where required by the conduct of its business or ownership of
its assets except where the failure to so qualify would not have a material
adverse effect on its condition, financial or otherwise, and has the power and
authority to own and operate its assets and to conduct its business as is now
done.
4.2 LATEST FINANCIALS. Its financial statements, if any, as delivered
to Lenders are true, complete and accurate in all material respects and fairly
present its financial condition, assets and liabilities, whether accrued,
absolute, contingent or otherwise and the results of its operations for the
periods specified therein. The annual financial statements of all business
entities included in such financial statements have been prepared in accordance
with generally accepted accounting principles applied consistently with
preceding periods subject to any comments and notes contained therein (and
subject in the case of interim statements to normal year-end adjustments).
4.3 RECENT ADVERSE CHANGES. Except as specifically disclosed in the
Disclosure Schedule, since the date of its formation, it has not suffered any
damage, destruction or loss which has materially and adversely affected its
business or assets and no event or condition of any character has occurred which
has materially and adversely affected its assets, liabilities, business or
financial condition, and it has no knowledge of any event or condition which may
materially and adversely affect its assets, liabilities, business or financial
condition.
4.4 RECENT ACTIONS. Except as disclosed in the Disclosure Schedule,
since the date of its formation, its business has been conducted in the ordinary
course and it has not: (a) incurred any obligations or liabilities, whether
accrued, absolute, contingent or otherwise, other than liabilities incurred and
obligations under contracts entered into in the ordinary course of business and
other than liabilities to Lenders; (b) discharged or satisfied any lien or
encumbrance or paid any obligations, absolute or contingent, other than current
liabilities, in the ordinary course of business; (c) mortgaged, pledged or
subjected to lien or any other encumbrance any of its assets, tangible or
intangible, or cancelled any debts or claims except in the ordinary course of
business; or (d) made any loans or otherwise conducted its business other than
in the ordinary course.
4.5 TITLE. It has good and marketable title to its assets, including
but not limited to the Collateral, free and clear from all liens and
encumbrances except for: (a) current taxes and assessments not yet due and
payable, (b) liens and encumbrances, if any, reflected or noted on any balance
sheet delivered to the Agent, (c) any security interests, pledges or mortgages
to Lenders
- 4 -
5
in connection with the closing of this Agreement, (d) assets disposed of in the
ordinary course of business, and (e) Permitted Liens.
4.6 LITIGATION, ETC. Except as disclosed on the Disclosure Schedule, as
of the date hereof, there are no actions, suits, proceedings or governmental
investigations pending or, to its knowledge, threatened against it which, if
adversely determined, could result in a material and adverse change in its
financial condition, business or assets; and there is no basis known to it for
any such actions, suits, proceedings or investigations.
4.7 TAXES. Except as to taxes not yet due and payable, it has filed all
returns and reports that are now required to be filed by it in connection with
any federal, state or local tax, duty or charge levied, assessed or imposed upon
it or its property, including unemployment, social security and similar taxes;
and all of such taxes have been either paid or adequate reserve or other
provision has been made therefor. It has filed for no extension of time for the
payment of any tax or for the filing of any tax return.
4.8 AUTHORITY. It has full power and authority to enter into the
transactions provided for in this Agreement. The documents to be executed by it
in connection with this Agreement, when executed and delivered by it will
constitute the legal, valid and binding obligations of it enforceable in
accordance with their respective terms except as such enforceability may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws in effect from time to time affecting the rights of creditors
generally and except as such enforceability may be subject to general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in law or in equity).
4.9 OTHER DEFAULTS. There does not now exist any default or violation
by it of or under any of the terms, conditions or obligations of: (a) its
Articles of Incorporation or Bylaws; (b) any indenture, mortgage, deed of trust,
franchise, permit, contract, agreement, or other instrument to which it is a
party or by which it is bound; or (c) any material law, regulation, ruling,
order, injunction, decree, condition or other requirement applicable to or
imposed upon it by any law or by any governmental authority, court or agency;
and the transactions contemplated by this Agreement and the Security Documents
will not result in any such default or violation.
4.10 STOCK OF BORROWER. All of the issued and outstanding securities of
Borrower are owned by the parties listed on the Disclosure Schedule in the
amounts specified by the name of each such shareholder and except as listed on
the Disclosure Schedule, Borrower has no outstanding options, warrants or
contracts to issue additional securities of any kind.
4.11 STOCK. Except as listed on the Disclosure Schedule, Borrower does
not own more than one percent (1%) of the issued and outstanding capital stock
or other ownership interests of any corporation, firm or entity.
4.12 SUBSIDIARIES, PARTNERSHIPS AND JOINT VENTURES. Except as listed on
the Disclosure Schedule, Borrower has no Subsidiaries and is not a party to any
partnership agreement or joint venture agreement.
- 5 -
6
4.13 LICENSES, ETC. It has obtained any and all licenses, permits,
franchises or other governmental authorizations necessary for the ownership of
its properties and the conduct of its business. It possesses adequate licenses,
patents, patent applications, copyrights, trademarks, trademark applications,
and trade names to continue to conduct its business as heretofore conducted by
it, without any conflict with the rights of any other person or entity.
4.14 SUFFICIENT CAPITAL. It now has capital sufficient to carry on its
business, all business and transactions in which it is about to engage, and is
now solvent and able to pay its debts as they mature. It now owns property
having a value, both at fair valuation and at present fair saleable value,
greater than the amount required to pay its debts.
4.15 NAME, PLACES OF BUSINESS AND LOCATION OF COLLATERAL. The address
of its principal place of business and every other place from which it conducts
business is as specified in the Disclosure Schedule. The Collateral and all
books and records pertaining to the Collateral are and will be located at the
addresses indicated on the Disclosure Schedule. In the five years preceding the
date hereof, it has not conducted business under any name other than its current
name nor maintained any place of business or any assets in any jurisdiction
other than those disclosed on the Disclosure Schedule. All of the registered
offices from which Borrower conducts or has ever conducted business in Kentucky
are as set forth on the Disclosure Schedule.
4.16 ERISA. It and each of its ERISA Affiliates are in compliance in
all material respects with the applicable provisions of ERISA and the
regulations and published interpretations thereunder. No Reportable Event has
occurred as to which it or any such ERISA Affiliate was required to file a
report with the PBGC, and, as of the Closing Date, the present value of all
benefit liabilities under all the Plans (based on those assumptions used to fund
such Plans) did not, as of the last annual valuation date applicable thereto,
exceed by more than $25,000 the aggregate value of the assets of such Plans.
Neither it nor any such ERISA Affiliate has incurred any Withdrawal Liability
that materially adversely affects the financial condition of it and its ERISA
Affiliates taken as a whole. Neither it nor any such ERISA Affiliate has
received any notification that any Multiemployer Plan is in reorganization or
has been terminated, within the meaning of Title IV of ERISA, and no
Multiemployer Plan is reasonably expected to be in reorganization or to be
terminated, where such reorganization has resulted or can reasonably be expected
to result in an increase in the contributions required to be made to such Plan
that would materially and adversely affect the financial condition of it and its
ERISA Affiliates taken as a whole.
4.17 REGULATION U. No part of the proceeds of the Loan will be used to
purchase or carry any margin stock (as such term is defined in Regulation U of
the Board of Governors of the Federal Reserve System).
4.18 CLOSING MEMO. The information contained in each of the documents
listed on the Closing Memo to be executed or delivered by it or relating to it
is complete and correct in all material respects.
4.19 ENVIRONMENTAL MATTERS.
- 6 -
7
4.19.1 Borrower and the activities or operations on any of the
real estate that Borrower owns or occupies (the "Property") are in compliance in
all material respects with all applicable federal, state and local, statutes,
laws, regulations, ordinances, policies and orders relating to regulation of the
environment, health or safety, or contamination or cleanup of the environment
(collectively "Environmental Laws").
4.19.2 Borrower has obtained all approvals, permits, licenses,
certificates, or satisfactory clearances from all governmental authorities
required under Environmental Laws with respect to the Property and any
activities or operations at the Property.
4.19.3 To the best of Borrower's knowledge, there have not
been and are not now any solid waste, hazardous waste, hazardous or toxic
substances, pollutants, contaminants, or petroleum in, on, under or about the
Property. The use which Borrower makes and intends to make of the Property will
not result in the deposit or other release of any hazardous or toxic substances,
solid waste, pollutants, contaminants or petroleum on, to or from the Property.
4.19.4 To the best of Borrower's knowledge, there have been no
complaints, citations, claims, notices, information requests, orders or
directives on environmental grounds or under Environmental Laws (collectively
"Environmental Claims") made or delivered to, pending or served on, or
anticipated by Borrower or its agents, or of which Borrower or its agents, are
aware or should be aware (i) issued by any governmental department or agency
having jurisdiction over the Property or the activities or operations at the
Property, or (ii) issued or claimed by any third party relating to the Property
or the activities or operations at the Property.
4.19.5 To the best of Borrower's knowledge, no
asbestos-containing materials are installed, used or incorporated into the
Property, and no asbestos-containing materials have been disposed of on the
Property.
4.19.6 To the best of Borrower's knowledge, no polychlorinated
biphenyls ("PCBs") are located at, on or in the Property in the form of
electrical equipment or devices, including, but not limited to, transformers,
capacitors, fluorescent light fixtures with ballasts, cooling oils or any other
device or form.
4.19.7 To the best of Borrower's knowledge, there have not
been and are not now any underground storage tanks located within or about the
Property.
4.19.8 The Property does not contain any wetlands as that term
is defined by relevant governmental agencies under Environmental Laws and, to
the best of Borrower's knowledge, after Due Investigation, there has been no
filling of wetlands on the Property in violation of Environmental Laws.
4.20 LABOR MATTERS. There are no material strikes or other material
labor disputes against it pending or, to its knowledge, threatened. The hours
worked and payment made to its employees in all material respects have not been
in violation of the Fair Labor Standards Act or any other applicable law dealing
with such matters. All payments due from it, or for which any
- 7 -
8
claim may be made against it, on account of wages and employee health and
welfare insurance and other benefits, have been paid or accrued as a liability
on its books. The consummation of the transactions contemplated herein will not
give rise to a right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which it is a party or by
which it is bound.
5. AFFIRMATIVE COVENANTS. From the date of execution of this Agreement until all
Obligations to Lenders have been fully paid and this Agreement terminated,
Borrower will:
5.1 BOOKS, RECORDS AND ACCESS TO THE COLLATERAL. Maintain proper books
of account and other records and enter therein complete and accurate entries and
records of all of its transactions and give representatives of Agent access
thereto at all reasonable times, including permission to examine, copy and make
abstracts from any of such books and records and such other information as it
may from time to time reasonably request. It will give Agent reasonable access
to the Collateral for the purposes of examining the Collateral and verifying its
existence. It will make available to Agent for examination copies of any
reports, statements or returns which it may make to or file with any
governmental department, bureau or agency, federal or state. In addition, it
will cause its officers to be available from time to time upon reasonable notice
to discuss the status of the Loan, its business and any statements, records or
documents furnished or made available to Agent in connection with this
Agreement.
5.2 QUARTERLY STATEMENTS. Furnish each Lender within 30 days after the
end of each calendar quarter internally prepared financial statements of
Borrower with respect to such calendar quarter, which financial statements will:
(a) be in reasonable detail and in form reasonably satisfactory to Agent, (b) be
accompanied by a Compliance Certificate, (c) include a balance sheet as of the
end of such period, profit and loss and surplus statements for such period and a
statement of cash flows for such period, (d) include prior year comparisons and
(e) be on a consolidating and consolidated basis for Borrower and its
Subsidiaries, if any, and for any entity in which Borrower's financial
information is consolidated in accordance with generally accepted accounting
principles.
5.3 ANNUAL STATEMENTS. Furnish each Lender within 90 days after the end
of each fiscal year of Borrower annual audited financial statements which will:
(a) include a balance sheet as of the end of such year, profit and loss and
surplus statements and a statement of cash flows for such year; (b) be on a
consolidated and consolidating basis with Borrower, its Subsidiaries, if any,
and any entity into which Borrower's financial information is consolidated in
accordance with generally accepted accounting principles; (c) be accompanied by
a Compliance Certificate, and (d) contain the unqualified opinion of an
independent certified public accountant acceptable to Lenders and its
examination will have been made in accordance with generally accepted auditing
standards and such opinion will contain a report reasonably satisfactory to
Lenders of any inconsistency in the application of generally accepted accounting
principles with the preceding years' statements, if any.
- 8 -
9
5.4 AUDITOR'S LETTERS, ETC. Furnish to Agent any letter, other than
routine correspondence, directed to it by its auditors or independent
accountants, relating to its financial statements, accounting procedures,
financial condition, tax returns or the like.
5.5 TAXES. Pay and discharge when due all indebtedness and all taxes,
assessments, charges, levies and other liabilities imposed upon it, its income,
profits, property or business, except those which currently are being contested
in good faith by appropriate proceedings and for which it has set aside adequate
reserves or made other adequate provision with respect thereto, but any such
disputed item will be paid forthwith upon the commencement of any proceeding for
the foreclosure of any lien which may have attached with respect thereto, unless
Lender has received an opinion in form and substance and from legal counsel
acceptable to it that such proceeding is without merit.
5.6 OPERATIONS. Continue its business operations in substantially the
same manner as at present, except where such operations are rendered impossible
by a fire, strike or other events beyond its control; keep its real and personal
properties in good operating condition and repair; make all necessary and proper
repairs, renewals, replacements, additions and improvements thereto and comply
with the provisions of all leases to which it is party or under which it
occupies or holds real or personal property so as to prevent any loss or
forfeiture thereof or thereunder.
5.7 INSURANCE. Comply with the insurance requirements of the Security
Documents. In addition to the foregoing, keep its insurable real and personal
property insured with responsible insurance companies against loss or damage by
fire, windstorm and other hazards which are commonly insured against in an
extended coverage endorsement in an amount equal to not less than 80% of the
insurable value thereof on a replacement cost basis and also maintain public
liability insurance in a reasonable amount. In addition, the parties delivering
to Agent insurance certificates as listed on the Closing Memo will maintain
extended liability insurance and property insurance of at least the amounts and
coverages listed on such certificates delivered in connection with the Closing
and in a form and with companies reasonably satisfactory to Agent.
Notwithstanding the foregoing, such property insurance will at all times be in
an amount so that such party will not be deemed a "co-insurer" under any
co-insurance provisions of such policies. All such insurance policies will name
Lender as an additional insured and, where applicable, as lender's loss payee
under a loss payable endorsement satisfactory to Agent. All such policies will
provide that ten (10) days prior written notice must be given to Agent before
such policy is altered or cancelled. Schedules of all insurance will be
submitted to Agent upon request. Such schedules will contain a description of
the risks covered, the amounts of insurance carried on each risk, the name of
the insurer and the cost of such insurance. Such schedules will be supplemented
from time to time promptly to reflect any change in insurance coverage.
5.8 COMPLIANCE WITH LAWS. Comply with all laws and regulations
applicable to it and to the operation of its business, including without
limitation those relating to environmental and health matters, and do all things
necessary to maintain, renew and keep in full force and effect all rights,
permits, licenses, certificates, satisfactory clearances and franchises
necessary to enable it to continue its business.
- 9 -
10
5.9 ENVIRONMENTAL VIOLATIONS.
5.9.1 If any hazardous or toxic substances, pollutants,
contaminants, solid waste or hazardous waste, or petroleum are released (as that
term is defined under Environmental Laws) at the Property, or are otherwise
found to be in, on, under or about the Property in violation of Environmental
Laws or in excess of cleanup levels established under Environmental Laws,
immediately will notify Lender in writing and will commence such action as may
be required with respect to such items, including, but not limited to, removal
and cleanup thereof, and deposit with Agent cash collateral, letter of credit,
bond or other assurance of performance in form, substance and amount reasonably
acceptable to Lender to cover the cost of such action. Upon request, Borrower
will provide Lender with updates on the status of Borrower's actions to resolve
or otherwise address such items.
5.9.2 In the event Borrower receives notice of an
Environmental Claim from any governmental agency or other third party alleging a
violation of or liability under Environmental Laws with respect to the Property
or Borrower's activities or operations at the Property, immediately notify Agent
in writing and will commence such action as may be required with respect to such
Environmental Claim. Upon request, Borrower will provide Agent with updates on
the status of Borrower's actions to resolve or otherwise address such
Environmental Claim.
5.10 ENVIRONMENTAL AUDIT AND OTHER ENVIRONMENTAL INFORMATION. Provide
copies of all environmental reports, audits, studies, data, results, and
findings obtained by it from work conducted by it or any other person or entity
(including, but not by way of limitation, the United States Environmental
Protection Agency and any state Environmental Protection Agency and their
agents, representatives, and contractors) on its property or property adjacent
thereto as soon as such reports, audits, studies, data, results, and findings
become available to it. If the submissions are considered inadequate or
insufficient in order for Agent to adequately consider the status of
environmental compliance by it or if the submissions are in error, then Agent
may require Borrower, at Borrower's sole expense, to engage an independent
engineering firm acceptable to Agent to conduct a complete environmental report,
study, finding or audit in as timely a fashion as is reasonably possible. In
addition, Borrower will provide Agent with information related to remedial
action at its property or adjacent to its property as soon as such information
becomes available to it (such information will include but not be limited to a
copy of the Remedial Investigation/Feasibility Study for that property).
5.11 BUSINESS NAMES AND LOCATIONS. Immediately notify Agent of any
change in the name under which it conducts its business and, unless Agent
otherwise consents in writing, keep and maintain all of the Collateral supplied
by it only at its addresses listed in the Disclosure Schedule, keep its
principal place of business at the address specified in the Disclosure Schedule
and notify Agent immediately upon the opening or closing of any place from which
it conducts business.
5.12 ACQUISITION OF ASSETS. Not acquire any assets, real or personal,
unless such assets are automatically covered by the existing Loan Documents or
within 10 days of such acquisition,
- 10 -
11
Borrower delivers to Agent a mortgage, pledge or security agreement to encumber
such asset in favor of Lenders.
5.13 ACCOUNTS. So long as the Loan is in effect, maintain Agent as
Borrower's primary bank of account, and Borrower will maintain all operating
accounts at Agent.
5.14 ERISA COMPLIANCE. Comply in all material respects with the
applicable provisions of ERISA and furnish to Agent: (i) as soon as possible,
and in any event within 30 days after any officer of it or any ERISA Affiliate
knows or has reason to know that any Reportable Event has occurred that alone or
together with any other Reportable Event could reasonably be expected to result
in liability of it to the PBGC in an aggregate amount exceeding $25,000, a
statement of a financial officer setting forth details as to such Reportable
Event and the action that it proposes to take with respect thereto, together
with a copy of the notice of such Reportable Event, if any, given to the PBGC,
(ii) promptly after receipt thereof, a copy of any notice it or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC to
terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate
which is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Code Section 414) or to appoint a trustee to administer any such Plan, (iii)
within 10 days after the due date for filing with the PBGC pursuant to Section
412(n) of the Code of a notice of failure to make a required installment or
other payment with respect to a Plan, a statement of its financial officer
setting forth details as to such failure and the action that it proposes to take
with respect thereto together with a copy of any such notice given to the PBGC
and (iv) promptly and in any event within 30 days after receipt thereof by
Borrower or any ERISA Affiliate from the sponsor of a Multiemployer Plan, a copy
of each notice received by Borrower or any ERISA Affiliate concerning (A) the
imposition of Withdrawal Liability in an amount exceeding $25,000, or (B) a
determination that a Multiemployer Plan is, or is expected to be, terminated or
in reorganization, both within the meaning of Title IV of ERISA, and which, in
each case, is expected to result in an increase in annual contributions of it or
an ERISA Affiliate to such Multiemployer Plan in an amount exceeding $25,000.
5.15 NOTICE OF DEFAULT. Notify Agent in writing within five days after
it knows or has reason to know of the occurrence of an Event of Default.
5.16 SALE AND LEASEBACK. Not directly or indirectly enter into any
arrangement to sell or transfer all or any part of its assets then owned by it
and thereupon or within one year thereafter rent or lease any of the assets so
sold or transferred.
5.17 LINE OF BUSINESS. Not enter into any lines or areas of business
substantially different from the business or activities in it is presently
engaged.
5.18 BUSINESS OPPORTUNITIES. Not divert (or permit anyone to divert)
any of its business or opportunities to any other corporate or business entity
in which it or its Subsidiaries may hold a direct or indirect interest.
5.19 WAIVERS. Not waive any right or rights of substantial value which,
singly or in the aggregate, is or are material to its condition (financial or
other), properties or business.
- 11 -
12
6. NEGATIVE COVENANTS. From the date of execution of this Agreement until all of
the Obligations have been fully paid and this Agreement terminated, Borrower
will not:
6.1 DEBT. Incur any Indebtedness other than: (a) the Loans and any
subsequent Indebtedness to Lender; (b) open account obligations incurred in the
ordinary course of business having maturities of less than 90 days; and (c)
rental and lease payments for real or personal property whose aggregate annual
rental payments, when combined with the annual rental payments of Multi-Color
Corporation, would exceed $600,000 when added to Borrower's rental or lease
agreements existing on the date hereof.
6.2 LIENS. Incur, create, assume, become or be liable in any way, or
suffer to exist any Lien on any of its assets, now or hereafter owned, other
than Permitted Liens.
6.3 GUARANTEES. Guarantee, endorse or become contingently liable for
the obligations of any person, firm or corporation, except in connection with
the endorsement and deposit of checks in the ordinary course of business for
collection.
6.4 CAPITAL EXPENDITURES. Make capital expenditures or acquisitions,
including the capitalized value of any leases in the aggregate, which, when
calculated in accordance with generally accepted accounting principles and when
combined with the capital expenditures and acquisitions of Multi-Color
Corporation, would exceed (i) $3,200,000 in the aggregate during fiscal year
1997, (ii) $2,600,000 in the aggregate during fiscal year 1998, and (iii)
$1,800,000 in the aggregate during any fiscal year thereafter. Unexpended
amounts from the prior fiscal year may not be carried forward to the next fiscal
year.
6.5 DIVIDENDS. Declare or pay any payment or dividends of any kind
other than dividends payable solely in shares of its capital stock (including
without limitation debt repayment, payment for goods and services) to any
Affiliate, other than Multi-Color Corporation, or any person related to any
Affiliate, except for reasonable salary and bonus payments to its employees and
except for the current 5% royalty payments to Think Laboratory Co. Ltd.
6.6 ADDITIONAL SECURITIES. Issue any additional securities of any
description or issue warrants, options or rights to purchase its securities.
6.7 REDEMPTIONS. Purchase, retire, redeem or otherwise acquire for
value, directly or indirectly, any shares of its capital stock now or hereafter
outstanding.
6.8 INVESTMENTS. Purchase or hold beneficially any stock, other
securities or evidences of indebtedness of, or make any investment or acquire
any interest whatsoever in, any other person, firm or corporation other than
short term investments of excess working capital invested in one or more of the
following: (a) investments (of one year or less) in direct or guaranteed
obligations of the United States, or any agencies thereof; (b) investments (of
one year or less) in certificates of deposit of banks or trust companies
organized under the laws of the United States or any jurisdiction thereof,
provided that such banks or trust companies are insured by the Federal
- 12 -
13
Deposit Insurance Corporation and have capital in excess of $150,000,000; and
(c) money market mutual funds with average maturities of less than 90 days.
6.9 MERGER, ACQUISITION OR SALE OF ASSETS. Merge or consolidate with or
into any other entity or acquire all or substantially all the assets of any
person, firm, partnership, joint venture or corporation, or sell, lease or
otherwise dispose of any of its assets except for dispositions in the ordinary
course of business.
6.10 ADVANCES AND LOANS. Lend or commit to lend money, give credit or
make advances (other than advances not to exceed $2,500 for any one employee and
other reasonable and ordinary advances to cover reasonable expenses of
employees, such as travel expenses) to any Person, including, without
limitation, Affiliates.
6.11 SUBSIDIARIES. Acquire any Subsidiaries, create any Subsidiaries or
enter into any partnership or joint venture agreements.
6.12 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate unless such transaction is
otherwise permitted under this Agreement, is in the ordinary course of its
business, and is on fair and reasonable terms no less favorable to it than it
would obtain in a comparable arm's length transaction with a non-Affiliate.
6.13 POST-CLOSING MATTERS. Fail to deliver to Agent in form and
substance satisfactory to Agent the documents, if any, noted as post-closing
items on the Closing Memo on or before the date specified in the Closing Memo.
6.14 TRANSFER OF COLLATERAL. Transfer, or permit the transfer, to
another location of any of the Collateral or the books and records related to
any of the Collateral outside of the counties of the addresses listed on the
Disclosure Schedule; provided, however, that Borrower may transfer Collateral or
the books and records related thereto to another county with the prior written
consent of Agent and if Borrower has provided to Agent prior to such transfer an
opinion addressed to Agent in the form and substance and written by counsel
acceptable to Agent to the effect that the perfection and priority of Agent's
security interest in the Collateral will not be affected by such move or if it
will be affected, setting forth the steps necessary to continue the perfection
and priority of Agent's security interest together with the commencement of such
steps by Borrower at its expense.
6.15 If Borrower receives notice of an Environmental Claim from any
governmental agency or other third party alleging a violation of or liability
under Environmental Laws with respect to the Property or Borrower's activities
or operations at the Property, immediately notify Lender in writing and will
commence such action as may be required with respect to such Environmental
Claim. Upon request, Borrower will provide Lender with updates on the status of
Borrower's actions to resolve or otherwise address such Environmental Claim.
- 13 -
14
7. EVENTS OF DEFAULT. Upon the occurrence of any of the following events with
respect to Borrower or any guarantor:
7.1 NON-PAYMENT. The non-payment of any principal amount of any Note
when due, whether by acceleration or otherwise, or the nonpayment of any
interest upon any Note or any other amount due Lender pursuant to this Agreement
within 5 days of when the same is due;
7.2 COVENANTS. The default in the due observance of any affirmative
covenant or agreement to be kept or performed by it under the terms of this
Agreement or any of the Security Documents and the failure or inability of it to
cure such default within 30 days of the occurrence thereof; provided that such
30 day grace period will not apply to: (a) any default which in Lender's good
faith determination is incapable of cure, (b) any default that has previously
occurred, (c) any default in any negative covenants, or (d) any failure to
maintain insurance or to permit inspection of the Collateral or of its books and
records;
7.3 REPRESENTATIONS AND WARRANTIES. Any representation or warranty made
by it in this Agreement, in any of the Security Documents or in any report,
certificate, opinion, financial statement or other document furnished in
connection with the Obligations is false or erroneous in any material respect or
any material breach thereof has been committed;
7.4 OBLIGATIONS. Except as provided in Sections 7.1, 7.2 and 7.3 above,
the default by it in the due observance of any covenant, negative covenant or
agreement to be kept or performed by it under the terms of this Agreement, the
Security Documents or any document now or in the future executed in connection
with any of the Obligations and the lapse of any applicable cure period provided
therein with respect to such default, or, if so defined therein, the occurrence
of any Event of Default or Default (as such terms are defined therein);
7.5 RELATED LOAN. The occurrence of any Default or Event of Default (as
defined therein) under the Second Amended and Restated Credit, Reimbursement and
Security Agreement of even date herewith among Multi-Color Corporation, Lenders
and Agent, or under any Note or Loan Document (as defined therein) relating
thereto;
7.6 BANKRUPTCY, ETC. It: (a) dissolves or is the subject of any
dissolution, a winding up or liquidation; (b) makes a general assignment for the
benefit of creditors; or (c) files or has filed against it a petition in
bankruptcy, for a reorganization or an arrangement, or for a receiver, trustee
or similar creditors' representative for its property or assets or any part
thereof, or any other proceeding under any federal or state insolvency law, and
if filed against it, the same has not been dismissed or discharged within 60
days thereof;
7.7 EXECUTION, ATTACHMENT, ETC. The commencement of any foreclosure
proceedings, proceedings in aid of execution, attachment actions, levies
against, or the filing by any taxing authority of a lien against it or against
any of the Collateral, except those liens being diligently contested in good
faith which in the aggregate do not exceed $25,000;
- 14 -
15
7.8 LOSS, THEFT OR SUBSTANTIAL DAMAGE TO THE COLLATERAL. In addition to
the rights of Agent to deal with proceeds of insurance as provided in the
Security Documents, the loss, theft or substantial damage to the Collateral if
the result of such occurrence (singly or in the aggregate) is the failure or
inability to resume substantially normal operation of its business within 30
days of the date of such occurrence;
7.9 JUDGMENTS. Unless in the opinion of Agent adequately insured or
bonded, the entry of a final judgment for the payment of money involving more
than $25,000 against it and the failure by it to discharge the same, or cause it
to be discharged, within 10 days from the date of the order, decree or process
under which or pursuant to which such judgment was entered, or to secure a stay
of execution pending appeal of such judgment; the entry of one or more final
monetary or non-monetary judgments or order which, singly or in the aggregate,
does or could reasonably be expected to: (a) cause a material adverse change in
the value of the Collateral or its condition (financial or otherwise),
operations, properties or prospects, (b) have a material adverse effect on its
ability to perform its obligations under this Agreement or the Security
Documents, or (c) have a material adverse effect on the rights and remedies of
Agent or Lenders under this Agreement, any Note or any Security Document;
7.10 REVOCATION OF GUARANTEE. The revocation or attempted revocation or
limitation in whole or in part of any Guarantee;
7.11 IMPAIRMENT OF SECURITY. (a) The validity or effectiveness of any
Security Document or its transfer, grant, pledge, mortgage or assignment by the
party executing it in favor of Agent is impaired; (b) any party to a Security
Document asserts that any Security Document is not a legal, valid and binding
obligation of it enforceable in accordance with its terms; (c) the security
interest or lien purporting to be created by any of the Security Documents
ceases to be or is asserted by any party to any Security Document (other than
Agent) not to be a valid, perfected lien subject to no liens other than liens
not prohibited by this Agreement or any Security Document; or (d) any Security
Document is amended, subordinated, terminated or discharged, or any person is
released from any of its covenants or obligations except to the extent that
Agent expressly consents in writing thereto; or
7.12 OTHER INDEBTEDNESS. A default with respect to any evidence of
Indebtedness in excess of $25,000 by it (other than to Lenders pursuant to this
Agreement), if the effect of such default is to accelerate the maturity of such
Indebtedness or to permit the holder thereof to cause such Indebtedness to
become due prior to the stated maturity thereof, or if any Indebtedness of it in
excess of $25,000 for borrowed money (other than to Lenders pursuant to this
Agreement) is not paid when due and payable, whether at the due date thereof or
a date fixed for prepayment or otherwise (after the expiration of any applicable
grace period);
then immediately upon the occurrence of any of the events described in SECTION
7.6 and at the option of Agent upon the occurrence of any other Event of
Default, the Loan, all Notes and all other Obligations immediately will mature
and become due and payable without presentment, demand, protest or notice of any
kind which are hereby expressly waived. After the occurrence of any Event of
Default, Lenders are authorized without notice to anyone to offset and apply to
- 15 -
16
all or any part of the Obligations all moneys, credits and other property of any
nature whatsoever of Borrower now or at any time hereafter in the possession of,
in transit to or from, under the control or custody of, or on deposit with
(whether held by Borrower individually or jointly with another party), any
Lender or any Affiliate of any Lender. The rights and remedies of Lenders upon
the occurrence of any Event of Default will include but not be limited to all
rights and remedies provided in the Security Documents and all rights and
remedies provided under applicable law. In furtherance but not in limitation of
the foregoing, upon the occurrence of an Event of Default, Lenders may refuse to
make any further advances under the Revolving Loans. Borrower waives any
requirement of marshalling of the assets covered by the Security Documents upon
the occurrence of any Event of Default.
Upon or at any time after the occurrence of an Event of Default,
Lenders, or Agent on behalf of Lenders, may request the appointment of a
receiver of the Collateral. Such appointment may be made without notice, and
without regard to (i) the solvency or insolvency, at the time of application for
such receiver, of the person or persons, if any, liable for the payment of the
Obligations; and (ii) the value of the Collateral at such time. Such receiver
will have the power to take possession, control and care of the Collateral and
to collect all accounts resulting therefrom. Notwithstanding the appointment of
any receiver, trustee, or other custodian, Lenders will be entitled to the
possession and control of any cash, or other instruments at the time held by, or
payable or deliverable under the terms of this Agreement or any Security
Documents to Lenders or Agent.
8. INTERCREDITOR LIEN AND PAYMENT PROVISIONS.
8.1 LIEN PRIORITY.
8.1.1 Borrower has granted to Agent, for the benefit of
Lenders, a lien on and security interest in the Collateral to secure payment of
the Obligations. Notwithstanding the date, manner or order of perfection,
attachment or filing, all pledges, liens and security interests of any kind that
any Lender now has or hereafter acquires in any or all of the Collateral, are
and will be subordinate, inferior and subject to the pledges, liens and security
interests of Agent for the benefit of Lenders in the Collateral.
8.1.2 No Lender will take any action with respect to
foreclosure or repossession of the Collateral upon an Event of Default without
the prior written consent of all Lenders, so long as this Agreement is in effect
or any obligations exist between Borrower and Lenders pursuant thereto or
pursuant to the Security Documents. Lenders will cooperate with each other with
regard to all such actions with respect to the Collateral and in all events,
sums due and owing Lenders under this Agreement, the Obligations or the other
Security Documents will be paid out of any amounts realized upon any disposition
or other transfer of the Collateral prior to the application thereof to any
other obligation of Borrower to any Lender.
- 16 -
17
8.2 SHARING OF PAYMENTS, ETC.
8.2.1 Except as otherwise expressly required by the terms of
this Agreement, each payment or prepayment of principal, interest, fees,
expenses and other charges under the Loans will be applied pro-rata among
Lenders in accordance with their respective Ratable Portions applicable thereto.
8.2.2 If any Lender at any time obtains any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of Revolving Loans owing to it under the terms of this
Agreement in excess of its Ratable Portion, such Lender will forthwith purchase
from the other Lenders, such participations in the Revolving Loans owing to them
as will be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender will be rescinded and such Lender will repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required payment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.
8.2.3 Borrower and Lenders further acknowledge that Agent will
not be obligated to make any Revolving Loans to the extent that any of the other
Lenders do not contribute their Ratable Portion of any Revolving Loan.
8.2.4 Each Lender's Ratable Portion of any payment hereunder
will be reduced to the extent that such Lender has not contributed its Ratable
Portion of any amount owing to Agent hereunder.
8.2.5 Each Lender's obligation to purchase participation
interests pursuant to this Agreement will be absolute and unconditional.
8.2.6 Each Lender will be entitled to receive from Agent its
Ratable Portion of interest on Revolving Loans of such Lender only as calculated
based upon funds actually received by Agent from each Lender by 11:00 a.m.
(Cincinnati time) on the day due from such Lender. Funds received by Agent after
such cut off time will be treated as having been received by Agent on the next
Business Day following the day on which received.
8.2.7 To the extent that Agent will have advanced funds
hereunder on a day prior to receipt by Agent of a Lender's Ratable Portion of
such advance, interest accrued and paid on such unfunded sums will be for the
account of Agent.
- 17 -
18
8.3 RECEIPT OF PAYMENTS BY LENDERS. Should any payment or distribution
not permitted by the provisions of this Agreement be received by any Lender upon
or with respect to all or any part of the Notes, Obligations and/or the
Collateral prior to the full payment and satisfaction of the Obligations in the
priority set forth in this Section and the termination of all financing
arrangements between Lenders and Borrower, such Lender will deliver the same to
Agent in precisely the form received (except for the endorsement or assignment
of Lender where necessary), for application to the Obligations (whether due or
not due in such order and manner as set forth herein), and, until so delivered,
the same will be held in trust by such Lender as property of Agent on behalf of
all Lenders. In the event of the failure of any Lender to make any such
endorsement or assignment, Agent on behalf of all Lenders, or any of its
officers or employees on behalf of Agent on behalf of all Lenders, is hereby
irrevocably authorized in its own name or in the name of Lenders to make the
same, and is hereby appointed each Lender's attorney-in-fact for those purposes,
that appointment being coupled with an interest and irrevocable.
8.4 DISTRIBUTIONS, ETC. In the event of any distribution, division or
application, partial or complete, voluntary or involuntary, by operation of law
or otherwise, of all or any part of the assets of Borrower or the proceeds
thereof to creditors of Borrower or to any indebtedness, liabilities and
obligations of Borrower, or upon any liquidation, dissolution or other winding
up of Borrower or Borrower's business, or in the event of any sale (singly or in
the aggregate) of all or any substantial part of the assets of Borrower, or in
the event of any receivership, insolvency or bankruptcy proceeding, or
assignment for the benefit of creditors, or any proceeding by or against
Borrower for any relief under any bankruptcy or insolvency law or other laws
relating to the relief of debtors, readjustment of indebtedness, reorganization,
compositions or extensions, then and in any such event any payment or
distribution of any kind or character, either in cash, securities or other
property, whether or not on account of the Collateral, which will be payable or
deliverable upon or with respect to all or any part of the Obligations will be
paid or delivered directly to Agent for application to the Obligations (whether
due or not due in order and manner as set forth herein) until the Obligations
will have been fully paid and satisfied. Lenders hereby irrevocably authorize
and empower Agent to demand, xxx for, collect and receive every such payment or
distribution and give acquittance therefor and to file claims and take such
other proceedings in Agent's own name or in the name of Lenders or otherwise, as
Agent may deem necessary or advisable to carry out the provisions of this
Section. Lenders hereby agree to execute and deliver to Agent such limited
powers of attorney, assignments, endorsements or other instruments as may be
requested by Agent in order to enable Agent to enforce any and all claims upon
or with respect to the Obligations and/or the Collateral, and to collect and
receive any and all payments or distributions which may be payable or
deliverable at any time upon or with respect to the Obligations and/or the
Collateral.
8.5 BENEFIT. The provisions of this Section are solely for the benefit
of Lenders, and may at any time or times be changed by Lenders as they may elect
without necessity of notice to or consent or approval by Borrower or any other
Person; and neither Borrower nor any other Person will have any right to rely on
or enforce any of the provisions hereof.
9. CONDITIONS PRECEDENT.
- 18 -
19
9.1 AT CLOSING. Lenders' obligation to make any Revolving Loan is
conditioned upon the receipt by Agent of all documents in form and substance
acceptable to Agent listed on the Closing Memo, except for those specifically
listed thereon as post-closing items.
9.2 ADDITIONAL ADVANCES. Lenders' obligations to make any Revolving Loan
and/or any advance under any Note on any date in the future (to the extent that
there are funds remaining to be disbursed hereunder or under any Note) are
subject to the conditions precedent that:
9.2.1 NO DEFAULTS. There does not exist any Event of Default,
nor any event which upon notice or lapse of time or both would constitute an
Event of Default.
9.2.2 ACCURACY. The representations and warranties contained in
this Agreement, the Security Documents, and in each document listed on the
Closing Memo and in any document delivered in connection therewith will be true
and accurate on and as of such date, except as such warranties and
representations may be affected by: (a) this Agreement or transactions
contemplated thereby, and (b) events occurring after the Closing Date as to
those representations and warranties relating to Borrower's financial
statements.
9.2.3 OTHER DOCUMENTS. Agent will have received such other
documents, instruments, opinions, certificates or items of information which it
may have reasonably required in connection with the transactions provided for in
this Agreement.
9.3 BORROWING REPRESENTATIONS. Each borrowing by Borrower hereunder will
constitute a representation and warranty by Borrower as of the date of such
borrowing that the conditions set forth in SECTION 9.2 have been satisfied.
10. CLOSING EXPENSES. Borrower will pay Agent for the benefit of Lenders
immediately upon the execution of this Agreement a reasonable sum for expenses
and Attorneys Fees incurred by Lenders in connection with the preparation,
execution and delivery of this Agreement and the attendant documents and the
consummation of the transactions contemplated hereby together with all: (a)
recording fees and taxes; (b) survey, appraisal and environmental report
changes; and (c) title search and title insurance charges, including any stamp
or documentary taxes, charges or similar levies which arise from the payment
made hereunder or from the execution, delivery or registration or any Security
Document or this Agreement. If Borrower fails to pay such fees, Lenders are
entitled to disburse such sums as an advance under any Note.
11. POST-CLOSING EXPENSES. To the extent that Agent or any Lender incurs any
costs or expenses in protecting or enforcing its rights in the Collateral or
observing or performing any of the conditions or obligations of Borrower or any
Guarantor thereunder, including but not limited to Attorneys Fees in connection
with litigation, preparation of amendments or waivers, present or future stamp
or documentary taxes, charges or similar levies which arise from any payment
made hereunder or from the execution, delivery or registration of any Security
Document or this Agreement, such costs and expenses will be due on demand, will
be included in the Obligations and will bear interest from the incurring or
payment thereof at the Default Rate.
- 19 -
20
12. REPRESENTATIONS AND WARRANTIES TO SURVIVE. All representations, warranties,
covenants, indemnities and agreements made by Borrower herein and in the
Security Documents will survive the execution and delivery of this Agreement,
the Security Documents and the issuance of any Notes.
13. ENVIRONMENTAL INDEMNIFICATION. No Lender will be deemed to assume any
liability or obligation for loss, damage, fines, penalties, claims or duties to
clean-up or dispose of wastes or materials on or relating to the Property merely
by conducting any inspections of the Property or by obtaining title to the
Property by foreclosure, deed in lieu of foreclosure or otherwise. Borrower,
including its successors and assigns, agrees to remain fully liable and will
indemnify, defend and hold harmless Lenders, their respective directors,
officers, employees, agents, contractors, subcontractors, licensees, invitees,
successors and assigns, from and against any claims, demands, judgments,
damages, actions, causes of action, injuries, administrative orders,
liabilities, costs, expenses, clean-up costs, waste disposal costs, litigation
costs, fines, penalties, damages and other related liabilities arising from (i)
the failure of Borrower to perform any obligation herein required to be
performed by Borrower, (ii) the removal or other remediation of hazardous or
toxic substances, hazardous wastes, pollutants or contaminants, solid waste or
petroleum at or from the Property, (iii) the removal or other abatement of any
asbestos-containing material from the Property (or if removal is prohibited by
law, the taking of whatever action is required by law, including without
limitation, the implementation of any required operation or maintenance
program), (iv) any act or omission, event or circumstance existing or occurring
resulting from or in connection with the ownership, construction, occupancy,
operation, use and/or maintenance of the Property, (v) any and all claims or
proceedings (whether brought by private party or governmental agency) for bodily
injury, property damage, abatement or remediation, environmental damage or
impairment and any other injury or damage resulting from or relating to any
hazardous or toxic substances, hazardous waste, pollutants, contaminants, solid
waste, or petroleum located upon or migrating into, from or through the Property
(whether or not any or all of the foregoing was caused by Borrower or its tenant
or subtenant, or a prior owner of the Property or its tenant or subtenant, or
any third party and whether or not the alleged liability is attributable to the
handling, storage, generation, transportation or disposal of such material or
the mere presence of such material on the Property), and (iv) Borrower's breach
of any representation or warranty contained in this Section. Without limitation,
the foregoing indemnities will apply to Lenders with respect to claims, demands,
losses, damages (including consequential damages), liabilities, causes of
action, judgments, penalties, costs and expenses (including reasonable
attorneys' fees and court costs) which in whole or in part are caused by or
arise out of the negligence of any Lender. Such indemnity, however, will not
apply to any Lender to the extent the subject of the indemnification is caused
by or arises out of the gross negligence or willful misconduct of such Lender.
All environmental representations, warranties, covenants, and indemnities will
continue indefinitely and may not be cancelled or terminated except by a writing
signed by Lenders specifically referring to this Section. Notwithstanding
anything contained to the contrary in any Note, this Agreement, or other
document evidencing or securing the Obligations, the provisions of this Section
will survive the termination or expiration of the Obligations, the full
repayment of the Obligations, or the acquiring of title by any Lender or its
successors and assigns by foreclosure, deed in lieu of foreclosure or otherwise,
and will be fully enforceable against Borrower and its successors and assigns.
The provisions of this Section will
- 20 -
21
constitute a separate undertaking by Borrower and will be an inducement to
Lenders in extending the Obligations to Borrower. The provisions of this Section
will not be subject to any anti-deficiency or similar laws.
14. AGENT.
14.1 AUTHORIZATION AND ACTION. Each Lender hereby appoints and
irrevocably authorizes Agent to take such action as agent on its behalf and to
exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof or thereof, together
with such powers as are reasonably incidental thereto. Without limitation of the
foregoing, each Lender hereby expressly authorizes Agent to execute, deliver and
perform its obligations hereunder and under each of the Loan Documents to which
Agent is a party, and to exercise hereunder or thereunder all rights, powers and
remedies that Agent may have hereunder or thereunder. Each Lender agrees that
any action taken by Agent in accordance with the provisions of this Agreement or
the Security Documents, and the exercise by Agent of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, will be authorized and binding upon all Lenders. As to any matters not
expressly provided for hereunder or by the Security Documents (including,
without limitation, enforcement or collection of the Obligations), Agent will
not be required to exercise any discretion or take any action, but will be
required to act or to refrain from acting (and will be fully protected in so
acting or refraining from acting) upon the instructions of the Lenders, and such
instructions will be binding upon all Lenders. The duties of Agent will be
mechanical and administrative in nature and Agent will have no fiduciary
relationship in respect of any Lender. If Agent requests instructions from any
Lender with respect to any act or failure to act in connection with this
Agreement, the Credit Facilities or any of the Security Documents, Agent will be
entitled to refrain from such act or taking such action unless and until Agent
has received instructions and Agent will have no liability to any Person or
Lender by reason of so refraining. Agent will not be required to take any action
which exposes Agent to personal liability or is contrary to this Agreement, any
Security Document or applicable law.
14.2 AGENT'S RELIANCE, ETC. Neither Agent, any Affiliate of Agent, nor
any of their respective directors, officers, agents, employees, attorneys or
consultants will be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement, any of the Obligations, any of
the Collateral or any Security Document, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, Agent: (a) may consult with legal counsel (including counsel for
Borrower), independent public accountants and other experts selected by it and
will not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (b)
makes no warranty or representation to any Lender and will not be responsible to
any Lender for any statements, warranties or representations made in or in
connection with this Agreement, any Note or any Security Document; (c) will not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement, the Obligations or
any Security Document on the part of Borrower or as to the existence or possible
existence of any Default or Event of Default or to inspect the property
- 21 -
22
(including the books and records) of Borrower; (d) will not be responsible to
any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Obligations or any
Security Document or any other instrument or document furnished pursuant
thereto; (e) will have no obligation to any Person to assure that the Collateral
exists or is owned by Borrower or is cared for, protected or insured or has been
encumbered or that the liens granted to Agent pursuant to the Security Documents
have been created, perfected, protected or enforced or are entitled to any
particular priority or to exercise at all or in any particular manner or under
any duty of care any right, authority or power in respect of the Collateral; and
(f) will incur no liability under or in respect of this Agreement, the
Obligations or any Security Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone, telegram,
cable, telecopy or telex) believed by it to be genuine and signed or sent by the
proper party or parties. Agent will not be liable for any apportionment or
distribution of payments made by it in good faith pursuant to this Agreement,
and if any such apportionment or distribution is subsequently determined to have
been made in error the sole recourse of any Person to whom payment was due, but
not made, will be to recover from the recipients of such payments any payment in
excess of the amount to which they are determined to have been entitled.
14.3 AGENT AND ITS AFFILIATES. With respect to the Revolving Loans made
by it, the Notes issued to it, and the Collateral, Agent will have the same
rights and powers under the Security Documents as any other Lender and may
exercise the same as though it were not Agent; and the term "Lender" or
"Lenders" will, unless otherwise expressly indicated, include Agent in its
individual capacity. Agent and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with Borrower, Borrower's Affiliates and any Person who may do
business with or own securities of Borrower or Borrower's Affiliates, all as if
it were not Agent and without any duty to account therefor to Lenders.
14.4 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon Agent or any
other Lender and based on such documents and information as it will deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under or otherwise relating to this Agreement, the
Obligations, the Collateral and the Security Documents; and Agent will not have
any duty or responsibility at any time to provide any Lender with any credit or
other information with respect thereto.
14.5 INDEMNIFICATION. Lenders agree to indemnify Agent (to the extent
not reimbursed by Borrower), ratably according to their respective Revolving
Commitments existing on the date hereof, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against Agent in any way relating to or
arising out of this Agreement, any Note, the Obligations or any of the Security
Documents or any action taken or omitted by Agent under this Agreement, any
Note, the Obligations or any of the Security
- 22 -
23
Documents, provided that no Lender will be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses incurred by Agent in connection with the preparation, review,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any Note,
the Obligations or any of the Security Documents, or any of them, to the extent
that Agent is not reimbursed for such expenses by Borrower. The provisions of
this Section will survive the termination of this Agreement.
14.6 SUCCESSOR AGENT. Agent may resign at any time as Agent under this
Agreement, the Notes or the Security Documents by giving written notice thereof
to Lenders and Borrower, which resignation will be effective only upon the
appointment of a successor Agent. Upon any such resignation, Lenders will
appoint a successor Agent, which will be a commercial bank organized under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent will
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent will be discharged from
its duties and obligations under this Agreement; provided, however, that the
successor Agent will not be considered as a Lender for purposes of this
Agreement. After any retiring Agent's resignation, the provisions of this
Section will inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement. If the other Lenders request
Agent to resign, then, prior to such resignation, the other Lenders will cause
Agent to be paid all amounts owed to Agent hereunder.
14.7 RELATIONS AMONG LENDERS. Each Lender agrees that it will not take
or institute any actions or proceedings against Borrower under this Agreement or
with respect to any Collateral, without the prior written consent of all
Lenders.
14.8 BENEFIT. The provisions of this Section are solely for the benefit
of Agent and Lenders, and may at any time or times be changed by Lenders as they
may elect without necessity of notice to or consent or approval by Borrower or
other Person; and neither Borrower nor any other Person will have any right to
rely on or enforce any of the provisions hereof. In performing its actions and
duties under this Agreement, Agent acts solely as agent of Lenders and does not
assume or have any obligation toward or agency relationship with or for
Borrower.
15. DEFINITIONS. For purposes hereof:
15.1 Each accounting term not defined or modified herein will have the
meaning given to it under generally accepted accounting principles in effect on
the Closing Date.
15.2 "Affiliate" will mean any Person under common control or having
similar equity holders owning at least ten percent (10%) thereof, whether such
common control is direct or indirect. All of Person's direct or indirect parent
corporations, partners, Subsidiaries, and the
- 23 -
24
officers, shareholders, members, directors and partners of any of the foregoing
and persons related by blood or marriage to any of the foregoing will be deemed
to be a Person's Affiliates for purposes of this Agreement.
15.3 "Agent's Account" will mean account number 4000364216 of Agent
maintained by Agent at its office at Cincinnati, Ohio, or such other account
maintained by Agent and designated by Agent in a written notice to Lenders and
Borrower.
15.4 "Attorneys Fees" will mean the reasonable value of the services
(and all costs and expenses related thereto) of the attorneys (and all
paralegals and other staff employed by such attorneys) employed by Agent or any
Lender from time to time to: (i) take any action in or with respect to any suit
or proceedings (bankruptcy or otherwise) relating to the Collateral or this
Agreement; (ii) protect, collect, lease or sell, any of the Collateral; (iii)
attempt to enforce any lien on any of the Collateral or to give any advice with
respect to such enforcement; (iv) enforce any of Lenders' rights to collect any
of the Obligations; (v) give Agent or any Lender advice with respect to this
Agreement, including but not limited to advice in connection with any default,
workout or bankruptcy; (vi) prepare any amendments, restatements, amendments or
waivers to this Agreement or any of the documents executed in connection with
any of the Obligations.
15.5 "Available Commitment" will mean, as to any Lender at any time, an
amount equal to the excess, if any, of (i) such Lender's Revolving Commitment
over (ii) the then outstanding Revolving Loans made by such Lender.
15.6 "Borrower's Account" will mean the account of Borrower at Agent
designated by Agent for use hereunder.
15.7 "Business Day" will mean any day excluding Saturday, Sunday and any
other day on which banks are required or authorized to close in Ohio.
15.8 "Closing" will mean the execution and delivery of the documents
listed on the Closing Memo.
15.9 "Closing Date" will mean the date on which this Agreement is
executed.
15.10 "Closing Memo" will mean the Closing Memorandum between Borrower
and Agent in connection with the transactions represented by this Agreement.
15.11 "Code" will mean the Internal Revenue Code of 1986, as amended
from time to time.
15.12 "Collateral" will mean any property, real or personal, tangible or
intangible, now or in the future securing the Obligations, including but not
limited to the property covered by the Security Documents listed in the Closing
Memo.
- 24 -
25
15.13 "Compliance Certificate" will mean the Compliance Certificate in
the form delivered to Borrower in connection with the Closing.
15.14 "Conversion Date" will mean August 1, 1997.
15.15 "Default" will mean any event or condition which with the passage
of time or giving of notice, or both, would constitute an Event of Default.
15.16 "Default Rate" will mean 4% per annum plus the highest rate of
interest that would otherwise be in effect under any Note but not more than the
highest rate permitted by applicable law.
15.17 "Disclosure Schedule" will mean the Disclosure Schedule delivered
by Borrower to Lenders in connection with the Closing.
15.18 "ERISA" will mean the Employee Retirement Income Security Act of
1974, or any successor statute, as amended from time to time.
15.19 "ERISA Affiliate" will mean any trade or business (whether or not
incorporated) that is a member of a group of which Borrower is a member and
which is treated as a single employer under Section 414 of the Code.
15.20 "Event of Default" will mean any of the events listed in Section 7
above.
15.21 "Guarantees" will mean the guarantees of all or any part of the
Obligations, now existing or hereafter arising, including but not limited to
those listed on the Closing Memo, whether on a full, limited or non-recourse
basis and such term will include any Person that hypothecates or otherwise
pledges any property to Agent or any Lender in connection with any of the
Obligations and will include any amendments thereto and restatements thereof.
15.22 "Guarantor(s)" will mean any Person(s) that now or in the future
deliver one or more Guarantees to Agent for the benefit of Lenders. Initially,
the Guarantor will mean Multi-Color Corporation.
15.23 "Hazardous wastes", "hazardous substances" and "pollutants or
contaminants" will mean any substances, waste, pollutant or contaminant now or
hereafter included with any respective terms under any now existing or
hereinafter enacted or amended federal, state or local statute, ordinance, code
or regulation, including but not limited to the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 ET SEQ.
("CERCLA").
15.24 "Indebtedness" will mean, without duplication: (i) all obligations
(including capitalized lease obligations) which in accordance with generally
accepted accounting principles would be shown on a balance sheet as a liability;
(ii) all obligations for borrowed money or for the deferred purchase price of
property or services; and (iii) all guarantees, reimbursement,
- 25 -
26
payment or similar obligations, absolute, contingent or otherwise, under
acceptance, letter of credit or similar facilities.
15.25 "Loan(s)" will mean any and all advances of funds under this
Agreement or any of the Notes.
15.26 "Multiemployer Plan" will mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate (other than
one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of Code
Section 414) is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
15.27 "Note(s)" will mean any note, now or in the future, between
Borrower and any Lender, and will include any amendments made thereto and
restatements thereof, extensions and replacements.
15.28 "Notice(s) of Borrowing" will mean the notice required under
Section 2.6.1, above, in the form delivered by Agent to Borrower in connection
with the Closing.
15.29 "Obligations" will mean and include all loans, advances, debts,
liabilities, obligations, covenants and duties owing to Lenders from Borrower of
any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under this Agreement or under any
other agreement, instrument or document, whether or not for the payment of
money, whether arising by reason of an extension of credit, opening of a letter
of credit, loan, guaranty, indemnification or in any other manner, whether
direct or indirect (including those acquired by assignment, participation,
purchase, negotiation, discount or otherwise), absolute or contingent, joint or
several, due or to become due, now existing or hereafter arising and whether or
not contemplated by Borrower or Lenders on the Closing Date.
15.30 "PBGC" will mean the Pension Benefit Guaranty Corporation referred
to and defined in ERISA.
15.31 "Permitted Liens" will mean:
(i) liens securing the payment of taxes, either not yet due or the
validity of which is being contested in good faith by appropriate
proceedings, and as to which it has set aside on its books adequate
reserves to the extent required by generally accepted accounting
principles;
(ii) deposits under workers' compensation, unemployment insurance and
social security laws, or to secure the performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or leases, or
to secure statutory obligations or surety or appeal bonds, or to secure
indemnity, performance or other similar bonds in the ordinary course of
business;
- 26 -
27
(iii) liens imposed by law, such as carriers', warehousemen's or
mechanics' liens, incurred by it in good faith in the ordinary course of
business, and liens arising out of a judgment or award against it with
respect to which it will currently be prosecuting an appeal, a stay of
execution pending such appeal having been secured;
(iv) liens in favor of Lenders;
(v) reservations, exceptions, encroachments and other similar title
exceptions or encumbrances affecting real properties, provided such do
not materially detract from the use or value thereof as used by the
owner thereof;
(vi) attachment, judgment and similar liens provided that execution is
effectively stayed pending a good faith contest.
15.32 "Person" will mean an individual, partnership, corporation
(including a business trust), limited liability company, joint stock company,
trust, unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
15.33 "Plan" will mean any pension plan subject to the provisions of
Title IV of ERISA or Section 412 of the Code and which is maintained for
employees of Borrower or any ERISA Affiliate.
15.34 "Prime Rate" will mean the rate per annum established by Agent
from time to time based on its consideration of various factors, including money
market, business and competitive factors, and it is not necessarily any Lender's
most favored interest rate. Subject to any maximum or minimum interest rate
limitations specified herein or by applicable law, if and when such Prime Rate
changes, then in each such event, the rate of interest payable under this
Agreement, any Note, the Security Documents or any other document evidencing the
Obligations that is tied to the Prime Rate will change automatically without
notice effective the date of such changes.
15.35 "Ratable Portion" will mean, with respect to any Lender, a
fraction (expressed as a percentage), the numerator of which will be the amount
of such Lender's Revolving Commitment, and the denominator of which will be the
aggregate amount of all Lenders' Revolving Commitments; provided, however, that
as to any Lender that fails or refuses to make its Ratable Portion of any
Revolving Loan, such Lender's Ratable Portion of payments distributable to
Lenders will be adjusted accordingly.
15.36 "Reportable Event" will mean any reportable event as defined in
Section 4043(b) of ERISA or the regulations issued thereunder with respect to a
Plan (other than a Plan maintained by an ERISA Affiliate which is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
15.37 "Revolving Commitment(s)" will mean, as to any Lender, the dollar
amount set forth opposite its name on SCHEDULE 1 hereto.
-27-
28
15.38 "Revolving Loans" will mean the advances described in Section
2.1.1 above.
15.39 "Security Documents" will mean the agreements, pledges, mortgages,
guarantees, or other documents delivered by Borrower, any Guarantor or any other
person or entity to Lender previously, now or in the future to encumber the
Collateral in favor of Agent for the benefit of Lenders, including but not
limited to those listed on the Closing Memo, and all amendments thereto and
restatements thereof.
15.40 "Subsidiaries" will mean a corporation of which shares of stock
having ordinary voting power (other than stock having such power only by reason
of the happening of a contingency) to elect a majority of the Board of Directors
or other managers of such corporation are at the time owned, or the management
of which is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by Borrower.
15.41 "Termination Date" will mean June 30, 2002; provided, however,
that the Termination Date will in no event be later than the date on which the
Revolving Commitments will have been terminated in whole, whether by expiration
or upon acceleration.
15.42 "Withdrawal Liability" will mean liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
All other terms contained in this Agreement and not otherwise defined herein
will, unless the context indicates otherwise, have the meanings provided for by
the Uniform Commercial Code of the State of Ohio to the extent the same are
defined therein.
16. GENERAL.
16.1 INDEMNITY. Borrower will indemnify, defend and hold harmless Agent
and each Lender, its directors, officers, counsel and employees, from and
against all claims, demands, liabilities, judgments, losses, damages, costs and
expenses, joint or several (including all accounting fees and Attorneys Fees
reasonably incurred), that Agent, such Lender or any such indemnified party may
incur arising under or by reason of this Agreement or any act hereunder or with
respect hereto or thereto including but not limited to any of the foregoing
relating to any act, mistake or failure to act in perfecting, maintaining,
protecting or realizing on any collateral or lien thereon except the willful
misconduct or gross negligence of such indemnified party. Without limiting the
generality of the foregoing, Borrower agrees that if, after receipt by any
Lender of any payment of all or any part of the Obligations, demand is made at
any time upon such Lender for the repayment or recovery of any amount or amounts
received by it in payment or on account of the Obligations and such Lender
repays all or any part of such amount or amounts by reason of any judgment,
decree or order of any court or administrative body, or by reason of any
settlement or compromise of any such demand, this Agreement will continue in
full force and effect and Borrower will be liable, and will indemnify, defend
and hold harmless such Lender for the amount or amounts so repaid. The
provisions of this Section will be and remain effective notwithstanding any
contrary action which may have been taken by Borrower in reliance upon
-28-
29
such payment, and any such contrary action so taken will be without prejudice to
Lenders' rights under this Agreement and will be deemed to have been conditioned
upon such payment having become final and irrevocable. The provisions of this
Section will survive the expiration or termination of this Agreement.
16.2 CONTINUING AGREEMENT. This Agreement is and is intended to be a
continuing agreement and will remain in full force and effect until each Loan is
finally and irrevocably paid in full and this Agreement is terminated by a
writing signed by Lenders specifically terminating this Agreement.
16.3 NO THIRD PARTY BENEFICIARIES. Nothing express or implied herein is
intended or will be construed to confer upon or give any Person, other than the
parties hereto, any right or remedy hereunder or by reason hereof.
16.4 NO PARTNERSHIP OR JOINT VENTURE. Nothing contained herein or in any
of the agreements or transactions contemplated hereby is intended or will be
construed to create any relationship other than as expressly stated herein or
therein and will not create any joint venture, partnership or other
relationship.
16.5 WAIVER. No delay or omission on the part of Agent or any Lender to
exercise any right or power arising from any Event of Default will impair any
such right or power or be considered a waiver of any such right or power or a
waiver of any such Event of Default or an acquiescence therein nor will the
action or nonaction of Lenders in case of such Event of Default impair any right
or power arising as a result thereof or affect any subsequent default or any
other default of the same or a different nature. No disbursement of the Loans
hereunder will constitute a waiver of any of the conditions to Lenders'
obligation to make further disbursements; nor, if Borrower is unable to satisfy
any such condition, will any such disbursement have the effect of precluding
Agent or any Lender from thereafter declaring such inability to be an Event of
Default.
16.6 NOTICES. All notices, demands, requests, consents, approvals and
other communications required or permitted hereunder will be in writing and will
be conclusively deemed to have been received by a party hereto and to be
effective if delivered personally to such party, or sent by telex, telecopy
(followed by written confirmation) or other telegraphic means, or by overnight
courier service, or by certified or registered mail, return receipt requested,
postage prepaid, addressed to such party at the address set forth below or to
such other address as any party may give to the other in writing for such
purpose:
To Agent: PNC Bank, Ohio, National Association
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxx 00000-0000
Attention: Middle Market Banking
Telecopier No.: (000) 000-0000
To Lenders: PNC Bank, Ohio, National Association
-29-
30
201 East Fifth Street, 26th Floor
X.X. Xxx 0000
Xxxxxxxxxx, Xxxx 00000-0000
Attention: Middle Market Banking
Telecopier No.: (000) 000-0000
Star Bank, National Association
000 Xxxxxx Xxxxxx
XX 0000
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
To Borrower: Laser Graphic Systems, Incorporated
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopier No.: ________________
All such communications, if personally delivered, will be conclusively deemed to
have been received by a party hereto and to be effective when so delivered, or
if sent by telex, telecopy or telegraphic means, on the day on which
transmitted, or if sent by overnight courier service, on the day after deposit
thereof with such service, or if sent by certified or registered mail, on the
third business day after the day on which deposited in the mail.
16.7 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and
inure to the benefit of Borrower and Lenders and their respective successors and
assigns, provided, however, that Borrower may not assign this Agreement in whole
or in part without the prior written consent of Lenders and Lenders at any time
may assign this Agreement in whole or in part, subject to the terms and
conditions of this Agreement.
16.8 MODIFICATIONS. This Agreement, any Notes and the Security
Documents, and the documents listed on the Closing Memo, constitute the entire
agreement of the parties and supersede all prior agreements and understandings
regarding the subject matter of this Agreement, including but not limited to any
proposal or commitment letters. No modification or waiver of any provision of
this Agreement, any Note, any of the Security Documents or any of the documents
listed on the Closing Memo, nor consent to any departure by Borrower therefrom,
will be established by conduct, custom or course of dealing; and no
modification, waiver or consent will in any event be effective unless the same
is in writing and specifically refers to this Agreement, and then such waiver or
consent will be effective only in the specific instance and for the purpose for
which given. No notice to or demand on Borrower in any case will entitle
Borrower to any other or further notice or demand in the same, similar or other
circumstance.
16.9 REMEDIES CUMULATIVE. No single or partial exercise of any right or
remedy by Agent or any Lender will preclude any other or further exercise
thereof or the exercise of any
-30-
31
other right or remedy. All remedies hereunder and in any instrument or document
evidencing, securing, guaranteeing or relating to any Loan or now or hereafter
existing at law or in equity or by statute are cumulative and none of them will
be exclusive of the others or any other remedy. All such rights and remedies may
be exercised separately, successively, concurrently, independently or
cumulatively from time to time and as often and in such order as Lenders may
deem appropriate.
16.10 ILLEGALITY. If fulfillment of any provision hereof or any
transaction related hereto or of any provision of the Notes or the Security
Documents, at the time performance of such provision is due, involves
transcending the limit of validity prescribed by law, then IPSO FACTO, the
obligation to be fulfilled will be reduced to the limit of such validity; and if
any clause or provisions herein contained other than the provisions hereof
pertaining to repayment of the Obligations operates or would prospectively
operate to invalidate this Agreement in whole or in part, then such clause or
provision only will be void, as though not herein contained, and the remainder
of this Agreement will remain operative and in full force and effect; and if
such provision pertains to repayment of the Obligations, then, at the option of
Lenders, all of the Obligations of Borrower to Lenders will become immediately
due and payable.
16.11 GENDER, ETC. Whenever used herein, the singular number will
include the plural, the plural the singular and the use of the masculine,
feminine or neuter gender will include all genders.
16.12 HEADINGS. The headings in this Agreement are for convenience only
and will not limit or otherwise affect any of the terms hereof.
16.13 TIME. Time is of the essence in the performance of this
Agreement.
16.14 GOVERNING LAW AND JURISDICTION; NO JURY TRIAL. THIS AGREEMENT
WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES, AND BORROWER HEREBY AGREES TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN XXXXXXXX COUNTY, OHIO AND CONSENTS
THAT ALL SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL DIRECTED TO BORROWER AT
ITS ADDRESS SET FORTH HEREIN FOR NOTICES AND SERVICE SO MADE WILL BE DEEMED TO
BE COMPLETED FIVE (5) BUSINESS DAYS AFTER THE SAME HAS BEEN DEPOSITED IN U.S.
MAILS, POSTAGE PREPAID; PROVIDED THAT NOTHING CONTAINED HEREIN WILL PREVENT
AGENT OR LENDERS FROM BRINGING ANY ACTION OR EXERCISING ANY RIGHTS AGAINST ANY
SECURITY OR AGAINST BORROWER INDIVIDUALLY, OR AGAINST ANY PROPERTY OF BORROWER,
WITHIN ANY OTHER STATE OR NATION. BORROWER WAIVES ANY OBJECTION BASED ON FORUM
NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER.
BORROWER AND LENDERS EACH WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, ANY DOCUMENTS EVIDENCING ANY OF THE
OBLIGATIONS, OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH AGREEMENTS.
-31-
32
Executed at Cincinnati, Ohio on January 9, 1997.
LASER GRAPHIC SYSTEMS, INCORPORATED
AS BORROWER
By: _______________________________________
Print Name:________________________________
Title:_____________________________________
PNC BANK, OHIO, NATIONAL ASSOCIATION
ON ITS OWN BEHALF AS LENDER, AND AS AGENT
By:________________________________________
Print Name:________________________________
Title:_____________________________________
STAR BANK, NATIONAL ASSOCIATION
AS LENDER
By:________________________________________
Print Name:________________________________
Title:_____________________________________
- 32 -
33
SCHEDULE 1
LIST OF LENDERS, ADDRESSES AND COMMITMENTS
------------------------------------------
NON-REVOLVING CREDIT FACILITY REVOLVING COMMITMENTS
----------------------------- ---------------------
1. PNC Bank, Ohio, National Association $250,000
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxx 00000-0000
Attention: Middle Market Banking
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
ABA No.: 000000000
2. Star Bank, National Association $250,000
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
ABA No.: 000000000
TOTAL REVOLVING COMMITMENT $500,000
- 33 -
