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AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF October 15, 1996
by and among
NU-KOTE INTERNATIONAL, INC.
as Borrower,
NU-KOTE HOLDING, INC.
as Guarantor,
THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF,
as Lenders,
BARCLAYS BANK PLC,
as Documentation Agent
and
NATIONSBANK OF TEXAS, N.A.
as Administrative Agent and Collateral Agent
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NU-KOTE INTERNATIONAL, INC.
NU-KOTE HOLDING, INC.
CREDIT AGREEMENT
Dated as of October 15, 1996
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement; Calculations; Computations . . . . . 27
1.3 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . 27
SECTION 2. AMOUNTS AND TERMS OF REVOLVING CREDIT COMMITMENTS AND
REVOLVING CREDIT LOANS
2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2 Interest on the Revolving Credit Loans . . . . . . . . . . . . . . 31
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.4 Prepayments and Payments of Revolving Credit Loans; Reductions in
Revolving Credit Loan Commitments. . . . . . . . . . . . . . . . . 35
2.5 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.6 Special Provisions Governing Eurodollar Rate Loans; Increased
Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2.7 Capital Adequacy Adjustment. . . . . . . . . . . . . . . . . . . . 42
2.8 Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . 43
2.9 Tax Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 3. CONDITIONS TO REVOLVING CREDIT LOANS AND LETTERS OF CREDIT
3.1 Conditions to Initial Revolving Credit Loans and Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.2 Conditions to All Revolving Credit Loans . . . . . . . . . . . . . 55
3.3 Conditions to Letters of Credit. . . . . . . . . . . . . . . . . . 57
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Organization, Powers, Good Standing, Business and Subsidiaries . . 57
4.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . 58
4.3 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . 59
4.4 No Material Adverse Change; No Stock Payments. . . . . . . . . . . 59
4.5 Title to Properties; Liens . . . . . . . . . . . . . . . . . . . . 59
4.6 Litigation; Adverse Facts. . . . . . . . . . . . . . . . . . . . . 60
4.7 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 60
4.8 Materially Adverse Agreements; Performance of Agreements . . . . . 61
4.9 Governmental Regulation. . . . . . . . . . . . . . . . . . . . . . 61
4.10 Securities Activities. . . . . . . . . . . . . . . . . . . . . . . 61
4.11 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . 61
4.12 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.13 Licenses, Permits and Authorizations . . . . . . . . . . . . . . . 63
4.14 Intangible Property. . . . . . . . . . . . . . . . . . . . . . . . 63
4.15 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 5. AFFIRMATIVE COVENANTS
5.1 Financial Statements and Other Reports . . . . . . . . . . . . . . 65
5.2 Corporate Existence, etc.. . . . . . . . . . . . . . . . . . . . . 69
5.3 Payment of Taxes and Claims; Tax Consolidation . . . . . . . . . . 69
5.4 Maintenance of Properties; Insurance . . . . . . . . . . . . . . . 70
5.5 Inspection; Lender Meeting . . . . . . . . . . . . . . . . . . . . 70
5.6 Equal Security for Obligations; No Further Negative Pledges. . . . 70
5.7 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . 71
5.8 Environmental Disclosure and Inspection. . . . . . . . . . . . . . 71
5.9 Hazardous Materials; Remedial Action . . . . . . . . . . . . . . . 72
5.10 Further Assurances; New Subsidiaries; Intellectual Property. . . . 73
5.11 Notice of Asset Transfers. . . . . . . . . . . . . . . . . . . . . 75
SECTION 6. NEGATIVE COVENANTS
6.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
6.2 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.3 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
6.4 Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . 82
6.5 Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . 83
6.6 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . 85
6.7 Restriction on Fundamental Changes . . . . . . . . . . . . . . . . 86
6.8 Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . 90
6.9 Sale or Discount of Receivables. . . . . . . . . . . . . . . . . . 90
6.10 Transactions with Shareholders, Affiliates and Subsidiaries. . . . 90
6.11 Disposal of Subsidiary Stock . . . . . . . . . . . . . . . . . . . 91
6.12 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . 91
6.13 Restructuring and Affiliate Reorganizations. . . . . . . . . . . . 92
SECTION 7. GUARANTY OF HOLDING
7.1 Guaranty by Holding. . . . . . . . . . . . . . . . . . . . . . . . 92
7.2 Terms of Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 8. EVENTS OF DEFAULT
8.1 Failure to Make Payments when Due. . . . . . . . . . . . . . . . . 95
8.2 Default in Other Agreements. . . . . . . . . . . . . . . . . . . . 96
8.3 Breach of Certain Covenants. . . . . . . . . . . . . . . . . . . . 96
8.4 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . 96
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8.5 Other Defaults Under Agreement or Loan Documents . . . . . . . . 96
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.. . . . . . 97
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.. . . . . . . 97
8.8 Judgments and Attachments. . . . . . . . . . . . . . . . . . . . 98
8.9 Dissolution. . . . . . . . . . . . . . . . . . . . . . . . . . . 98
8.10 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
8.11 Withdrawal Liability Under Multiemployer Plan. . . . . . . . . . 99
8.12 Invalidity of Guaranties . . . . . . . . . . . . . . . . . . . . 99
8.13 Change of Control. . . . . . . . . . . . . . . . . . . . . . . . 99
8.14 Impairment of Collateral . . . . . . . . . . . . . . . . . . . . 100
8.15 Eurocurrency Credit Agreement. . . . . . . . . . . . . . . . . . 100
8.16 ERISA Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.17 Breach of Certain Original Credit Agreement Covenants. . . . . . 101
SECTION 9. AGENT
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.2 Powers; General Immunity . . . . . . . . . . . . . . . . . . . . 102
9.3 Representations and Warranties; No Responsibility For Appraisal
of Creditworthiness. . . . . . . . . . . . . . . . . . . . . . . 104
9.4 Right to Indemnity . . . . . . . . . . . . . . . . . . . . . . . 104
9.5 Registered Persons Treated as Owner. . . . . . . . . . . . . . . 104
9.6 Collateral Documents; Appointment of Collateral Agent; Successor
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . 105
9.7 Successor Agents . . . . . . . . . . . . . . . . . . . . . . . . 105
SECTION 10. MISCELLANEOUS
10.1 Representation of Lenders. . . . . . . . . . . . . . . . . . . . 106
10.2 Assignments and Participations in Revolving Credit Loans; Letters
of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.3 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
10.4 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
10.5 Set Off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
10.6 Ratable Sharing. . . . . . . . . . . . . . . . . . . . . . . . . 110
10.7 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . 110
10.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
10.9 Survival of Warranties and Certain Agreements. . . . . . . . . . 111
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative. . . . . . 112
10.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 112
10.12 Obligations Several; Independent Nature of Lenders' Rights . . . 112
10.13 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
10.14 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . 113
10.15 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 113
10.16 Consent to Jurisdiction and Service of Process; Waiver of
Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
10.17 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . 114
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10.18 Interest and Charges. . . . . . . . . . . . . . . . . . . . . 114
10.20 Counterparts; Effectiveness . . . . . . . . . . . . . . . . . 115
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EXHIBITS
IA FORM OF NOTICE OF BORROWING
IB FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF OPINIONS OF COMPANY'S COUNSEL
IV FORM OF OPINION OF XXXXXXX, XXXXXXX & XXXXXXX, P.C.
V FORM OF CONFIDENTIALITY AGREEMENT
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF REVOLVING CREDIT NOTE
IX FORM OF ACKNOWLEDGEMENT
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SCHEDULES
1.1 LENDER'S ORIGINAL REVOLVING CREDIT COMMITMENTS AND PRO RATA SHARES
4.1-D SUBSIDIARIES
4.5 LEASED LOCATIONS
4.6 EXISTING LITIGATION
4.14 TRADEMARKS AND TRADE NAMES
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NU-KOTE INTERNATIONAL, INC.
NU-KOTE HOLDING, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of October 15, 1996,
and entered into by and among NU-KOTE HOLDING, INC., a Delaware corporation
("Holding"), NU-KOTE INTERNATIONAL, INC., a Delaware corporation ("Company"),
THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (together with each financial
institution that may become a party to this Credit Agreement as a Lender as
herein provided, referred to herein individually as a "Lender" and collectively
as "Lenders"), BARCLAYS BANK PLC, in its capacity as documentation agent
("Documentation Agent"), and NATIONSBANK OF TEXAS, N.A., as administrative agent
for Lenders (hereinafter, in such capacity, together with any successors thereto
in such capacity, referred to as "Agent"), and as collateral agent for Lenders.
R E C I T A L S
WHEREAS, Holding, Company, Lenders, Documentation Agent and Agent are
parties to that certain Credit Agreement, dated as of February 24, 1995, as
amended by that certain First Amendment to Credit Agreement, dated as of
June 21, 1995, and Second Amendment to Credit Agreement, dated as of February 5,
1996 (said Credit Agreement, as so amended or modified to the date hereof, the
"Original Credit Agreement");
WHEREAS, Holding, Company, Lenders, Collateral Agent, Documentation Agent
and Agent have agreed to restructure, increase, extend, and renew the
indebtedness under the Original Credit Agreement to provide for one revolving
line of credit in the aggregate amount of $150,000,000;
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Holding, Company, Lenders, Agent,
Documentation Agent and Collateral Agent agree that (i) all obligations under
the Original Credit Agreement, as modified herein, shall, after the Closing
Date, be evidenced by the Notes (as defined herein), this Agreement and the
other Domestic Loan Documents, and shall be secured by, among other things, the
Collateral as granted pursuant to the Collateral Documents (as defined herein)
and (ii) the Original Credit Agreement shall be amended and restated in its
entirety as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings:
"ACKNOWLEDGEMENT" to be executed and delivered by Holding, Company and each
Material Domestic Subsidiary on the Closing Date, substantially in the form
annexed hereto as EXHIBIT IX, as such may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"ACQUISITION DEBT" means (i) Indebtedness assumed in connection with any
Permitted Acquisition, provided such Indebtedness was not created in
anticipation of any such Permitted Acquisition, and (ii) Indebtedness retained
as consideration by the applicable selling Person or Persons of any assets or
stock pursuant to a Permitted Acquisition.
"ACQUISITION VALUE" means, with respect to an acquisition of stock or
assets pursuant to subsection 6.7B(ii), the aggregate amount of (i) the purchase
price paid for such stock or assets (excluding (x) the amount, if any, of any
liabilities of any Person being acquired or any liabilities assumed by Holding,
Company or any Subsidiary thereof in connection with such acquisition and
(y) the amount or value of any stock of Holding, Company or any Subsidiary
thereof, or the cash proceeds from the issuance of any such stock, paid as
consideration for such acquisition), PLUS (ii) all legal and accounting fees and
expenses payable by Company or such Subsidiary in connection with such
acquisition as estimated in good faith by Company at the time Company or such
Subsidiary enters into a binding contractual commitment in respect of such
acquisition. Such good faith estimates shall be conclusive, and no Potential
Event of Default or Event of Default shall occur as a result of exceeding such
estimates; PROVIDED, however, that for other purposes of calculating the amounts
in subsection 6.7B, the actual amounts of such fees and expenses shall be used.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination Date,
the rate (rounded upward to the next highest one-hundredth of one percent)
obtained by dividing (i) the Eurodollar Rate for that date by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserves required to be
maintained against "Eurocurrency liabilities" as specified in Regulation D (or
against any other category of liabilities that includes deposits by reference to
which the interest rate on Eurodollar Rate Loans is determined or any category
of extensions of credit or other assets that includes loans by a non-United
States office of a Lender to United States residents).
"AFFECTED LENDER" means any Lender affected by any of the events described
in subsections 2.6B or 2.6C.
"AFFILIATE", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this
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definition, "control" (including with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as applied
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or
otherwise.
"AFTER TAX CASH FLOW" means, for any period, an amount equal to the sum
(without duplication) of (a) Consolidated Net Income, (b) to the extent
Consolidated Net Income has been reduced thereby, amortization expense,
depreciation expense, deferred taxes and other non-cash expenses, (c) losses on
Asset Sales, (d) extraordinary losses (excluding extraordinary items relating to
environmental and ERISA matters) and (e) other non-cash items reducing
Consolidated Net Income (excluding write-offs of Inventory and accounts
receivable) less the sum (without duplication) of (x) gains on Asset Sales,
(y) extraordinary gains (excluding extraordinary items relating to environmental
and ERISA matters) and (z) other non-cash items increasing Consolidated Net
Income, all as determined on a consolidated basis for Holding and its
Subsidiaries in conformity with GAAP (PROVIDED, HOWEVER, the effect on such
component amounts of Discontinued Operations shall be excluded from such
calculation).
"AGENT" has the meaning assigned to that term in the introductory paragraph
to this Agreement.
"AGGREGATE AMOUNTS DUE" has the meaning assigned to that term in
subsection 10.6.
"AGREEMENT" means this Credit Agreement as it may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"APPLICABLE LAW" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, and (b) in respect of contracts relating to interest or finance charges
that are made or performed in the State of Texas, "Applicable Law" shall mean
the laws of the United States of America, including without limitation 12 USC
Sections 85 and 86, as amended from time to time, and any other statute of the
United States of America now or at any time hereafter prescribing the maximum
rates of interest on loans and extensions of credit, and the laws of the State
of Texas, including, without limitation, Article 5069-1.04, Title 79, Revised
Civil Statutes of Texas, 1925, as amended ("Art. 1.04"), and any other statute
of the State of Texas now or at any time hereafter prescribing maximum rates of
interest on loans and extensions of credit; provided that the parties hereto
agree that the provisions of Chapter 15, Title 79, Revised Civil Statutes of
Texas, 1925, as amended, shall not apply to Revolving Credit Loans, this
Agreement, or any other Loan Documents.
"APPLICABLE MARGIN" means 0.625% per annum; PROVIDED, HOWEVER, the
Applicable Margin shall be adjusted to be the margin set out below opposite the
applicable ratio on each Adjustment Date, in each case based upon the Interest
Coverage Ratio (as of the last day of the
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most recent preceding fiscal quarter for which financial statements have been
delivered as provided below (calculated for the period comprised of four
fiscal quarters ending on such date)):
Interest Coverage Ratio Applicable Margin
----------------------- -----------------
Greater than or equal to 6.5 to 1 0.625%
Greater than or equal to 5.0 to 1, but
less than 6.5 to 1 0.875%
Greater than or equal to 4.0 to 1, but
less than 5.0 to 1 1.000%
Less than 4.0 to 1 1.125%
For purposes of determining the Applicable Margin, "ADJUSTMENT DATE" means the
date of receipt by Agent of the financial statements and certificate described
in subsections 5.1(i) or 5.1(ii) and 5.1(iii) with respect to such fiscal
quarter (commencing with the date of receipt of Company's financial statements
as at and for the period ending on September 27, 1996, pursuant to
subsection 5.1(i) and the related certificate pursuant to subsection 5.1(iii)).
Notwithstanding the foregoing, at any time Company has failed to deliver such
financial statements or certificate in accordance with such provisions, the
Applicable Margin shall be 1.125% per annum until such time as Company shall
deliver such financial statements or certificate.
"ASSET SALE" means the sale, lease, assignment, exchange, disposition or
other transfer for value by Holding, Company or any Subsidiary (including,
without limitation, any sale/leaseback) to any Person other than Holding,
Company or any Subsidiary thereof of (i) any of the stock of any of Holding's
Subsidiaries which are not Material Subsidiaries, (ii) all or substantially all
of the assets of any division or line of business of Holding, Company or any
Subsidiary, or (iii) any other assets or rights, or related group of assets or
rights, of Holding, Company or any Subsidiary.
"ASSET TRANSFER" means (i) the transfer of property or assets of Company or
any of its Subsidiaries from one state, jurisdiction or country to another
state, jurisdiction or country or (ii) the sale, lease, assignment, exchange,
disposition or other transfer for value or otherwise (including by way of
dividend or distribution on its capital stock) by Holding, Company or any
Subsidiary (including, without limitation, any sale/leaseback) to Holding,
Company or any Subsidiary of (a) all or substantially all of the assets of any
division or line of business of Holding, Company or any Subsidiary or (b) any
other assets or rights, or related group of assets or rights, of Holding,
Company or any Subsidiary.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy" from time to time in effect, or any successor statute.
"BARCLAYS" has the meaning assigned to that term in the Recitals to this
Agreement.
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"BASE RATE" means the greater of: (i) the rate that NationsBank announces
from time to time as its prime lending rate (which rate may not necessarily be
the lowest or best rate actually charged to any customer), as in effect from
time to time, or (ii) the rate publicly announced from time to time as the
Federal Funds Rate, as in effect from time to time, PLUS .50% per annum.
"BASE RATE LOANS" means Revolving Credit Loans made by Lenders bearing
interest at rates determined by reference to the Base Rate as provided in
subsection 2.2A.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which either
is a legal holiday under the laws of either the State of Texas or the State of
New York or is a day on which banking institutions located in either state are
authorized or required by law or other governmental action to close, and
(ii) with respect to all notices, determinations, fundings and payments in
connection with the Eurodollar Rate, any day that is a Business Day described in
clause (i) and that is also a day for trading by and between banks in Dollar
deposits in the applicable interbank Eurodollar market.
"CAPITAL LEASE", as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"CASH EQUIVALENTS" means (i) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (ii) certificates of deposit,
eurodollar time deposits, overnight bank deposits and bankers acceptances, each
with maturities of one year or less from the date of the acquisition thereof, of
any Lender identified on SCHEDULE 1.1 or any other commercial bank having
capital and surplus in excess of $500,000,000 ("QUALIFYING BANKS"),
(iii) commercial paper of the Qualifying Banks or any of their Affiliates or of
a domestic issuer rated at least A-1 by Standard & Poor's Ratings Group, a
Division of Xx-Xxxx Hill, Inc., a New York corporation, or any successor thereto
("S&P"), or at least P-1 by Xxxxx'x Investors Service, Inc., or any successor
thereto ("MOODY'S"); PROVIDED, that if such commercial paper is rated by both
S&P and Moody's, such ratings shall be at least A-1 and P-1, respectively and
(iv) with respect to investments by a Eurocurrency Borrower, (a) securities
issued or fully guaranteed or insured by the government of the United Kingdom,
Switzerland, Scotland or Germany or any agency thereof or any of those exempted
persons referred to in paragraphs 2, 5, 6, 8, 12 and 13 of Schedule 2 to the
Banking Xxx 0000, (b) certificates of deposit, sterling time deposits, overnight
bank deposits and bankers acceptances, each with maturities of one year or less
from the date of the acquisition thereof, of any Lender identified on
SCHEDULE 1.1 or any Qualifying Bank (but using the equivalent of $500,000,000 in
the case of a bank whose capital is not denominated in Dollars), (c) commercial
paper of the Qualifying Banks or any of their Affiliates or of a United Kingdom,
Switzerland, Scotland or Germany issuer rated at least A-1 by S&P or at least P-
1 by Moody's, subject to the proviso referred to in (iii) above or a comparable
rating of a foreign rating agency and (d) investments of the type described in
clauses (i) through (iii) above.
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"CERTIFICATE OF EXEMPTION" has the meaning assigned to that term in
subsection 2.9.
"CLOSING DATE" means the date on or before October 15, 1996 on which the
initial Revolving Credit Loans are made and the conditions to initial Revolving
Credit Loans are satisfied.
"COLLATERAL" means all property made subject to a Lien pursuant to the
Collateral Documents and/or the Eurocurrency Security Documents.
"COLLATERAL AGENT" means NationsBank, in its capacity as collateral agent
under subsection 9.6 and the Collateral Documents, or any successor thereto
appointed in accordance with Section 9.6 hereof.
"COLLATERAL DOCUMENTS" means the Company Security Documents, the Holding
Security Documents, the Subsidiary Security Documents, the Acknowledgement and
all other instruments or documents heretofore, now or hereafter granting Liens
on property of Holding, Company or any Material Domestic Subsidiary to
Collateral Agent, for the benefit of Agent and Lenders and for the benefit of
the Eurocurrency Administrative Agent and the Eurocurrency Lenders.
"COMMITMENT FEE" has the meaning assigned to that term in subsection 2.3A.
"COMMITMENT FEE PERCENTAGE" means initially 0.250% per annum, and,
thereafter, on any date, the applicable percentage set forth below based upon
the Interest Coverage Ratio (as of the last day of the most recent preceding
fiscal quarter for which financial statements have been delivered as provided
below (calculated for the period comprised of four consecutive fiscal quarters
ending on such date)):
Interest Coverage Ratio Commitment Fee Percentage
----------------------- -------------------------
Greater than or equal to 5 to 1 0.250%
Less than 5 to 1 0.375%
Each change in the Commitment Fee Percentage resulting from a change in the
Interest Coverage Ratio as of the end of any fiscal quarter shall be effective
as of the date of receipt by Agent of the financial statements and certificate
described in subsections 5.1(i) or 5.1(ii) and 5.1(iii) with respect to such
fiscal quarter (commencing with the date of receipt of Company's financial
statements as at and for the period ending on September 27, 1996, pursuant to
subsection 5.1(i) and the related certificate pursuant to subsection 5.1(iii)).
Notwithstanding the foregoing, at any time Company has failed to deliver such
financial statements or such certificate in accordance with such provisions, the
Interest Coverage Ratio shall be deemed to be less than 5 to 1 until such time
as Company shall deliver such financial statements or certificate.
-6-
"COMPANY" has the meaning assigned to that term in the introductory
paragraph to this Agreement.
"COMPANY PATENT SECURITY AGREEMENT" means the Patent Security Agreement
executed and delivered by Company as of February 24, 1995, substantially in the
form annexed to the Original Credit Agreement as EXHIBIT XI thereto, as such
agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"COMPANY PLEDGE AGREEMENT" means, collectively, the Pledge Agreement
executed and delivered by Company as of February 24, 1995, substantially in the
form annexed to the Original Credit Agreement as EXHIBIT IXB thereto, as such
agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time, and such other pledge agreements executed and
delivered by Company as of February 24, 1995 with respect to the capital stock
of any Foreign Subsidiary, as such agreements may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Company as of February 24, 1995, substantially in the form annexed
to the Original Credit Agreement as EXHIBIT VII thereto, as such agreement may
be amended, amended and restated, supplemented or otherwise modified from time
to time.
"COMPANY SECURITY DOCUMENTS" means all of the Company Security Agreement,
the Company Pledge Agreement, the Company Trademark Pledge and the Company
Patent Security Agreement.
"COMPANY TRADEMARK PLEDGE" means the Trademark Security Agreement executed
and delivered by Company as of February 24, 1995, substantially in the form
annexed to the Original Credit Agreement as EXHIBIT VIII thereto, as such
agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
annexed hereto as EXHIBIT VI delivered to Lenders by Holding and Company
pursuant to subsection 5.1(iii).
"CONSOLIDATED EBITDA" means, for any period, the sum (without duplication)
of (i) Consolidated Net Income, (ii) provisions for taxes based on income,
(iii) Consolidated Interest Expense, (iv) to the extent Consolidated Net Income
has been reduced thereby, amortization expense, depreciation expense and other
non-cash expenses, (v) losses on Asset Sales, (vi) extraordinary losses
(excluding extraordinary items relating to environmental matters and ERISA
matters), and (vii) other non-cash items reducing Consolidated Net Income
(excluding write-offs of Inventory and accounts receivable) LESS the sum
(without duplication) of (w) gains on Asset Sales, (x) Consolidated Interest
Income, (y) extraordinary gains (excluding extraordinary items relating to
environmental and ERISA matters) and (z) other non-cash items increasing
Consolidated Net Income, all as determined on a consolidated basis for Holding
and
-7-
its Subsidiaries in conformity with GAAP; PROVIDED, HOWEVER, the effect on
such component amounts of Discontinued Operations shall be excluded from such
calculation.
"CONSOLIDATED GAAP CAPITAL EXPENDITURES" means, for any period, the sum of
all expenditures (whether paid in cash or accrued as liabilities) by Holding,
Company and its Material Subsidiaries during that period that are for items that
would be classified as "property, plant and equipment" or comparable items on
the consolidated balance sheet of Holding and its Subsidiaries in conformity
with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense, whether paid or accrued as liabilities (including the interest
component of Capital Leases), with respect to all outstanding Indebtedness of
Holding and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP, including, without limitation, all commissions,
discounts and other fees and charges owed with respect to any financing or
letters of credit and net costs under interest rate agreements and foreign
currency protection agreements to the extent that such costs are included within
interest expense under GAAP.
"CONSOLIDATED INTEREST INCOME" means, for any period, total interest income
earned by Holding and its Subsidiaries on cash or Cash Equivalents for such
period.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or loss)
of Holding and its Subsidiaries, after provisions for taxes and extraordinary
items, on a consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP; PROVIDED that there shall be excluded
therefrom, the income (or loss) of any Person that becomes a Subsidiary of
Holding or is merged into or consolidated with Holding or any of its
Subsidiaries the assets of which are acquired by Holding or any of its
Subsidiaries, to the extent such income (or loss) accrued prior to the date of
such merger, consolidation or acquisition.
"CONSOLIDATED NET WORTH" means, as at any date of determination, the excess
of Consolidated Total Assets over Consolidated Total Liabilities, PLUS or MINUS
any foreign currency translation adjustments, of Holding and its Subsidiaries on
a consolidated basis in conformity with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, as of any date of determination, all
property, whether real, personal, tangible, intangible or otherwise, which in
accordance with GAAP would be included in determining total assets as shown on
the assets portion of a consolidated balance sheet of Holding and its
Subsidiaries.
"CONSOLIDATED TOTAL DEBT" means, as of any date of determination, the sum,
without duplication, of (i) total long-term debt PLUS (ii) long-term Capital
Leases PLUS (iii) current portion of long-term debt and current portion of
Capital Leases PLUS (iv) notes payable, of Holding and its Subsidiaries on a
consolidated basis whether or not included on its consolidated balance sheet;
PROVIDED, HOWEVER, that the effect on such component amounts of Discontinued
Operations shall be excluded from such calculation.
-8-
"CONSOLIDATED TOTAL LIABILITIES" means, as of any date of determination,
the total liabilities which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a consolidated
balance sheet of Holding and its Subsidiaries.
"CONTINGENT OBLIGATION", as applied to any Person, means, without
duplication, any direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof or (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings. Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (other than for collection or deposit
in the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) any interest
rate or currency agreement and (c) any liability of such Person for the
obligations of another through any agreement (contingent or otherwise) (x) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise), (y) to maintain the solvency or any balance sheet item, level of
income or financial condition of another, or (z) to make take-or-pay or similar
payments if required regardless of non-performance by any other party or parties
to an agreement, if in the case of any agreement described under subclauses (x)
or (y) of this sentence the primary purpose or intent thereof is as described in
the preceding sentence. The amount of any Contingent Obligation shall be equal
to the amount of the obligation to the extent so guaranteed or otherwise
supported.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any material security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any material amount of its
properties is bound or to which it or any material amount of its properties is
subject.
"DISCONTINUED OPERATIONS" means the discontinued operations consisting of
Interfas Holding S.A., a corporation organized under the laws of France and a
Subsidiary of Holding, Interfas S.A., a corporation organized under the laws of
France and a Subsidiary of Holding, Nu-kote Canada, Inc., a corporation
organized under the laws of Canada and a Subsidiary of Holding, Nu-kote Canada
Holding, Inc., a corporation organized under the laws of Canada and a Subsidiary
of Holding, N-K Interface Limited, a corporation organized under the laws of
England and a Subsidiary of Holding, Nu-kote Quality Imaging GmbH, a corporation
organized under the laws of Germany and a Subsidiary of Holding, and Nu-Kote
Italia s.r.l., a corporation organized under the laws of Italy and a Subsidiary
of Holding.
-9-
"DOCUMENTARY LETTERS OF CREDIT" means a commercial documentary Letter of
Credit under which Issuing Lender agrees to make payments for the account of
Company, on behalf of the Company or any Material Domestic Subsidiary, in
respect of the obligation of Company or any Material Domestic Subsidiary in
connection with the purchase of goods or services in the ordinary course of
business.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introductory paragraph to this Agreement.
"DOLLAR EQUIVALENT" shall mean, with respect to an amount of any foreign
currency on any date, the amount of Dollars that may be purchased with such
amount of such foreign currency at the spot exchange rate with respect to such
foreign currency on such date.
"DOLLARS" and the sign "$" means the lawful money of the United States of
America.
"DOMESTIC LOAN DOCUMENTS" means this Agreement (including the Holding
Guaranty set forth herein), the Notes, the Letters of Credit, any Interest Hedge
Agreements entered into with any Lender, the Fee Letter, and the Collateral
Documents.
"DOMESTIC SUBSIDIARY" means a Subsidiary of Holding organized under the
laws of any state within the United States of America or the District of
Columbia.
"EMPLOYEE BENEFIT PLAN" means any Pension Plan, any employee welfare
benefit plan or any other employee benefit plan which is described in
Section 3(3) of ERISA and which is maintained, or contributed to, by Company or
any ERISA Affiliate of Company for employees of Company and any ERISA Affiliate
of Company.
"ENVIRONMENTAL CLAIM" means any written accusation, allegation, notice of
violation, claim, demand, abatement, compliance or other order or direction
(conditional or otherwise) by any governmental authority or any Person for
personal injury (including sickness, disease or death), tangible or intangible
property damage, damage to the environment, nuisance, pollution, contamination
or other adverse effects on the environment, or for fines, penalties or
restrictions, resulting from or based upon (i) the existence, or the
continuation of the existence, of a Release (whether sudden or non-sudden or
accidental or non-accidental), of, or exposure to, any Hazardous Material, in,
into or onto the environment at, in, by, from or related to any Facility,
(ii) the transportation, storage, treatment or disposal of Hazardous Materials
in connection with the operation of any Facility, or (iii) the violation, or
alleged violation, of any statutes, ordinances, orders, rules, regulations,
permits or licenses of or from any governmental authority, agency or court
relating to Hazardous Materials with respect to the Facilities.
"ENVIRONMENTAL LAWS" means all domestic and foreign laws relating to fines,
orders, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or threatened
Release of Hazardous Materials and to the generation, storage, transportation,
or disposal of Hazardous Materials, in any manner applicable to Holding
-10-
or any of its Subsidiaries or any of their respective Facilities, including,
without limitation, the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. Section 9601 ET SEQ.), the Hazardous Material
Transportation Act (49 U.S.C. Section 1801 ET SEQ.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 ET SEQ.), the Clean Air
Act (42 U.S.C. Section 7401 ET SEQ.), the Toxic Substances Control Act (15
U.S.C. Section 2601 ET SEQ.), the Occupational Safety and Health Act (29
U.S.C. Section 651 ET SEQ.) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. Section 11001 ET SEQ.), each as amended or
supplemented, and any analogous future or present local, state and federal
statutes and regulations promulgated pursuant thereto, each as in effect as
of the date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means any trade or business
(whether or not incorporated) that is a member of a group of which that Person
is a member and that is under common control with that Person within the meaning
of the regulations promulgated under Sections 414(b) and (c) of the Internal
Revenue Code.
"EUROCURRENCY ADMINISTRATIVE AGENT" means Barclays Bank PLC in its capacity
as agent under the Eurocurrency Credit Agreements; PROVIDED that "Eurocurrency
Administrative Agent" shall also include any successor of Eurocurrency
Administrative Agent pursuant to the Eurocurrency Credit Agreements.
"EUROCURRENCY BORROWER" means each of Produktions, Pelikan Scotland,
Pelikan Hardcopy, and any other Foreign Subsidiary that is a borrower under any
Eurocurrency Credit Agreement.
"EUROCURRENCY COLLATERAL AGENT" means NationsBank of Texas, N.A. in its
capacity as collateral agent under the Eurocurrency Credit Agreements, and any
successor thereto.
"EUROCURRENCY CREDIT AGREEMENTS" means, collectively, the Swiss Facility
Agreement and the U.K. Facility Agreement, as each may have been or may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"EUROCURRENCY DOCUMENTATION AGENT" means NationsBank of Texas, N.A., in its
capacity as documentation agent under the Eurocurrency Credit Agreements, and
any successor thereto.
"EUROCURRENCY GUARANTIES" means the "Nu-Kote Guarantees" as defined in the
Eurocurrency Credit Agreements.
"EUROCURRENCY GUARANTY OBLIGATIONS" means all obligations of Holding,
Company and the Material Domestic Subsidiaries under the Eurocurrency
Guaranties.
-11-
"EUROCURRENCY LENDER" means any lender under any Eurocurrency Credit
Agreement.
"EUROCURRENCY LOAN" means one or more of the Advances (as defined below)
made under any Eurocurrency Credit Agreement. For purposes of this definition,
the term "Advance" shall have the meaning ascribed thereto in each such
Eurocurrency Credit Agreement.
"EUROCURRENCY LOAN DOCUMENTS" means the Eurocurrency Credit Agreements, the
Eurocurrency Security Documents, any Interest Hedge Agreements entered into with
any Eurocurrency Lender, and the Eurocurrency Guaranties.
"EUROCURRENCY SECURITY DOCUMENTS" means the "Security Documents" as defined
in the Eurocurrency Credit Agreements.
"EURODOLLAR RATE" means, for any Interest Rate Determination Date, the
offered quotation, if any, to first class banks in the Eurodollar market by
NationsBank for Dollar deposits of amounts in immediately available funds
comparable to the principal amount of the Eurodollar Rate Loans for which the
Eurodollar Rate is being determined with maturities comparable to the Interest
Period for which such Eurodollar Rate will apply as of approximately 9:00 A.M.
(Dallas time) two Business Days prior to the commencement of such Interest
Period.
"EURODOLLAR RATE LOANS" means Revolving Credit Loans bearing interest at
rates determined by reference to the Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"EXCLUDED TAXES" means all taxes imposed on or by reference to the net
income or profit of any Lender or its applicable lending offices and all
franchise taxes, taxes on doing business or taxes measured by capital or net
worth imposed on any Lender or its applicable lending office, in each case,
imposed:
(i) by the jurisdiction in which the applicable lending office or
other branch of such Lender is located or in which such Lender is organized
or has its principal or registered office;
(ii) by reason of any connection between the jurisdiction imposing
such tax and such Lender other than a connection arising solely from this
Agreement or any transaction contemplated hereby;
(iii) by the United States of America or any political subdivision
thereof or therein including without limitation, branch profits taxes
imposed by the United States or similar taxes imposed by any subdivision
thereof; or
-12-
(iv) by reason of the failure of any Lender to provide accurate
documentation required to be provided by such Lender pursuant to
subsection 2.9 hereof.
"EXECUTIVE OFFICER" of any Person means any Chairman of the Board,
President, Chief Financial Officer, Executive Vice President, Senior Vice
President-Finance, Corporate Controller, Treasurer or General Counsel of such
Person.
"EXISTING LETTERS OF CREDIT" means any Letter of Credit existing on the
Closing Date which was an outstanding Letter of Credit under the Original Credit
Agreement.
"EXISTING SELLER NOTES" means (i) the 10% Subordinated Promissory Note due
February 24, 1997 in the original principal amount of $665,000, dated
February 24, 1992, issued by Company in favor of Xxxxxx X. Xxxxx and (ii) the
10% Subordinated Promissory Note due February 24, 1997 in the original principal
amount of $285,000, dated February 24, 1992, issued by Company in favor of
Xxxx X. Xxxxxxxx.
"FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) owned, leased or operated by
Holding, Company or any Material Subsidiary.
"FEDERAL FUNDS RATE" shall mean, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of Dallas, or, if such rate
is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
federal funds brokers of recognized standing selected by it.
"FEE LETTER" means that certain Structure and Arrangement Fee Letter dated
as of October 11, 1996, among the Company, NationsBank and NationsBanc Capital
Markets, Inc.
"FISCAL YEAR" means the fiscal year of Holding and its Subsidiaries.
"FIXED CHARGES" means, for any period, an amount equal to the sum of
(i) total scheduled principal payments (including principal component of Capital
Leases but excluding that certain $2,500,000 Term Loan (as defined in the
Original Credit Agreement) principal payment made on August 24, 1996) with
respect to all outstanding Indebtedness of Holding and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP,
(ii) Consolidated GAAP Capital Expenditures incurred for such period and
(iii) all Restricted Junior Payments paid during such period.
"FOREIGN LENDER" shall have the meaning assigned that term in
subsection 2.9.
"FOREIGN SUBSIDIARY" means a Subsidiary of Holding that is not organized
under the laws of any state within the United States of America or the District
of Columbia.
-13-
"FUNDING DATE" means the date of the funding of a Revolving Credit Loan.
"FUTURE GRAPHICS" means Future Graphics, Inc., a California corporation and
a wholly-owned Subsidiary of Company.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncement of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, that are applicable to the circumstances as of the date of
determination. For purposes of certain calculations, GAAP shall be modified by
the requirements set forth in subsection 1.2.
"GERMAN ASSET TRANSFER" means any Asset Transfer involving fixtures,
machinery and equipment in which such assets are located in Germany immediately
before the Asset Transfer and are located in Switzerland or in the United
Kingdom immediately after the Asset Transfer.
"GOVERNMENT ACTS" has the meaning assigned thereto in subsection 2.8H.
"GREIF" means Xxxxx-Werke GmbH, a German limited liability company and
wholly-owned Subsidiary of Company.
"HARDCOPY DEUTSCHLAND" means Pelikan Hardcopy Deutschland GmbH, a German
limited liability company and wholly-owned Subsidiary of Greif.
"HAZARDOUS MATERIALS" means (i) any oil, petroleum or petroleum derived
substance, any drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, any flammable
substances or explosives, any radioactive materials, any hazardous wastes or
substances, any toxic wastes or substances or any other pollutants, which cause
any Facility to be in violation of any Environmental Laws, (ii) asbestos in any
form which is or could become friable, urea formaldehyde foam insulation, or any
oil or dielectric fluid containing levels of polychlorinated biphenyls in excess
of fifty parts per million; and (iii) any chemical, material or substance
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous waste", "restricted
hazardous waste", or "toxic substances" or words of similar import under any
applicable local, state or federal law or under the regulations adopted or
publications promulgated pursuant thereto, including, without limitation, the
statutes referenced in the definition of "Environmental Laws."
"HIGHEST LAWFUL RATE" means at the particular time in question the maximum
rate of interest which, under Applicable Law, the Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, Lenders are permitted to charge on the Obligations shall change
after the date hereof, the Highest Lawful Rate shall be automatically increased
or decreased, as the case may be, from time to time as of
-14-
the effective time of each change in the Highest Lawful Rate without notice
to Company. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be
(a) the indicated rate ceiling described in and computed in accordance with
the provisions of Section (a)(1) of Art. 1.04, or (b) if the parties
subsequently contract as allowed by Applicable Law, the quarterly ceiling or
the annualized ceiling computed pursuant to Section (d) of Art. 1.04;
provided, however, that at any time the indicated rate ceiling, the quarterly
ceiling or the annualized ceiling shall be less than 18% per annum or more
than 24% per annum, the provisions of Sections (b)(1) and (2) of said Art.
1.04 shall control for purposes of such determination, as applicable.
"HOLDING" has the meaning assigned to that term in the introductory
paragraph to this Agreement.
"HOLDING COMMON STOCK" means the common stock and non-voting common stock
of Holding, par value $.01 per share.
"HOLDING GUARANTY" means the guaranty of Holding set forth in Section 7.
"HOLDING PATENT SECURITY AGREEMENT" means the Patent Security Agreement
executed and delivered by Holding as of February 24, 1995, substantially in the
form annexed to the Original Credit Agreement as EXHIBIT XI thereto, as such
agreement may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"HOLDING PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by Holding as of February 24, 1995, substantially in the form annexed
as EXHIBIT IXA thereto, as such agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"HOLDING SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Holding as of February 24, 1995, substantially in the form annexed
as EXHIBIT XVII thereto, as such agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"HOLDING SECURITY DOCUMENTS" means all of the Holding Guaranty, the Holding
Patent Security Agreement, the Holding Pledge Agreement, the Holding Security
Agreement and the Holding Trademark Pledge.
"HOLDING TRADEMARK PLEDGE" means the Trademark Security Agreement executed
and delivered by Holding as of February 24, 1995, substantially in the form
annexed as EXHIBIT VIII thereto, as such agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"ICMI" means International Communication Materials, Inc., a Pennsylvania
corporation and a wholly-owned Subsidiary of Company.
-15-
"INDEBTEDNESS", as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money whether or not evidenced by a promissory
note, draft or similar instrument, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services, which purchase price is due
more than six months from the date of incurrence of the obligation in respect
thereof, and (v) all indebtedness to the extent secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
"INTEREST COVERAGE RATIO" means, for any period, the ratio of Consolidated
EBITDA to Consolidated Interest Expense.
"INTEREST HEDGE AGREEMENTS" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap, swap or
collar protection agreements, and forward rate currency or interest rate
options, as the same may be amended or modified and in effect from time to time,
and any and all cancellations, buy backs, reversals, terminations or assignments
of any of the foregoing.
"INTEREST PAYMENT DATE" means with respect to any Eurodollar Rate Loan the
last day of each Interest Period applicable to such Eurodollar Rate Loan;
PROVIDED that in the case of each Interest Period of six months, "Interest
Payment Date" shall also mean each Interest Period Anniversary Date for such
Interest Period.
"INTEREST PERIOD" means any interest period applicable to a Eurodollar Rate
Loan as determined pursuant to subsection 2.2B.
"INTEREST PERIOD ANNIVERSARY DATE" means for each Interest Period which is
six months, each three-month anniversary of the commencement of that Interest
Period.
"INTEREST RATE DETERMINATION DATE" means each date for calculating the
Eurodollar Rate for purposes of determining the interest rate in respect of an
Interest Period. The Interest Rate Determination Date shall be the second
Business Day prior to the first day of the related Interest Period for a
Eurodollar Rate Loan.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter.
"INVENTORY" means, on a consolidated basis, all goods, merchandise and
other personal property which are held for sale or lease by Holding and its
Subsidiaries, including those held
-16-
for display or demonstration or out on lease or consignment or to be
furnished under a contract of service, or those which are raw materials,
components, work in process or materials used or consumed, or to be used or
consumed, in the business of Holding or any of its Subsidiaries.
"INVESTMENT", as applied to any Person, means any direct or indirect
purchase or other acquisition by that Person of, or of a beneficial interest in,
capital stock or other Securities of any other Person, or any direct or indirect
loan (including intercompany loans), advance (other than loans or advances to
employees for moving, travel and entertainment expenses, drawing accounts and
similar expenditures made in the ordinary course of business) or capital
contribution by that Person to any other Person, including all indebtedness and
accounts receivable from that other Person other than indebtedness and accounts
receivable that are current assets or arose from sales of goods or services to
that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all
additions thereto and minus the amount of any portion of such Investment repaid
to such Person in cash (including as a return of capital), but without any other
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"ISSUING LENDER" means, with respect to any Letter of Credit, the Lender
that issues or causes its Affiliate to issue such Letter of Credit, determined
as provided in subsection 2.8; PROVIDED, however, that Company shall first
request that NationsBank issue each Letter of Credit.
"LATIN AMERICAN SUBSIDIARIES" means Nu-kote de Colombia S.A., a corporation
organized under the laws of Colombia and a Subsidiary of Company, Mercantiles
S.A., a corporation organized under the laws of Colombia and a Subsidiary of Nu-
Kote de Colombia S.A., Compania Manufactura Onix S.A., a corporation organized
under the laws of Colombia and a Subsidiary of Nu-kote de Colombia S.A., Nu-kote
Internacional de Mexico, S.A. de C.V., a corporation organized under the laws of
Mexico and a Subsidiary of Company and Nu-kote Latin America.
"LENDER" and "LENDERS" have the meanings assigned to such terms in the
introduction to this Agreement; PROVIDED that "Lender" and "Lenders" shall also
include the successors and permitted assignees of Lenders pursuant to
subsection 10.2.
"LETTER OF CREDIT" means any of the letters of credit issued, deemed to be
issued, or to be issued by Issuing Lender for the account of Company, on behalf
of Company or any Material Domestic Subsidiary, pursuant to subsection 2.8 and
for the purposes described in subsection 2.5B (and shall include the Existing
Letters of Credit); PROVIDED that, notwithstanding anything to the contrary
contained herein, any such Letter of Credit may be issued by an Affiliate of a
Lender; PROVIDED, FURTHER, that to the extent that a Letter of Credit is issued
by an Affiliate of a Lender, such Lender shall, for all purposes under this
Agreement, the Loan Documents and all other instruments and documents referred
to herein and therein be deemed to be the "Issuing Lender" with respect to such
Letter of Credit.
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"LETTER OF CREDIT USAGE" means, with respect to any Letter of Credit, as at
any date of determination, the sum of (i) the maximum aggregate amount which is
or at any time thereafter may become available for drawings under such Letter of
Credit then outstanding PLUS (ii) the aggregate amount of all drawings under
such Letter of Credit honored by Issuing Lender and not theretofore reimbursed
by Company.
"LETTER OF DOMESTIC ORGANIZATION" has the meaning assigned to that term in
subsection 2.9.
"LETTER OF NON-EXEMPTION" has the meaning assigned to that term in
subsection 2.9.
"LIEN" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest).
"LOAN DOCUMENTS" means the Domestic Loan Documents and the Eurocurrency
Loan Documents.
"MARGIN STOCK" has the meaning assigned to that term in Regulations G and U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"MATERIAL DOMESTIC SUBSIDIARIES" means ICMI, Future Graphics, Nu-kote
Imaging and each other Domestic Subsidiary of Holding other than Company (a) the
gross revenues of which for the then most recently completed four fiscal
quarters constituted (or, with respect to any Domestic Subsidiary acquired
during such four fiscal quarters, would have constituted had the gross revenues
of such Subsidiary been included for such period) 5% or more of the consolidated
gross revenues of Holding and its Subsidiaries for such period, or (b) the
assets of which as of the end of any fiscal quarter constituted 5% or more of
the consolidated assets of Holding and its Subsidiaries as of the end of such
fiscal quarter. Material Domestic Subsidiaries shall also include (i) any
Domestic Subsidiary of Holding other than Company which is not a direct or
indirect Subsidiary of Company whether or not any of the requirements set forth
in clauses (a) or (b) above are satisfied with respect to such Subsidiary and
(ii) any other Domestic Subsidiary designated as such in written notice from
Holding to Agent.
"MATERIAL FOREIGN SUBSIDIARIES" means Produktions, Pelikan Scotland, Greif
and each other Foreign Subsidiary of Holding (a) the gross revenues of which for
the then most recently completed four fiscal quarters constituted (or, with
respect to any Foreign Subsidiary acquired during such four fiscal quarters,
would have constituted had the gross revenues of such Subsidiary been included
for such period) 5% or more of the consolidated gross revenues of Holding and
its Subsidiaries for such period, or (b) the assets of which as of the end of
any fiscal quarter constituted 5% or more of the consolidated assets of Holding
and its Subsidiaries as of the end of such fiscal quarter; provided, however,
that no Person classified as a Discontinued Operation shall be a Material
Foreign Subsidiary. Material Foreign Subsidiaries shall also include any direct
Foreign Subsidiary of Holding whether or not any of the
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requirements set forth in clause (a) or (b) are satisfied with respect to
such Subsidiary. For purposes of the calculations under clause (a) or (b)
above, revenues and assets of Foreign Subsidiaries shall be converted into
Dollars at the rates used for purposes of preparing the consolidated
financial statements of Holding and its Subsidiaries for each fiscal quarter.
"MATERIAL SUBSIDIARIES" means the Material Domestic Subsidiaries and the
Material Foreign Subsidiaries.
"MAXIMUM AMOUNT" means the maximum amount of interest which, under
Applicable Law, Lenders are permitted to charge on the Obligations.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is maintained for employees of Company or any
ERISA Affiliate of Company or to which Company or any ERISA Affiliate of Company
has, at any time within the preceding five years, made, or been obligated to
make, contributions.
"N-K INTERNATIONAL LIMITED" means N-K International Limited, a corporation
organized under the laws of England.
"NATIONSBANK" means NationsBank of Texas, N.A., a national banking
association.
"NET CASH PROCEEDS" means, with respect to any Asset Sale by any Person,
the cash and readily marketable cash equivalents received by such Person in
connection with such transaction (including cash proceeds of any property
received in consideration of any such Asset Sale) after deducting therefrom
reasonable costs and expenses (including without limitation brokerage
commissions, legal fees, accounting fees, investment banking and underwriting
fees and other similar commissions and fees) and, without duplication, (i) taxes
paid or payable by such Person as a result of such Asset Sale and
(ii) liabilities of such Person secured by any assets subject to such Asset Sale
other than Liens to secure the Obligations or the Eurocurrency Loans.
"NON-COMPETITION AGREEMENTS" mean the (i) Non-Competition Agreement, dated
February 26, 1993, between Xxxxxx Xxxxxxxxx and Future Graphics, (ii) Non-
Competition Agreement, dated as of February 26, 1993, between Xxxxxx Xxxxxxx and
Future Graphics and (iii) Non-Competition Agreement, dated as of February 26,
1993, between Xxxxxx Xxxxx and Future Graphics.
"NOTICE OF BORROWING" means a notice substantially in the form annexed
hereto as EXHIBIT IA with respect to a proposed borrowing of Revolving Credit
Loans.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form annexed hereto as EXHIBIT II with respect to a proposed conversion or
continuation of Revolving Credit Loans.
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"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice substantially in
the form annexed hereto as EXHIBIT IB with respect to a proposed issuance of a
Letter of Credit.
"NU-KOTE IMPERIAL" means Nu-kote Imperial, Ltd., a Delaware corporation and
wholly-owned Subsidiary of Holding.
"NU-KOTE IMAGING" means Nu-kote Imaging International, Inc., a Delaware
corporation and wholly-owned Subsidiary of Company.
"NU-KOTE LATIN AMERICA" means Nu-kote Latin America, Inc., a Delaware
corporation and a wholly-owed Subsidiary of Company.
"OBLIGATIONS" means all obligations and liabilities of every nature of
Holding, and/or Company, and the Material Domestic Subsidiaries from time to
time owed to Agent or Lenders or any of them under this Agreement, or any of the
other Domestic Loan Documents or reimbursement obligations with respect to the
Letters of Credit, including, without limitation, all liability of Company for
principal and interest on the Revolving Credit Loans or reimbursement
obligations owed to Agent or Lenders with respect to the Letters of Credit and
all interest thereon or for fees or expenses, reimbursements and
indemnifications and other amounts due or to become due hereunder or thereunder.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a certificate
executed on behalf of such corporation by its Chief Executive Officer, its
President, its Chief Financial Officer, its Corporate Controller or its
Treasurer; PROVIDED, that every Officers' Certificate with respect to the
compliance with a condition precedent to the making of any Revolving Credit
Loans hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement and the other Loan
Documents relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion as
to whether or not such condition has been complied with, and (iii) a statement
as to whether, in the opinion of the signers, such condition has been complied
with.
"OPERATING LEASE" means, as applied to any Person, any lease (including,
without limitation, leases that may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"ORIGINAL CREDIT AGREEMENT" has the meaning assigned to that term in the
Recitals to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
thereto).
"PELIKAN" means Pelikan Holding AG, a Swiss corporation.
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"PELIKAN ACQUISITION" means the acquisition on or about February 24, 1995
by Holding or one or more of its designated subsidiaries of the worldwide
hardcopy supply business of Pelikan through the acquisition of (i) substantially
all of the assets relating to the hardcopy division of Pelikan, Inc., a
Tennessee corporation, (ii) all of the issued and outstanding shares of
Produktions, (iii) all of the issued and outstanding shares of Pelikan Scotland,
(iv) all of the registered share capital of Greif, and (v) certain other assets
of Pelikan's sales and distribution companies located throughout Europe.
"PELIKAN HARDCOPY" means Pelikan Hardcopy (International) AG, a Swiss stock
company and wholly-owned Subsidiary of Produktions (other than for directors'
qualifying shares).
"PELIKAN PURCHASE AGREEMENT" means that certain Asset and Stock Purchase
Agreement, dated as of November 15, 1994, between Holding and Pelikan, as
modified and supplemented.
"PELIKAN RESTRUCTURING" means the restructuring of Holding and its
Subsidiaries contemplated by or in connection with the Pelikan Acquisition as
disclosed in writing specifically addressed to Lenders prior to February 24,
1995.
"PELIKAN SCOTLAND" means Pelikan Scotland Ltd., a limited liability company
organized under the laws of England and Wales and a wholly-owned Subsidiary of
Company.
"PENSION PLAN" means any employee pension benefit plan described in
Section 3(2) of ERISA which is subject to Section 412 of the Internal Revenue
Code and which is maintained by Company or any ERISA Affiliate of Company for
employees of Company or any ERISA Affiliate of Company, other than a
Multiemployer Plan.
"PERMITTED ACQUISITIONS" means acquisitions permitted pursuant to
subsection 6.7B(ii).
"PERMITTED ENCUMBRANCES" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not at the time required by subsection 5.3A;
(ii) Statutory Liens of landlords, Liens of carriers, warehousemen,
mechanics, materialmen, repairmen and suppliers, and other Liens incurred
in the ordinary course of business for sums not yet delinquent for a period
of more than 60 days, or being contested in good faith if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;
(iii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds, trade
contracts (other than for borrowed money), self-retention, reimbursement
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or indemnity agreements as to insurance policies and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money);
(iv) Any attachment, judgment or similar Lien unless the writ,
judgment or other process it secures shall, within 60 days after the entry
thereof, not have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within 60 days after the
expiration of any such stay, and shall not be a matter that is adequately
covered by insurance and with respect to which the insurer has acknowledged
coverage in writing and any lis pendens provided the litigation related
thereto is being contested in good faith;
(v) Easements, rights-of-way, restrictions, covenants, conditions,
licenses, zoning requirements, minor defects or irregularities in title and
other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of Holding and its
Subsidiaries or materially adversely affecting the value of the relevant
property;
(vi) Any interest or title of a lessor or lessee under any lease
permitted by this Agreement (including any Lien granted by such lessor or
lessee);
(vii) unperfected purchase-money Liens on Inventory incurred in
the ordinary course of business and Liens on goods for sale on consignment
or a similar basis;
(viii) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods;
(ix) Liens on Inventory of Foreign Subsidiaries arising out of
retention of title arrangements for the supply of Inventory in the ordinary
course; and
(x) Licenses, shop rights and covenants not to xxx and options
therefor entered into in the ordinary course with respect to patents,
trademarks and other intellectual property (including all registrations
thereof and applications to register therefor).
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, vehicle
trusts, business trusts, or other organizations, whether or not legal entities,
agencies, governments and political subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after notice
or lapse of time or both, would constitute an Event of Default if that condition
or event were not cured or removed within any applicable grace or cure period.
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"PRO RATA SHARE" means in relation to any Lender as of any date of
determination, as applicable, the percentage obtained by dividing the aggregate
amount of such Lender's Revolving Credit Commitment by the aggregate amount of
the Revolving Credit Commitments of all Lenders.
"PRODUKTIONS" means Pelikan Produktions AG, a Swiss stock company and
wholly-owned Subsidiary of Company.
"PROPOSED CLOSED FACILITIES" means those Facilities and related assets
owned by Company and/or its Subsidiaries on February 24, 1995 and which were
proposed to be closed after February 24, 1995, as described in writing
specifically addressed to Lenders prior to February 24, 1995.
"PROXY STATEMENT" means that certain Proxy Statement, dated February 10,
1995 relating to the Special Meeting of Stockholders of Nu-Kote Holding, Inc. to
be held February 23, 1995 for the purpose, among others, of approving the
Pelikan Acquisition.
"QUALIFYING BANKS" has the meaning assigned to that term in the definition
of Cash Equivalents set forth above in this subsection 1.1.
"RECALCULATION DATE" has the meaning assigned to that term in
subsection 5.11A.
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, or migration of any Hazardous
Material in, by, from or related to any Facility into the indoor or outdoor
environment, including through the air, soil, surface water or groundwater.
"REQUISITE LENDERS" means, at any time, Lenders and Eurocurrency Lenders
having 66-2/3% or more of the combined aggregate amount at such time of (i) the
aggregate amount of the Revolving Credit Commitments or, in case the Revolving
Credit Commitments have been terminated, the outstanding principal amount of the
Revolving Credit Loans, if any, made thereunder and (ii) the aggregate of the
sum of the Commitments (as defined in the relevant Eurocurrency Credit
Agreement). For purposes of determining the Requisite Lenders, any amounts
denominated in (a) Pounds Sterling shall be translated into Dollars utilizing
the same exchange rate pursuant to which the aggregate amount as of the Closing
Date of the Commitments in such currency under the U.K. Credit Agreement was
determined and (b) Swiss Francs shall be translated into Dollars utilizing the
same exchange rate pursuant to which the aggregate amount as of the Closing Date
of the Commitments in such currency under the Swiss Credit Agreement was
determined.
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"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Holding
now or hereafter outstanding, except a dividend payable solely in shares of that
class of stock to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of stock of Holding now or hereafter
outstanding, (iii) any payment or prepayment of principal of, premium, if any,
or interest on, redemption, purchase, repurchase, retirement, defeasance,
sinking fund or similar payment or deposit for payment with respect to, any
Subordinated Debt, and (iv) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Holding, Company or any of their Subsidiaries
now or hereafter outstanding (other than any such rights held by Holding or a
Subsidiary thereof).
"REVOLVING CREDIT COMMITMENT" or "REVOLVING CREDIT COMMITMENTS" has the
meaning set forth in subsection 2.1A.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" means October 15, 2001 or
such earlier date, if any, upon which the Commitments are terminated and all
Obligations are paid in full or become immediately due and payable.
"REVOLVING CREDIT LOANS" means the Revolving Credit Loans made by Lenders
to Company pursuant to subsection 2.1A.
"REVOLVING CREDIT NOTE" means each promissory note of Company evidencing
the obligation to repay Revolving Credit Loans hereunder, substantially in the
form annexed hereto as EXHIBIT VIII, as amended, amended and restated,
supplemented, extended, renewed or otherwise modified from time to time, and any
substitution therefor.
"SALE/LEASEBACK" has the meaning assigned to that term in subsection 6.8.
"SECURITIES" means any capital stock or shares thereof, voting trust
certificates, bonds, debentures, options, warrants, notes, or other evidences of
indebtedness (other than accounts receivable), secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities".
"SOLVENT" means, with respect to any Person, that as of the date of
determination (i) the then fair value of the property of such Person is greater
than the total amount of liabilities (including Contingent Obligations) of such
Person and the then fair saleable value of the assets of such Person is greater
than the amount that will be required to pay the probable liabilities on such
Person's then existing debts as they become absolute and matured, considering
all financing alternatives and potential asset sales reasonably available to
such Person; (ii) such Person's capital is not unreasonably small in relation to
its business or any contemplated or undertaken transaction; and (iii) such
Person does not intend to incur, or believe or reasonably should believe that it
will incur, debts beyond its ability to pay such debts as they become due.
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"STANDBY LETTERS OF CREDIT" means a letter of credit under which Issuing
Lender agrees to make payments for the account of Company, on behalf of Company
or any Material Domestic Subsidiary, in respect of obligations of Company or any
Material Domestic Subsidiary incurred pursuant to contracts made or performances
undertaken or to be undertaken or like matters relating to contracts to which
Company or any Material Domestic Subsidiary is or proposes to become a party in
the ordinary course of its business, including, without limiting the foregoing,
for insurance purposes or in respect of advance payments or as bid or
performance bonds or for any other purpose for which a standby letter of credit
might customarily be issued.
"SUBORDINATED DEBT" means any Indebtedness of Holding or its Subsidiaries
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
reasonably satisfactory to Agent and Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock generally entitled (other than only by reason of the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"SUBSIDIARY GUARANTY" means each Subsidiary Guaranty executed and delivered
by each Material Domestic Subsidiary as of February 24, 1995, substantially in
the form annexed to the Original Credit Agreement as EXHIBIT XIII thereto, as
such agreements may be amended, amended and restated, supplemented or otherwise
modified from time to time.
"SUBSIDIARY PATENT SECURITY AGREEMENT" means each Patent Security Agreement
executed and delivered by ICMI, Future Graphics, Nu-kote Imaging and Nu-kote
Imperial as of February 24, 1995, substantially in the form annexed to the
Original Credit Agreement as EXHIBIT XI thereto, as such agreement may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"SUBSIDIARY SECURITY AGREEMENT" means each Security Agreement executed and
delivered by ICMI, Future Graphics, Nu-kote Imaging and Nu-kote Imperial as of
February 24, 1995, substantially in the form annexed to the Original Credit
Agreement as EXHIBIT XII thereto, as such agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"SUBSIDIARY SECURITY DOCUMENTS" means any or all of the Subsidiary Security
Agreements, the Subsidiary Guaranties, the Subsidiary Trademark Pledges and the
Subsidiary Patent Security Agreements.
"SUBSIDIARY TRADEMARK PLEDGE" means each Trademark Security Agreement
executed and delivered by ICMI, Future Graphics, Nu-kote Imaging and Nu-kote
Imperial as of February 24, 1995, substantially in the form annexed to the
Original Credit Agreement as EXHIBIT VIII
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thereto, as such agreement may be amended, amended and restated,
supplemented or otherwise modified from time to time.
"SWISS FACILITY AGREEMENT" means that certain Amended and Restated
Revolving Credit Facility Agreement, dated as of October 11, 1996, among
Eurocurrency Administrative Agent, Eurocurrency Documentation Agent, the
Eurocurrency Collateral Agent, BZW and NationsBanc Capital Markets, Inc., as
arrangers, the lenders party thereto and Produktions and Pelikan Hardcopy, as
amended, amended and restated, supplemented or otherwise modified from time to
time.
"SWISS/U.K. TRANSFER" means any Asset Transfer involving fixtures,
machinery and equipment in which such assets are located in Switzerland
immediately before the Asset Transfer and are located in the United Kingdom
immediately after the Asset Transfer.
"TERMINATION EVENT" means (i) a "Reportable Event' described in
Section 4043 of ERISA and the regulations issued thereunder other than any such
Event with respect to which the 30-day notice requirement has been waived by
regulations of the PBGC and other than an event described in Section 4043(c)(9)
of ERISA, or (ii) the withdrawal of Company or any of its ERISA Affiliates from
a Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) or 4062(e) of ERISA, or (iii) the provision to
affected parties of a notice or intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate a Pension Plan by the
PBGC, or (v) any other event or condition that would reasonably be expected to
constitute grounds under ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or (vi) the imposition of a lien
pursuant to Section 412(n) of the Internal Revenue Code.
"TOTAL UTILIZATION OF REVOLVING CREDIT COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Credit Loans, (ii) the aggregate Letter of Credit Usage.
"U.K. FACILITY AGREEMENT" means that certain Amended and Restated Revolving
Credit Facility Agreement, dated as of October 11, 1996, among Eurocurrency
Administrative Agent, the Eurocurrency Collateral Agent, Eurocurrency
Documentation Agent, BZW and NationsBanc Capital Markets, Inc., as arrangers,
the lenders party thereto and Pelikan Scotland, as amended, amended and
restated, supplemented or otherwise modified from time to time.
"U.K. HOLDING" means N-K International Holding Limited, a corporation
organized under the laws of England.
"U.K. SUBSIDIARIES" means U.K. Holding and N-K International.
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"U.K./SWISS TRANSFER" means any Asset Transfer involving fixtures,
machinery and equipment in which such assets are located in the United Kingdom
immediately before the Asset Transfer and are located in Switzerland immediately
after the Asset Transfer.
"UNISYS ACQUISITION AGREEMENT" means the Acquisition Agreement between
Xxxxxx Xxxxxxxxxxx and Company, dated as of November 20, 1987, as amended by the
letter agreement, dated January 14, 1987, and the Release Agreement, dated as of
January 25, 1990.
"U.S. ASSET SALE" means any Asset Sale transaction involving assets located
in the United States described in Section 6.7B(iii)(E), and shall not include
any Asset Sale transactions described in Section 6.7B(iii)(B), (C), (D) or (F)
or in the second PROVISO to Section 6.7(B)(iii).
"U.S./FOREIGN TRANSFER" means any Asset Transfer involving fixtures,
machinery and equipment in which such assets are located in the United States
immediately before the Asset Transfer and are located outside the United States
immediately after the Asset Transfer.
"U.S./U.S. TRANSFER" means any Asset Transfer involving fixtures, machinery
and equipment in which such assets, both immediately before and after the Asset
Transfer, are and remain in the United States.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement; Calculations; Computations
For purposes of this Agreement, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity with GAAP.
Financial statements and other information required to be delivered by Company
to Lenders pursuant to clauses (i) and (ii) of subsection 5.1 shall be prepared
in accordance with GAAP as in effect on the date of such financial statements;
amounts used for determining compliance with the financial covenants set forth
in subsection 6.6 shall be computed in accordance with GAAP as in effect on
March 31, 1994. To the extent that the determination of compliance with any
covenant contained in subsections 6.1, 6.2, 6.3, 6.4 and 6.7B hereof requires
the conversion to Dollars of foreign currency amounts, such Dollar amount shall
be the Dollar Equivalent of the amount of such foreign currency at the time such
item is to be or originally was incurred, created or suffered or permitted to
exist or assumed or transferred or sold for purposes of this Agreement (except
if such item was incurred, created or assumed, or suffered or permitted to exist
or transferred or sold prior to the date hereof, such conversion shall be made
based on the Dollar Equivalent of the amounts of such foreign currency at the
date hereof).
1.3 Other Definitional Provisions
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference.
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SECTION 2. AMOUNTS AND TERMS OF REVOLVING CREDIT COMMITMENTS AND REVOLVING
CREDIT LOANS
2.1
A. REVOLVING CREDIT COMMITMENTS.
Subject to the terms and conditions of this Agreement and in reliance upon
the representations and warranties of Company herein set forth, each Lender
hereby severally agrees to lend to Company from time to time on or after the
Closing Date to but excluding the Revolving Credit Commitment Termination Date
such additional amounts which would not cause the outstanding principal amount
of its Revolving Credit Loans to at any time exceed its Pro Rata Share of the
aggregate Revolving Credit Commitments (as defined below) to be used for the
purposes identified in subsection 2.5A. Each Lender's commitment to make
Revolving Credit Loans to Company pursuant to this subsection 2.1A is herein
called its "REVOLVING CREDIT COMMITMENT" and such commitments of all Lenders in
the aggregate are herein called the "REVOLVING CREDIT COMMITMENTS". The
original amount of each Lender's Revolving Credit Commitment is set forth on
SCHEDULE 1.1 annexed hereto and the aggregate initial amount of the Revolving
Credit Commitments is $150,000,000. Each Lender's Revolving Credit Commitment
shall expire on the Revolving Credit Commitment Termination Date and all
Revolving Credit Loans and all other amounts owed hereunder with respect to the
Revolving Credit Loans shall be paid in full no later than that date. The
amount of the Revolving Credit Commitments shall be reduced by the amount of all
reductions thereof made pursuant to subsection 2.4E through the date of
determination. In no event shall the aggregate outstanding principal amount of
the Revolving Credit Loans from any Lender at any time exceed its Revolving
Credit Commitment then in effect.
Subject to subsection 2.6D, all Revolving Credit Loans under this Agreement
shall be made by Lenders simultaneously and proportionately to their Pro Rata
Shares of the Revolving Credit Commitments, it being understood that no Lender
shall be responsible for any default by any other Lender in that other Lender's
obligation to make Revolving Credit Loans hereunder nor shall the Revolving
Credit Commitment of any Lender be increased or decreased as a result of the
default by any other Lender in that other Lender's obligation to make Revolving
Credit Loans hereunder. Amounts borrowed by Company under this subsection 2.1A
may be repaid and, to but excluding the Revolving Credit Commitment Termination
Date, reborrowed.
Notwithstanding the foregoing provisions of this subsection 2.1A and the
provisions of subsection 2.1B, the extensions of credit under the Revolving
Credit Commitments shall be subject to the following limitations in the amounts
and during the periods indicated:
(1) The amount otherwise available for borrowing under the Revolving
Credit Commitment as of any time of determination (other than to reimburse
Issuing Lender for the amount of any drawings under any Letters of Credit
honored by Issuing Lender
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and not theretofore reimbursed by Company) shall be reduced by the
aggregate Letter of Credit Usage as of such time of determination;
(2) At no time shall the Total Utilization of Revolving Credit
Commitments exceed $150,000,000; and
(3) In no event shall any Lender's Pro Rata Share of the Total
Utilization of Revolving Credit Commitments as of any date of determination
exceed its Revolving Credit Commitment then in effect.
B. NOTICE OF BORROWING. Subject to subsection 2.1A, whenever Company
desires to borrow Revolving Credit Loans under this subsection 2.1 it shall
deliver to Agent a Notice of Borrowing no later than 12:00 noon (Dallas time)
(i) on the date of the proposed Funding Date, in the case of a requested Base
Rate Loan, and (ii) two Business Days in advance of the proposed Funding Date,
in the case of a requested Eurodollar Rate Loan. The Notice of Borrowing shall
specify (a) the proposed Funding Date (which shall be a Business Day), (b) the
amount of the proposed Revolving Credit Loan, (c) whether such Revolving Credit
Loans are initially to consist of Base Rate Loans or Eurodollar Rate Loans or a
combination thereof, (d) if such Revolving Credit Loans, or any portion thereof,
are initially to be Eurodollar Rate Loans, the amounts thereof and the initial
Interest Periods therefor, and (e) that the Total Utilization of Revolving
Credit Commitments (after giving effect to the Revolving Credit Loans then
requested) will not exceed the Revolving Credit Commitments then in effect.
Base Rate Loans shall be made in an aggregate minimum amount of $500,000 and
integral multiples of $500,000 in excess of that amount. Eurodollar Loans shall
be made in an aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount. Revolving Credit Loans may be continued as
or converted into Base Rate Loans and Eurodollar Rate Loans in the manner
provided in subsection 2.2D after the Closing Date. In lieu of delivering the
above-described Notice of Borrowing, Company may give Agent telephonic notice by
the required time of any proposed borrowing of Revolving Credit Loans under this
subsection 2.1; PROVIDED that such notice shall be promptly confirmed in writing
by delivery of a Notice of Borrowing to Agent on or prior to the Funding Date of
the requested Revolving Credit Loans.
Neither Agent nor any Lender shall incur any liability to Company in acting
upon any telephonic notice referred to above that Agent believes in good faith
to have been given by a duly authorized officer or other person authorized to
borrow on behalf of Company or for otherwise acting in good faith under this
subsection 2.1B and upon funding of Revolving Credit Loans by Lenders in
accordance with this Agreement pursuant to any such telephonic notice, Company
shall have effected Revolving Credit Loans hereunder.
Except as provided in subsection 2.6D and except in any instance in which
Company makes a payment as contemplated by subsection 2.6E, a Notice of
Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on the related Interest Rate Determination Date, and
Company shall be bound to make a borrowing in accordance therewith.
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C. DISBURSEMENT OF FUNDS. Promptly after receipt of a Notice of
Borrowing relating to a Revolving Credit Loan pursuant to subsection 2.1B (or
telephonic notice thereof), Agent shall notify each Lender of the proposed
borrowing. Each Lender shall make the amount of its Revolving Credit Loan
available to Agent, in same day funds, at the office of Agent located at
NationsBank Plaza, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000 not later
than 1:00 P.M. (Dallas time) on the Funding Date. Upon satisfaction or waiver
of the conditions precedent specified in subsection 3.1 and 3.2, Agent shall
make the proceeds of such Revolving Credit Loans available to Company on such
Funding Date by causing an amount of same day funds equal to the proceeds of all
such Revolving Credit Loans received by Agent to be credited to the account of
Company at such office of Agent, Account Number 1291369149, ABA #000000000.
Unless Agent shall have been notified by any Lender prior to any Funding
Date in respect of any Revolving Credit Loans that such Lender does not intend
to make available to Agent the amount of such Lender's Revolving Credit Loan to
be funded on such Funding Date (which such notice, if so received by Agent,
shall promptly be communicated to Company), Agent may assume that such Lender
has made such amount available to Agent on such Funding Date and Agent in its
sole discretion may, but shall not be obligated to, make available to Company a
corresponding amount on such Funding Date. If such corresponding amount is not
in fact made available to Agent by such Lender, Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Agent, at the Federal Funds Rate in effect from time to time for
three Business Days and thereafter at the Base Rate. If such Lender does not
pay such corresponding amount forthwith upon Agent's demand therefor, (i) Agent
shall promptly notify Company, and Company shall immediately pay such
corresponding amount to Agent and (ii) notwithstanding subsection 6.1, Company
may borrow a like amount on an unsecured basis from any Person for a period
ending on the date upon which such Lender does in fact make such amount of such
Lender's Revolving Credit Loan available. Nothing in this subsection 2.1C (and
no such borrowing by Company) shall be deemed to relieve any Lender from its
obligation to fulfill its Revolving Credit Commitment hereunder or to prejudice
any rights that Company may have against any Lender as a result of any default
by such Lender hereunder, and such unsecured borrowing shall not be deemed to
increase the amount of Lenders' Revolving Credit Commitments hereunder.
D. REGISTER.
(i) Agent shall maintain a register (the "REGISTER") on which it will
record the Commitments from time to time of each of the Lenders, the
Revolving Credit Loans maintained or made by each of the Lenders and each
repayment in respect of the principal amount of the Revolving Credit Loans
of each Lender. Any such recordation shall be conclusive and binding,
absent manifest error.
(ii) Each Lender will record on its internal records the amount of
each Revolving Credit Loan maintained or made by it and each payment in
respect thereof. Failure to make any such recordation, or any error in
such recordation, shall not affect
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the Obligations of Company in respect of such Revolving Credit Loans.
Any such recordation shall be conclusive and binding, absent manifest
error.
2.2 Interest on the Revolving Credit Loans
A. RATE OF INTEREST. Subject to the provisions of subsections 2.2E and
2.9, each Revolving Credit Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
Eurodollar Rate. The applicable basis for determining the rate of interest
shall be selected by Company initially at the time a Notice of Borrowing is
given pursuant to subsection 2.1B. The basis for determining the interest rate
with respect to any Revolving Credit Loan may be changed from time to time
pursuant to subsection 2.2D. If on any day a Revolving Credit Loan is
outstanding with respect to which notice has not been delivered to Agent in
accordance with the terms of this Agreement specifying the basis for determining
the rate of interest, then for that day that Revolving Credit Loan shall bear
interest determined by reference to the Base Rate.
The Revolving Credit Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the lesser of (i) the Base Rate and
(ii) the Highest Lawful Rate; and
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate PLUS the Applicable Margin, which at no time shall exceed
the Highest Lawful Rate.
If the amount of interest payable in respect of any interest computation
pursuant to clause (i) above is reduced to Highest Lawful Rate and the amount of
interest payable in respect of any subsequent interest computation period would
be less than the Maximum Amount, then the amount of interest payable in respect
of such subsequent interest computation period shall be automatically increased
to the Maximum Amount; PROVIDED that at no time shall the aggregate amount by
which interest paid has been increased pursuant to this sentence exceed the
aggregate amount by which interest has been reduced pursuant to clause (i) above
of this subsection 2.2A.
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Company shall elect an interest period (each an "INTEREST PERIOD") to be
applicable to such Eurodollar Rate Loan, which Interest Period shall be either a
one, two, three or six-month period; PROVIDED that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date of such Eurodollar Rate Loan or, in the case
of any Revolving Credit Loan that is borrowed as a Base Rate Loan and
thereafter converted into a Eurodollar Rate Loan pursuant to
subsection 2.2D, on the date such Revolving Credit Loan is so converted;
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(ii) in the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED that if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) below, end on the last Business Day of a calendar
month;
(v) no Interest Period with respect to any Eurodollar Rate Loan shall
extend beyond the Commitment Termination Date;
(vi) the Interest Period for a Revolving Credit Loan that is converted
pursuant to subsection 2.6D shall commence on the date of such conversion
and shall expire on the date on which the Interest Period for the Revolving
Credit Loans of the other Lenders that were not converted expires; and
(vii) there shall be no more than five (5) Interest Periods
relating to Eurodollar Rate Loans outstanding at any time.
C. INTEREST PAYMENTS. Subject to subsection 2.2E, interest shall be
payable on the Revolving Credit Loans as follows:
(i) interest on each Base Rate Loan shall be payable in arrears on
and to (but not including) the last Business Day of each fiscal quarter of
each year, commencing on the first such date to occur after the Closing
Date, and at maturity; and
(ii) interest on each Eurodollar Rate Loan shall be payable in arrears
on and to (but not including) each Interest Payment Date applicable to that
Eurodollar Rate Loan, upon any prepayment of that Eurodollar Rate Loan (to
the extent accrued on the amount being prepaid) and at maturity.
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of the outstanding Revolving Credit Loans from Revolving Credit Loans
bearing interest at a rate determined by reference to one basis to Revolving
Credit Loans bearing interest at a rate determined by reference to an
alternative basis, or (ii) upon the expiration of any Interest Period applicable
to a Eurodollar Rate Loan, to continue all or any portion of such Revolving
Credit Loan equal to
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$5,000,000 and integral multiples of $1,000,000 in excess of that amount as a
Eurodollar Rate Loan and the succeeding Interest Period(s) of such continued
Revolving Credit Loan shall commence on the last day of the Interest Period
of the Revolving Credit Loan to be continued; PROVIDED, HOWEVER, Eurodollar
Rate Loans may only be converted into Revolving Credit Loans bearing interest
determined by reference to an alternative basis on the expiration date of an
Interest Period applicable thereto; PROVIDED, FURTHER, that no outstanding
Revolving Credit Loan may be continued as, or be converted into, a Eurodollar
Rate Loan when any Event of Default or Potential Event of Default has
occurred and is continuing; and PROVIDED, FURTHER, that, subject to the
provisions of subsection 2.6 and the preceding proviso, no outstanding
Revolving Credit Loan may be converted into a Base Rate Loan during the
period from December 15 of any year to, and including, January 15 of the
immediately succeeding year.
Company shall deliver a Notice of Conversion/Continuation to Agent no later
than 12:00 noon (Dallas time) at least three Business Days in advance of the
proposed conversion/continuation date. A Notice of Conversion/Continuation
shall certify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount of the Revolving Credit Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation,
(iv) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, the requested Interest Period, and (v) in the case of conversion of a Base
Rate Loan to a Eurodollar Rate Loan or continuation of a Eurodollar Rate Loan,
that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Agent telephonic notice by the
required time of any proposed conversion/continuation under this
subsection 2.2D; PROVIDED that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Agent on or before
the proposed conversion/continuation date; PROVIDED, FURTHER, that if Company
shall not have complied with such notice provisions, Company shall be deemed
irrevocably to have requested that such Eurodollar Rate Loan be converted to a
Base Rate Loan in the same principal amount.
Neither Agent nor any Lender shall incur any liability to Company in acting
upon any telephonic notice referred to above that Agent believes in good faith
to have been given by a duly authorized officer or other person authorized to
act on behalf of Company or for otherwise acting in good faith under this
subsection 2.2D and upon conversion/continuation by Agent in accordance with
this Agreement, pursuant to any telephonic notice, Company shall have effected
such conversion or continuation, as the case may be, hereunder.
Except as provided in subsection 2.6D and except in any instance in which
Company makes a payment as contemplated by subsection 2.6E, a Notice of
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate
Loan (or telephonic notice in lieu thereof) shall be irrevocable after the
related Interest Rate Determination Date, and Company shall be bound to convert
or continue in accordance therewith.
E. DEFAULT RATE; POST MATURITY INTEREST. Any principal payments on the
Revolving Credit Loans not paid when due and, to the extent permitted by
Applicable Law, any interest
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payments on the Revolving Credit Loans, Commitment Fees and compensation
payable in respect of Letters of Credit pursuant to subsection 2.8E not paid
when due and any other fees and other amounts payable hereunder not paid
within 10 days of the date when due (the "DUE DATE"), in each case whether at
stated maturity, by notice of prepayment, by acceleration or otherwise, shall
upon delivery of written notice to Company from Agent bear interest from and
after the Due Date payable upon demand at a rate that is two percent (2%) per
annum in excess of the rate of interest otherwise payable under this
Agreement (or, in the case of fees and other amounts due hereunder, at the
Base Rate PLUS 2%), but in any case not in excess of the Highest Lawful Rate;
PROVIDED that, in the case of Eurodollar Rate Loans, upon the expiration of
the Interest Period in effect at the time any such increase in interest rate
is effective, such Eurodollar Rate Loans shall thereupon become Base Rate
Loans and thereafter bear interest payable upon demand at a rate which is two
percent (2%) per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans but not in excess of the Highest Lawful
Rate. The payment or acceptance of the increased rate provided by this
subsection 2.2E shall not constitute a waiver of any Event of Default or an
amendment to this Agreement or otherwise prejudice or limit any rights or
remedies of Agent or any Lender.
F. COMPUTATION OF INTEREST. Subject to subsection 10.18, interest on the
Revolving Credit Loans shall be computed on the basis of a 360-day year and the
actual number of days elapsed in the period during which it accrues. In
computing interest on any Revolving Credit Loan, the date of the making of such
Revolving Credit Loan or the first day of an Interest Period applicable to such
Revolving Credit Loan or, with respect to a Base Rate Loan being converted from
a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to
such Base Rate Loan, shall be included; and the date of payment of such
Eurodollar Rate Loan or the expiration date of an Interest Period applicable to
such Eurodollar Rate Loan, or with respect to a Base Rate Loan being converted
to a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, shall be excluded; PROVIDED that if a Revolving Credit
Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Revolving Credit Loan.
2.3 Fees
A. COMMITMENT FEE. Company agrees to pay to Agent for distribution to
each Lender in proportion to that Lender's Pro Rata Share of the Revolving
Credit Commitments commitment fees ("COMMITMENT FEES") for the period from and
including the Closing Date to but excluding the Revolving Credit Commitment
Termination Date equal to the average of the daily unused portion of the
Revolving Credit Commitments MULTIPLIED by the applicable Commitment Fee
Percentage, such Commitment Fees to be calculated, subject to subsection 10.18,
on the basis of a 360-day year and the actual number of days elapsed and to be
payable in arrears on and to (but not including) the last Business Day of each
fiscal quarter of each year, commencing on the first such date to occur after
the Closing Date, and upon the Revolving Credit Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding, for
purposes of calculating the Commitment Fees payable by Company pursuant to this
subsection 2.3A the "unused portion of the Revolving Credit Commitments",
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as of any date of determination, shall be an amount equal to the aggregate
amount of Revolving Credit Commitments (as the same may have been reduced
pursuant to subsection 2.4E) as of such date MINUS the aggregate principal
amount of all outstanding Revolving Credit Loans on such date, and the unused
portion of the Revolving Credit Commitments shall not be reduced by reason of
the issuance of Letters of Credit or by any limitation of the amount
available for borrowing thereunder set forth in the numbered paragraphs of
subsection 2.1A.
B. FACILITY FEE. Subject to Section 10.18, Company agrees to pay to
Agent, for the account of each Lender (other than NationsBank), a one-time
facility fee equal to the product of (i) 0.10% times (ii) the sum of (x) such
Lender's Revolving Credit Commitment plus (y) such Lender's Commitments under
the Eurocurrency Credit Agreements. Such fees shall be payable on the Closing
Date, shall be fully-earned when due, subject to Section 10.18, non-refundable
when paid, and shall be payable in Dollars. For the purposes of calculating
such fees, any amounts denominated in (a) Pounds Sterling shall be translated
into Dollars utilizing the same exchange rate pursuant to which the aggregate
amount as of the Closing Date of Commitments in such currency under the U.K.
Credit Agreement was determined and (b) Swiss Francs shall be translated into
Dollars utilizing the same exchange rate pursuant to which the aggregate amount
as of the Closing Date of Commitments in such currency under the Swiss Credit
Agreement was determined.
C. OTHER FEES. Company agrees to pay to Agent, for its own account, the
fees provided for in the Fee Letter in the amounts and on the dates as provided
therein.
2.4 Prepayments and Payments of Revolving Credit Loans; Reductions in
Revolving Credit Loan Commitments
A. PREPAYMENTS.
(i) VOLUNTARY REPAYMENTS OF REVOLVING CREDIT LOANS. Company may,
upon prior written or telephonic notice by no later than 12:00 noon (Dallas
time) on the date of repayment (in the case of Base Rate Loans) or on the
date which is not less than three Business Days prior to the date of
repayment (in the case of Eurodollar Rate Loans) confirmed in writing to
Agent (which notice Agent will promptly transmit by telegram, telex or
telephone to each Lender, any such telephonic notice to be promptly
confirmed by Agent in writing) specifying the Revolving Credit Loan or
Revolving Credit Loans to which such repayment is to be applied, at any
time and from time to time repay Revolving Credit Loans. Prepayment of
Eurodollar Rate Loans shall be in an aggregate minimum amount of $2,500,000
and integral multiples of $500,000 in excess of that amount or, if such
Eurodollar Rate Loans are less than $2,500,000, in the then remaining
amount of such Revolving Credit Loans. Repayment of Base Rate Loans shall
be in an aggregate minimum amount of $500,000 and multiples of $100,000 in
excess of that amount. If the notice of repayment does not specify how
such repayment shall be applied, it shall be applied first to Base Rate
Loans to the full extent thereof before application to Eurodollar Rate
Loans, as determined by Agent. Notice of repayment
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having been given as aforesaid, the principal amount of the Revolving
Credit Loans specified in such notice shall become due and payable on
the repayment date.
(ii) MANDATORY PREPAYMENT OF REVOLVING CREDIT LOANS. At such time, if
any, that the net book value of assets (including stock of any Subsidiary
which is not a Material Subsidiary) of Holding, Company or any Subsidiary
disposed of in a U.S. Asset Sale since February 24, 1995 exceeds $5,000,000
in the aggregate, Company shall, within 2 Business Days of the date of
receipt of any Net Cash Proceeds from any such U.S. Asset Sale thereafter
(or within 2 Business Days of the date of receipt of any portion of Net
Cash Proceeds from one such U.S. Asset Sale that results in the aggregate
net book value of all assets disposed of in such U.S. Asset Sales to exceed
$5,000,000), prepay an aggregate principal amount of the Revolving Credit
Loans in an amount equal to 50% of the amount of such Net Cash Proceeds.
(iii) APPLICATION OF REPAYMENTS. All repayments of Eurodollar
Rate Loans shall include payment of accrued interest on the principal
amount thereof so repaid and shall be applied to the payment of such
interest before application to such principal. With respect to different
Revolving Credit Loans being repaid separately, any repayment shall be
applied first to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in the order determined by Agent
unless, with respect to voluntary repayments, Company indicates otherwise
in its notice of repayment pursuant to subsection 2.4A(i).
B. MANNER AND TIME OF PAYMENT. All payments of principal, interest and
fees hereunder by Company shall be made without defense, set-off or counterclaim
and in same day funds and delivered to Agent not later than 12:00 noon (Dallas
time) on the date due at its office located at 000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxx 00000 for the account of Lenders; funds received by Agent after
that time shall be deemed to have been paid by Company on the next succeeding
Business Day.
C. APPORTIONMENT OF PAYMENTS. Aggregate principal and interest payments
shall be apportioned among all outstanding Revolving Credit Loans to which such
payments relate, and such payments shall be apportioned ratably to Lenders,
proportionately to Lenders' respective Pro Rata Shares. Agent shall promptly
distribute to each Lender at its primary address set forth below its name on the
appropriate signature page hereof or such other address as any Lender may
request its share of all such payments received by Agent and the commitment fees
of such Lender when received by Agent pursuant to subsection 2.3A.
Notwithstanding the foregoing provisions of this subsection 2.4C if, pursuant to
the provisions of subsection 2.6D, any Notice of Borrowing or Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of the
Revolving Credit Commitments of Eurodollar Rate Loans, Agent shall give effect
thereto in apportioning payments received thereafter.
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D. PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder
or of the commitment and other fees hereunder, as the case may be; PROVIDED,
HOWEVER, that if the day on which payment relating to a Eurodollar Rate Loan is
due is not a Business Day but is a day of the month after which no further
Business Day occurs in that month, then the due date thereof shall be the next
preceding Business Day.
E. REDUCTIONS OF REVOLVING CREDIT COMMITMENTS. Company shall have the
right, at any time and from time to time, to terminate in whole or permanently
reduce in part, without premium or penalty, the Revolving Credit Commitments in
an amount up to the amount by which the Revolving Credit Commitments exceed the
Total Utilization of Revolving Credit Commitments. Company shall give not less
than three Business Days' prior written notice to Agent designating the date
(which shall be a Business Day) of such termination or reduction and the amount
of any partial reduction. Promptly after receipt of a notice of such
termination or partial reduction, Agent shall notify each Lender of the proposed
termination or reduction. Such termination or partial reduction of the
Revolving Credit Commitments shall be effective on the date specified in
Company's notice and shall reduce the Revolving Credit Commitment of each Lender
proportionately to its Pro Rata Share of the Revolving Credit Commitments. Any
such partial reduction of the Revolving Credit Commitments shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of $500,000 in
excess of that amount unless the remaining amount of such Commitments is less
than $5,000,000 in which case such reduction shall be in the amount of the then
remaining Revolving Credit Commitments. The Revolving Credit Commitments shall
be permanently reduced by the amount of any mandatory prepayment of the
Revolving Credit Loans that shall be required to be made pursuant to
subsection 2.4A(ii).
2.5 Use of Proceeds
A. REVOLVING CREDIT LOANS. The proceeds of the Revolving Credit Loans
shall be applied by Company for its general corporate purposes, which may
include, without limitation, (i) working capital, (ii) the refinancing of the
term loan outstanding under the Original Credit Agreement and certain other
debt, (iii) capital expenditures and certain other expenditures permitted
hereby, (iv) Permitted Acquisitions, and (v) reimbursement to any Issuing Lender
of any amounts drawn under any Letter of Credit as provided in subsection 2.8C.
B. LETTERS OF CREDIT. The Letters of Credit shall be issued for general
corporate purposes, which may include, without limitation, supporting
(i) workers' compensation liabilities, (ii) obligations to third party insurers,
(iii) performance, payment, deposit or surety obligations under law or
governmental rule or regulation or in accordance with industry custom and
practice, or (iv) obligations incurred in connection with the purchase of goods
and services in the ordinary course of business.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company to purchase or carry any Margin Stock in
any manner that
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might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T, or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of the Board
or to violate the Exchange Act, in each case as in effect on the date or
dates of such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans; Increased Costs
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions, to the extent they relate to Eurodollar Rate Loans, shall
govern as to the matters covered:
A. DETERMINATION OF INTEREST RATE. As soon as practicable after 10:00
A.M. (Dallas time) on each Interest Rate Determination Date, Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof on
such date (in writing or by telephone confirmed in writing) to Company and each
Lender.
B. SUBSTITUTED RATE OF BORROWING. If on any Interest Rate Determination
Date, Agent shall have determined (which determination shall be final and
conclusive and binding upon all parties but shall be made only after
consultation with Company) that, by reason of any changes arising after the date
of this Agreement affecting the Eurodollar market or by reasons of any change
arising after the date of this Agreement affecting the position of a Lender in
such market (each such Lender an "AFFECTED LENDER"), the Eurodollar Rate shall
not represent the effective pricing to such Affected Lender for Dollar deposits
of comparable amount for the relevant period and the higher cost of such
deposits is deemed by such Lender and Agent (in their sole discretion) to be
material, then, and in any such event, Agent shall promptly (and in any event
not later than such Interest Rate Determination Date) give notice (by telephone
confirmed in writing) to Company (which notice Agent shall promptly transmit to
each other Lender) of such determination. Thereafter, Company shall pay to each
Affected Lender, upon written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Affected Lender in its sole discretion shall reasonably
determine) as shall be required to cause such Affected Lender to be paid
interest with respect to its Eurodollar Rate Loans for the Interest Period
following that Interest Rate Determination Date at a rate per annum equal to the
Applicable Margin then in effect plus the effective pricing to such Affected
Lender for Dollar deposits to make or maintain its Eurodollar Rate Loans;
PROVIDED that Company may replace such Affected Lender with one or more other
banks reasonably acceptable to Agent so long as (i) the aggregate amount of the
Revolving Credit Commitments of the Affected Lender to be replaced shall equal
the aggregate amount of Revolving Credit Commitments of such other bank or banks
and (ii) such Affected Lender is replaced in the Eurocurrency Credit Agreements
to which it is a party by the same bank or banks. Upon the execution of an
assignment agreement substantially in the form of EXHIBIT VII annexed hereto,
each such other bank shall be deemed to be a "Lender" for all purposes of this
Agreement as set forth in subsection 10.2. A certificate as to additional
amounts owed an
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Affected Lender, showing in reasonable detail the basis for the calculation
thereof, submitted in good faith to Company and Agent by such Affected Lender
shall, absent manifest error, be final and conclusive and binding upon all of
the parties hereto.
C. REQUIRED TERMINATION AND PREPAYMENT. If on any date any Lender shall
have reasonably determined (which determination shall be final and conclusive
and binding upon all parties) that the making or continuation of its Eurodollar
Rate Loans has become unlawful or impossible by compliance by that Lender in
good faith with any law, governmental rule, regulation or order (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful), then, and in any such event, that Lender shall be an Affected Lender
and it shall promptly give notice (by telephone confirmed in writing) to Company
and Agent (which notice Agent shall promptly transmit to each Lender) of that
determination. Subject to the prior withdrawal of a Notice of Borrowing or a
Notice of Conversion/Continuation or prepayment of the Eurodollar Rate Loans of
the Affected Lender as contemplated by the following subsection 2.6D, the
obligation of the Affected Lender to make or maintain its Eurodollar Rate Loans
during any such period shall be terminated at the earlier of the termination of
the Interest Period then in effect or when required by law and Company shall no
later than the termination of the Interest Period in effect at the time any such
determination pursuant to this subsection 2.6C is made or, earlier, when
required by law, repay or prepay the Eurodollar Rate Loans of the Affected
Lender, together with all interest accrued thereon.
D. OPTIONS OF COMPANY. In lieu of paying an Affected Lender such
additional moneys as are required by subsection 2.6B or the prepayment of an
Affected Lender required by subsection 2.6C, Company may exercise any one of the
following options:
(i) If the determination by an Affected Lender relates only to
Eurodollar Rate Loans then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company may by giving
notice (by telephone confirmed in writing) to Agent (who shall promptly
give similar notice to each Lender) no later than the date immediately
prior to the date on which such Eurodollar Rate Loans are to be made,
withdraw that Notice of Borrowing or Notice of Conversion/Continuation and
the Eurodollar Rate Loans then being requested shall be made by Lenders as
Base Rate Loans; or
(ii) Upon written notice to Agent and each Lender, Company may
terminate the obligations of Lenders to make or maintain Revolving Credit
Loans as, and to convert Revolving Credit Loans into, Eurodollar Rate Loans
and in such event, Company shall, prior to the time any payment pursuant to
subsection 2.6C is required to be made or, if the provisions of
subsection 2.6B are applicable, at the end of the then current Interest
Period, convert all of the Eurodollar Rate Loans into Base Rate Loans in
the manner contemplated by subsection 2.2D but without satisfying the
advance notice requirements therein; or
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(iii) Company may give notice (by telephone confirmed in writing)
to the Affected Lender and Agent (who shall promptly give similar notice to
each Lender) and require the Affected Lender to make the Eurodollar Rate
Loan then being requested as a Base Rate Loan or to continue to maintain
its outstanding Base Rate Loan then the subject of a Notice of
Conversion/Continuation as a Base Rate Loan or to convert its Eurodollar
Rate Loans then outstanding that are so affected into Base Rate Loans at
the end of the then current Interest Period (or at such earlier time as
prepayment is otherwise required to be made pursuant to subsection 2.6C) in
the manner contemplated by subsection 2.2D but without satisfying the
advance notice requirements therein, that notice to pertain only to the
Revolving Credit Loans of the Affected Lender and to have no effect on the
obligations of the other Lenders to make or maintain Eurodollar Rate Loans
or to convert Base Rate Loans into Eurodollar Rate Loans.
E. COMPENSATION. Company shall compensate each Lender, upon written
request by that Lender (which request shall set forth in reasonable detail the
basis for requesting such amounts), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss (including interest paid)
sustained by that Lender in connection with the re-employment of such funds),
that Lender may sustain (other than through a default by that Lender): (i) if
for any reason a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing, a Notice of Conversion/Continuation
or a telephonic request for borrowing or conversion/continuation or a successive
Interest Period does not commence after notice therefor is given pursuant to
subsection 2.2D, (ii) if for any reason any prepayment of any of its Eurodollar
Rate Loans occurs on a date that is not the last day of an Interest Period
applicable to that Eurodollar Rate Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company to repay its Eurodollar Rate Loans when required by the terms of this
Agreement.
F. QUOTATION OF EURODOLLAR RATE. Anything herein to the contrary
notwithstanding, if on any Interest Rate Determination Date NationsBank is as a
matter of general practice not quoting rates to first class banks in the
Eurodollar market for the offering of Dollars for deposit with maturities
comparable to the Interest Period and in amounts comparable to the Eurodollar
Rate Loans requested, Agent shall give Company and each Lender prompt notice
thereof and the Revolving Credit Loans requested shall be made as Base Rate
Loans. Until such notice has been withdrawn by Agent, no further Eurodollar
Rate Loan shall be made nor shall Company have the right to convert a Base Rate
Loan to a Eurodollar Rate Loan. Such notice shall be withdrawn by Agent when
Agent resumes the quotation of such rates.
G. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of, any of its branch
offices or the office of an Affiliate of that Lender, subject to
subsection 2.6K.
H. INCREASED COSTS. If, after the date hereof by reason of, (x) the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of tax
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or reserve requirements) in or in the official interpretation of any law or
regulation by the authority charged with the administration or interpretation
thereof, or (y) the compliance with any guideline or request from any central
bank or other governmental authority or quasi- governmental authority
exercising control over banks or financial institutions generally (whether or
not having the force of law):
(i) any Lender (or its applicable lending office) shall be subject to
any increase in the net amount of any tax, duty or other charge with
respect to its Eurodollar Rate Loans or its obligation to make Eurodollar
Rate Loans, or shall be subject to any change in the basis of taxation of
payments to any Lender of the principal of or interest on its Eurodollar
Rate Loans or its obligation to make Eurodollar Rate Loans (except for any
increase or other change in or with respect to Excluded Taxes); or
(ii) any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender's applicable lending office shall be
imposed or deemed applicable or any other condition affecting its
Eurodollar Rate Loans or its obligation to make Eurodollar Rate Loans shall
be imposed on any Lender or its applicable lending office or the interbank
Eurodollar market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Rate Loans, or
there shall be a reduction in the amount received or receivable with respect to
Eurodollar Rate Loans by that Lender or its applicable lending office under this
Agreement, then Company shall from time to time, upon written notice from and
demand by that Lender (with a copy of such notice and demand to Agent), pay to
Agent for the account of that Lender, within five Business Days after receipt of
such notice and demand, additional amounts sufficient to indemnify that Lender
against such increased cost or reduced amount. A certificate in reasonable
detail as to the amount of such increased cost or reduced amount, submitted to
Company and Agent by that Lender, shall, except for manifest error, be final,
conclusive and binding for all purposes. Any payments to be made by Company
under subsections 2.6B, 2.6H, 2.7 or 2.9 are to be without duplication.
Company shall not be required to pay any amounts pursuant to this
subsection 2.6H to or on behalf of any Foreign Lender unless such Foreign Lender
has provided to Company, either a Certificate of Exemption or a Letter of Non-
Exemption.
I. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under subsections 2.6B, 2.6E and 2.6H shall
be made as though that Lender had actually funded its relevant Eurodollar Rate
Loan through the purchase of a Eurodollar deposit bearing interest at the
Eurodollar Rate in an amount equal to the amount of that Eurodollar Rate Loan
and having a maturity comparable to the relevant Interest Period and through the
transfer of such Eurodollar deposit from an offshore office of that Lender to a
domestic office of that Lender in the United States of America; PROVIDED,
HOWEVER, that each
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Lender may fund each of its Eurodollar Rate Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this subsection 2.6.
J. EURODOLLAR RATE LOANS AFTER DEFAULT. Unless Agent and Requisite
Lenders shall otherwise agree, after the occurrence of and during the
continuance of a Potential Event of Default or Event of Default, Company may not
elect to have a Revolving Credit Loan be made or maintained as, or converted to,
a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Eurodollar Rate Loan.
K. AFFECTED LENDERS' OBLIGATION TO MITIGATE. Each Lender agrees that, as
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition that would cause it to be an Affected Lender under
subsection 2.6B or 2.6C or that would entitle such Lender to receive payments
under subsection 2.6H, 2.7 or 2.9, it will, to the extent not inconsistent with
such Lender's internal policies, use reasonable efforts to make, fund or
maintain the affected Revolving Credit Loans of such Lender through another
lending office of such Lender if as a result thereof the additional moneys which
would otherwise be required to be paid to such Lender pursuant to
subsection 2.6B, 2.6H, 2.7 or 2.9 would be materially reduced or the illegality
or other adverse circumstances which would otherwise require prepayment of such
Revolving Credit Loans pursuant to subsection 2.6C would cease to exist, and if,
as determined by such Lender in its sole discretion, the making, funding or
maintaining of such Revolving Credit Loans through such other lending office
would not otherwise materially adversely affect such Revolving Credit Loans or
such Lender. Company hereby agrees to pay all reasonable expenses incurred by
any Lender in utilizing another lending office of such Lender pursuant to this
subsection 2.6K, to the extent such expenses exceed the expenses that such
Lender would otherwise incur in utilizing the original lending office of such
Lender.
2.7 Capital Adequacy Adjustment
In the event that any Lender shall have reasonably determined that the
adoption or implementation after the date hereof of any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, including, without limitation, any change in the
regulations set forth at 12 C.F.R. Part 208 (Appendix A) and 12 C.F.R. Part 225
(Appendix A), or any change therein or in the interpretation or application
thereof, or compliance by any Lender with any request or directive regarding
capital adequacy (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) from any central bank or
governmental agency or body having jurisdiction, does or shall have the effect
of increasing the amount of capital required to be maintained by such Lender and
thereby reducing the rate of return on such Lender's capital as a consequence of
its obligations hereunder to a level below that which such Lender would have
achieved but for the occurrence of such circumstances, then Company shall from
time to time, within ten (10) Business Days of written notice and demand from
such Lender (with a copy to the Agent) claiming compensation pursuant to this
subsection 2.7, including a certificate (x) stating that one of the events
described in this subsection 2.7 has occurred and describing in reasonable
detail the nature of such event,
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(y) stating the amount of the reduction in the rate of return on such
Lender's capital reasonably determined by such Lender to be allocable to the
existence of such Lender's commitment to lend hereunder and (z) setting forth
in reasonable detail the manner of calculation of the reduction in the rate
of return on such Lender's capital and such allocated amount thereof, pay to
Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such allocated reduction. Such certificate as to
the amount of such compensation, submitted to Company and Agent by such
Lender, shall, absent manifest error, be final, conclusive and binding for
all purposes. In determining such amount, a Lender may use any averaging and
attribution method; PROVIDED, HOWEVER, that such method shall be reasonable.
Notwithstanding the foregoing, nothing in this subsection 2.7 is intended to
provide and this subsection 2.7 shall not provide to Holding, Company or any
Material Domestic Subsidiary entering into a Domestic Loan Document the right
to inspect the records, files or books of any Lender. For the avoidance of
doubt, no amount shall be required to be paid to any Lender or Agent under
this subsection 2.7 in respect of any increased cost or reduced return
arising from the implementation of, or compliance by any Lender with, any
rule, regulation, guideline, order or other request or directive regarding
capital adequacy which is in existence at the date hereof.
2.8 Letters of Credit
A. LETTERS OF CREDIT. In addition to Company requesting that Lenders
make Revolving Credit Loans pursuant to subsection 2.1, Company may request, in
accordance with the provisions of this subsection 2.8A, on and after the date on
which all of the conditions set forth in subsection 3.1 are satisfied to and
excluding the Revolving Credit Commitment Termination Date, that NationsBank
(or, if NationsBank is unwilling to provide such Letters of Credit, one or more
Lenders; PROVIDED that, if no other Lender is willing to provide any Letter of
Credit, NationsBank shall, if each of the conditions to issuance of such Letter
of Credit in this Agreement is met, issue such Letter of Credit) issue Letters
of Credit for the account of Company, on behalf of Company or any Material
Domestic Subsidiary; PROVIDED that (i) Company shall not request that any Lender
issue (and no Lender shall issue) any Letter of Credit if, after giving effect
to such issuance, the Total Utilization of Revolving Credit Commitments would
exceed the aggregate of all Revolving Credit Commitments, and (ii) Company shall
not request that any Lender issue any Letter of Credit if, after giving effect
to such issuance, the aggregate Letter of Credit Usage would exceed $20,000,000.
In no event shall any Lender issue any Letter of Credit having an expiration
date later than the earlier of (y) the Revolving Credit Commitment Termination
Date, as in effect on the date of issuance of such Letter of Credit, or (z) the
date which is eighteen months from the date of issuance of such Letter of
Credit; PROVIDED, that this clause (z) shall not prevent any Issuing Lender from
agreeing that a Letter of Credit will automatically be extended annually for a
period not to exceed one year unless such Issuing Lender elects not to extend
for such additional period. The issuance or extension of any Letter of Credit
in accordance with the provisions of this subsection 2.8 shall require the
satisfaction of each condition set forth in subsection 3.3; PROVIDED, HOWEVER,
the obligation of each Issuing Lender to issue or extend any Letter of Credit is
subject to the condition that (i) such Issuing Lender believed in good faith
that all conditions under subsections 2.8A and 3.3 to the issuance or extension
of such Letter of Credit were
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satisfied at the time such Letter of Credit was issued or extended or (ii)
the satisfaction of any such condition not satisfied had been waived by
Requisite Lenders prior to or at the time such Letter of Credit was issued or
extended; PROVIDED FURTHER that Issuing Lender shall be entitled to rely, and
shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, including, without limitation, an
Officer's Certificate from Company as to the satisfaction of the conditions
under subsection 3.3, in determining the satisfaction of any conditions to
the issuance or extension of any Letter of Credit or the Total Utilization of
Revolving Credit Commitments or aggregate Letter of Credit Usage then in
effect.
Immediately upon the issuance of each Letter of Credit (or with respect to
the Existing Letters of Credit, upon the Closing Date and satisfaction of the
conditions set forth in subsections 3.1 and 3.3), each Lender shall be deemed
to, and hereby agrees to, have irrevocably purchased from the Issuing Lender a
participation in such Letter of Credit and drawings thereunder in an amount
equal to such Lender's Pro Rata Share of the Revolving Credit Commitments of the
maximum amount which is or at any time may become available to be drawn
thereunder.
Each Letter of Credit supporting the payment of Indebtedness may provide
that, upon the occurrence of an Event of Default and the acceleration of the
maturity of the Revolving Credit Loans, the Issuing Lender shall pay the
beneficiary thereof if (and only if) payment is then due by the terms of such
Letter of Credit to such beneficiary, or if such payment is not then due to such
beneficiary, may provide (as and to the extent contemplated by the "THEN" clause
of Section 8) for the deposit of funds in an account of Issuing Lender to secure
payment to such beneficiary and that any funds so deposited shall be paid to
such beneficiary if all conditions to such payment under such Letter of Credit
are satisfied or returned to the Issuing Lender for distribution to Lenders (or,
if all Obligations shall have been indefeasibly paid in full, to Company) if no
payment to such beneficiary has been made and the final date available for
drawings under such Letter of Credit has passed. Each payment or deposit of
funds by the Issuing Lender as provided in this paragraph shall be treated for
all purposes of this Agreement as a drawing duly honored by the Issuing Lender
under the related Letter of Credit.
B. NOTICE OF ISSUANCE. Whenever Company desires to cause a Lender to
issue a Letter of Credit, it shall deliver to that Lender and Agent a Notice of
Issuance of Letter of Credit in the form annexed hereto as EXHIBIT IB no later
than 12:00 noon (Dallas time) at least four Business Days in advance of the
proposed date of issuance or such shorter time as may be acceptable to the
Issuing Lender. The Notice of Issuance of Letter of Credit shall specify
(i) the proposed Issuing Lender (which shall be NationsBank unless NationsBank
declines to issue such Letter of Credit), (ii) the proposed date of issuance
(which shall be a Business Day), (iii) the face amount of the Letter of Credit,
(iv) the expiration date of the Letter of Credit, (v) the name and address of
the beneficiary, and (vi) such other documents or materials as such Issuing
Lender may reasonably request; PROVIDED that the Issuing Lender, in its sole
judgment, may require changes in any such documents and materials; PROVIDED
further that the Issuing Lender shall not be required to issue any Letter of
Credit that on its terms requires payment thereunder
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prior to the third Business Day following receipt by the Issuing Lender of
such documents and materials. In determining whether to pay any Letter of
Credit, the Issuing Lender shall be responsible only to use reasonable care
to determine that the documents and materials required to be delivered under
that Letter of Credit have been delivered and that they comply on their face
with the requirements of that Letter of Credit. Promptly upon the issuance
of a Letter of Credit, the Issuing Lender shall notify each Lender of the
issuance and the amount of each such other Lender's respective participation
therein determined in accordance with subsection 2.8D.
C. PAYMENT OF AMOUNTS DRAWN UNDER LETTERS OF CREDIT. In the event of any
request for drawing under any Letter of Credit by the beneficiary thereof, the
Issuing Lender shall immediately notify Company and Agent, and Company shall
reimburse the Issuing Lender on the day on which such drawing is honored in an
amount in same day funds equal to the amount of such drawing, plus accrued
interest, if any, on such amount at the rate set forth in subsection 2.8E(4).
D. PAYMENT BY LENDERS. If Company shall fail to reimburse the Issuing
Lender, for any reason, as provided in subsection 2.8C in an amount equal to the
amount of any drawing honored by the Issuing Lender under a Letter of Credit
issued by it, the Issuing Lender shall promptly notify each Lender of the
unreimbursed amount of such drawing and of such Lender's respective
participation therein based on such Lender's Pro Rata Share of the Revolving
Credit Commitments. Each Lender shall make available to the Issuing Lender an
amount equal to its respective participation, in same day funds, at the office
of the Issuing Lender specified in such notice, not later than 12:00 noon
(Dallas time) on the Business Day after the date notified by the Issuing Lender.
If any Lender fails to make available to the Issuing Lender the amount of such
Lender's participation in such Letter of Credit as provided in this
subsection 2.8D, the Issuing Lender shall be entitled to recover such amount on
demand from such Lender together with interest at the customary rate set by the
Issuing Lender for the correction of errors among banks for one Business Day and
thereafter at the Base Rate. Nothing in this subsection 2.8 shall be deemed to
prejudice the right of any Lender to recover from the Issuing Lender any amounts
made available by such Lender to the Issuing Lender pursuant to this
subsection 2.8D, or any rights of Company, if it is determined in a final
judgment by a court of competent jurisdiction that the payment with respect to a
Letter of Credit by the Issuing Lender in respect of which payment was made by
such Lender constituted gross negligence or willful misconduct on the part of
the Issuing Lender. The Issuing Lender shall distribute to each other Lender
which has paid all amounts payable by it under this subsection 2.8D with respect
to any Letter of Credit issued by the Issuing Lender such other Lender's Pro
Rata Share of the Revolving Credit Commitments of all payments received by the
Issuing Lender from Company or pursuant to the last paragraph of subsection 2.8A
in reimbursement of drawings honored by the Issuing Lender under such Letter of
Credit when such payments are received.
E. COMPENSATION. Company agrees to pay the following amounts to the
Issuing Lender with respect to each Letter of Credit issued by it:
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(1) an administrative fee equal to .125% per annum of the maximum
amount available from time to time to be drawn under such Letter of Credit
payable in arrears on and to (but not including) the last Business Day of
each fiscal quarter of each year, commencing on the first such date to
occur after the Closing Date;
(2) a commission on each Documentary Letter of Credit with an initial
expiration date of less than one year equal to 0.625% per annum of the
weighted average maximum amount available from time to time to be drawn
under such Letter of Credit, payable in arrears on and to (but not
including) the last Business Day of each fiscal quarter of each year,
commencing on the first such date to occur after the Closing Date.
(3) a commission on each (A) Standby Letter of Credit and
(B) Documentary Letter of Credit with an initial expiration date of one
year or more at a per annum rate equal to the product of (y) the weighted
average Applicable Margin applicable to Eurodollar Rate Loans during the
period of calculation times (z) the weighted average maximum amount
available from time to time to be drawn during such period under such
Letter of Credit, payable in arrears on and to (but not including) the last
Business Day of each fiscal quarter of each fiscal year, commencing on the
first such date to occur after the Closing Date;
(4) with respect to drawings made under any Letter of Credit,
interest, payable on demand, on the amount paid by the Issuing Lender in
respect of each such drawing from the date of the drawing through the date
such amount is reimbursed by Company at a rate which is equal to the Base
Rate; PROVIDED that if such amount is not paid within three Business Days,
such amount shall bear interest thereafter at a rate which is equal to
2.00% per annum in excess of the Base Rate which such rate shall not
thereafter be increased pursuant to subsection 2.2E; and
(5) with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder, reasonable documentary
and processing charges in accordance with the Issuing Lender's standard
schedule for such charges in effect at the time of such issuance,
amendment, transfer or drawing, as the case may be, or as otherwise agreed
to by the Issuing Lender.
Promptly upon receipt by Issuing Lender of any amount described in
clauses (2), (3) or (4) of this subsection 2.8E with respect to a Letter of
Credit, the Issuing Lender shall distribute to each Lender its Pro Rata Share of
the Revolving Credit Commitments of such amount.
F. OBLIGATIONS ABSOLUTE. The obligation of Company to reimburse the
Issuing Lender for drawings made under the Letters of Credit issued by it and
the obligations by Lenders under subsection 2.8D shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
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(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right which
Company may have at any time against a beneficiary or any transferee of any
Letter of Credit (or any persons or entities for whom any such transferee
may be acting), Agent, any Lender or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between Company
and the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; PROVIDED that the Issuing Lender shall
use reasonable care to determine that the documents and certificates
required to be delivered under any Letter of Credit have been delivered and
that they comply on their face with the requirements of that Letter of
Credit;
(iv) payment by the Issuing Lender under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does
not comply with the terms of such Letter of Credit; PROVIDED that the
Issuing Lender shall use reasonable care to determine that the documents
and certificates required to be delivered under any Letter of Credit have
been delivered and that they comply on their face with the requirements of
that Letter of Credit;
(v) any adverse change in the condition (financial or otherwise) of
Holding or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
Holding or any of its Subsidiaries, Agent, or any Lender (other than the
Issuing Lender);
(vii) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
PROVIDED that Company shall not be required to pay any such amounts to the
extent they arise from the gross negligence or willful misconduct of the Issuing
Lender (as determined by a court of competent jurisdiction).
G. ADDITIONAL PAYMENTS. If, after the date hereof, by reason of (a) the
introduction of or change in the official interpretation of any applicable law
or regulation by the authority charged with the administration or interpretation
thereof or (b) compliance by the Issuing Lender or any Lender with any guideline
or request of any central bank or other governmental authority
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or quasi-governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
(i) the Issuing Lender or any Lender shall be subject to any increase
in the net amount of any tax, duty or other charge with respect to the
maintenance or fulfillment of its obligations under this subsection 2.8
(except for any increase or other change in or with respect to Excluded
Taxes);
(ii) any reserve, special deposit, premium, FDIC assessment, capital
adequacy or similar requirement is or shall be applicable, imposed or
modified in respect of any Letters of Credit issued by the Issuing Lender
or participations therein purchased by any Lender; or
(iii) there shall be imposed on the Issuing Lender or any Lender
any other condition regarding this subsection 2.8, any Letter of Credit or
any participation therein;
and the result of the foregoing is to directly or indirectly increase the cost
to the Issuing Lender or any Lender of , making or maintaining any Letter of
Credit or of purchasing or maintaining any participation therein, or to reduce
the amount receivable in respect thereof by the Issuing Lender or any Lender,
then and in any such case the Issuing Lender or such Lender may, at any time
within a reasonable period after the additional cost is incurred or the amount
received is reduced, notify Company and Agent, and Company shall pay within five
Business Days of the date of such notice such amounts as the Issuing Lender or
such Lender may specify to be necessary to compensate the Issuing Lender or such
Lender for such additional cost or reduced receipt, together with interest on
such amount from the date demanded until payment in full thereof at a rate equal
at all times to the Base Rate PLUS 0.50% per annum. The determination by the
Issuing Lender or any Lender, as the case may be, of any amount due pursuant to
this subsection 2.8G as set forth in a certificate setting forth the calculation
thereof in reasonable detail, shall, in the absence of manifest error, be final
and conclusive and binding on all of the parties hereto.
Company shall not be required to pay any amounts pursuant to this
subsection 2.8G to or on behalf of any Foreign Lender unless such Foreign Lender
has provided to Company either a Certificate of Exemption or a Letter of Non-
Exemption.
H. INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES. In addition to
amounts payable as elsewhere provided in this subsection 2.8, Company hereby
agrees to protect, indemnify, pay and save harmless the Issuing Lender from and
against any and all claims, demands, damages and losses of, and liabilities to,
third parties to which the Issuing Lender may be subject, and all reasonable
out-of-pocket costs, charges and expenses (including reasonable attorneys' fees)
relating thereto which the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of fraud, gross negligence or willful misconduct of the
Issuing Lender or the Issuing Lender failing to use reasonable care to determine
that the documents and certificates required to be
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delivered under such Letter of Credit had been delivered and that they
complied on their face with the requirements of that Letter of Credit (as
determined by a court of competent jurisdiction) or (ii) the failure of the
Issuing Lender to honor a drawing under any Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or governmental authority (all such acts or
omissions herein called "GOVERNMENT ACTS"). Each Lender, proportionately to
its Pro Rata Share of the Revolving Credit Commitments, severally agrees to
indemnify Issuing Lender to the extent Issuing Lender shall not have been
reimbursed by Holding or its Subsidiaries, for and against any of the
foregoing claims, demands, liabilities, damages, losses, costs, charges and
expenses to which Issuing Lender is entitled to reimbursement from Holding or
its Subsidiaries.
As between Company and the Issuing Lender, Company assumes all risks of the
acts and omissions of, or misuse of the Letters of Credit issued by the Issuing
Lender by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Lender shall not
be responsible (absent fraud, gross negligence or willful misconduct (as
determined by a court of competent jurisdiction) and PROVIDED that the Issuing
Lender shall use reasonable care to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of that
Letter of Credit): (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of such Letters of Credit, even if it
should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) for failure of the beneficiary of any such Letter of Credit to
comply fully with conditions required in order to draw upon such Letter of
Credit; (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the
Issuing Lender, including, without limitation, any Government Acts.
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender under or in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith and absent fraud, gross
negligence or willful misconduct of the Issuing Lender (as determined by a court
of competent jurisdiction), shall not put the Issuing Lender under any resulting
liability to Company; PROVIDED that, notwithstanding the foregoing, the Issuing
Lender shall use reasonable care to determine that the documents and
certificates required to be delivered under any such Letter of Credit have been
delivered and that they comply on their face with the requirements of that
Letter of Credit.
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Notwithstanding anything to the contrary contained in this subsection 2.8H,
Company shall have no obligation to indemnify the Issuing Lender in respect of
any claims, demands, liabilities, damages, losses, costs, charges or expenses to
which the Issuing Lender may incur or be subject, to the extent they arise out
of the fraud, gross negligence or willful misconduct of the Issuing Lender as
determined by a court of competent jurisdiction, or out of the wrongful dishonor
by the Issuing Lender of a proper demand for payment made under the Letters of
Credit, or out of the failure of the Issuing Lender to use reasonable care to
determine that the documents and certificates required to be delivered under any
Letter of Credit have been delivered and that they comply on their face with the
requirements of that Letter of Credit.
For purposes of this subsection 2.8H, the term "Issuing Lender" means the
Issuing Lender and any Lender purchasing a participation in any Letter of Credit
pursuant to subsection 2.8D.
I. COMPUTATION OF INTEREST AND FEES. Subject to subsection 10.18,
interest and fees payable pursuant to this subsection 2.8 shall be computed on
the basis of a 360-day year and the actual number of days elapsed in the period
during which it accrues.
2.9 Tax Certificates.
Each Lender that becomes a Lender pursuant to the proviso in the definition
of Lender shall deliver to each of Company and Agent either (1) a letter or
other written certification stating that it is organized under the laws of the
United States of America or a state thereof (referred to in this subsection 2.9
as a "LETTER OF DOMESTIC ORGANIZATION") or (2) if it is not a "United States
person" within the meaning of Section 7701(a)(30) of the Internal Revenue Code
of 1986, as amended (referred to in this subsection 2.9 and subsection 2.6H as a
"FOREIGN LENDER") (x) two properly completed and executed copies of United
States Internal Revenue Service Form 4224 or Form 1001 or other successor
applicable form, certificate or document prescribed by the Internal Revenue
Service of the United States certifying as to such Foreign Lender's entitlement
to an exemption from or reduced rate of United States withholding under an
applicable statute or tax treaty with respect to payments to be made to such
Foreign Lender hereunder (referred to in this subsection 2.9 as a "CERTIFICATE
OF EXEMPTION") or (y) a letter from such Foreign Lender stating that it is not
entitled to any such exemption or reduced rate (referred to in this
subsection 2.9 as a "LETTER OF NON-EXEMPTION") on the date such Lender becomes a
Lender and each Lender shall provide additional Letters of Domestic
Organization, Certificates of Exemption or Letters of Non-Exemption from time to
time thereafter if requested by Company or Agent or required because, as a
result of a change in law, or a change in circumstances, the expiration of a
previously delivered letter or certificate, or otherwise, a previously delivered
letter or certificate becomes incomplete, incorrect or ineffective in any
material respect; PROVIDED, HOWEVER, that each initial Lender executing this
Agreement certifies that it (1) is organized under the laws of the United States
of America or a state thereof and such certification constitutes such Lender's
Letter of Domestic Organization for purposes of this subsection 2.9 or (2) has
delivered a Certificate of Exemption in connection with the Original Credit
Agreement. Unless Company and Agent have received from each Lender that becomes
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a Lender pursuant to the proviso in the definition of Lender a Certificate of
Exemption or Letter of Domestic Organization when and as required pursuant to
the preceding sentence, the accuracy of which shall be reasonably
satisfactory to Company and Agent, Company and Agent shall be entitled to
withhold taxes from all payments to such Lender at the statutory rate
applicable to amounts to be paid hereunder to such Lender. If Company and
Agent have received from any Foreign Lender a Certificate of Exemption
pursuant to the Original Credit Agreement or when and as required by this
subsection 2.9, the accuracy of which shall be reasonably satisfactory to
Company and Agent, certifying as to such Foreign Lender's entitlement to a
reduced rate of withholding tax, Company and Agent shall withhold taxes from
all payments to such Foreign Lender at the rate specified in such
certificate. For the avoidance of doubt, any reference to any Lender in this
subsection 2.9 shall be deemed to refer to and include any Issuing Lender.
SECTION 3. CONDITIONS TO REVOLVING CREDIT LOANS AND LETTERS OF CREDIT
3.1 Conditions to Initial Revolving Credit Loans and Letters of Credit
The obligations of Lenders to make the initial Revolving Credit Loans, and
of any Issuing Lender to issue Letters of Credit on the Closing Date are, in
addition to the conditions precedent specified in subsections 3.2 and 3.3, as
applicable, subject to prior or concurrent satisfaction of the following
conditions:
A. HOLDING DOCUMENTS. On or before the Closing Date, Holding shall
deliver to Lenders (or to Agent for Lenders with sufficient originally executed
copies for each Lender):
1. Certified copies of any amendment to its Certificate of
Incorporation since February 24, 1995, together with good standing
certificates from the Secretary of State of the States of Delaware and each
of its principal places of business, each to be dated a recent date prior
to the Closing Date;
2. Copies of any amendments to its Bylaws since February 24, 1995,
certified as of the Closing Date by its corporate secretary or an assistant
Secretary;
3. Resolutions of its Board of Directors approving and authorizing
the execution, delivery and performance of this Agreement and the other
Domestic Loan Documents to be executed in connection with this Agreement to
which it is a party, and approving and authorizing any documents,
instruments or certificates to be executed by it in connection with this
Agreement and the other Domestic Loan Documents to be executed in
connection with this Agreement to which it is a party, all in form and
substance reasonably satisfactory to Agent and its counsel, each certified
as of the Closing Date by its corporate secretary or an assistant secretary
as being in full force and effect;
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4. Signature and incumbency certificates, dated the Closing Date, of
its officers executing this Agreement, the Domestic Loan Documents to be
executed in connection with this Agreement to which it is a party and any
documents, instruments or certificates to be executed by it in connection
therewith;
5. Copies of this Agreement and the other Domestic Loan Documents to
be executed in connection with this Agreement to which it is a party,
executed by it;
6. A certificate in form and substance reasonably satisfactory to
Agent stating that as of the Closing Date, Holding, Company and the
Material Subsidiaries are Solvent;
7. Copies of any other instruments, documents and certificates
required to be executed by it in connection with the execution of this
Agreement and the other Domestic Loan Documents to be executed in
connection with this Agreement, so executed; and
8. Such other documents as Agent may reasonably request.
B. COMPANY DOCUMENTS. On or before the Closing Date, Company shall
deliver to Lenders (or to Agent for Lenders with sufficiently originally
executed copies for each Lender):
1. Certified copies of any amendments to its Certificate of
Incorporation since February 24, 1995, together with good standing
certificates from the Secretary of State of the States of Delaware and each
of its principal places of business, each to be dated as of a recent date
prior to the Closing Date;
2. Copies of any amendments to its Bylaws since February 24, 1995,
certified as of the Closing Date by its corporate Secretary or an assistant
Secretary;
3. Resolutions of its Board of Directors approving and authorizing
the execution, delivery and performance of this Agreement and the other
Domestic Loan Documents to be executed in connection with this Agreement to
which it is a party and approving and authorizing any documents,
instruments or certificates required to be executed by it in connection
with this Agreement and the other Domestic Loan Documents to be executed in
connection with this Agreement to which it is a party, all in form and
substance reasonably satisfactory to Agent and its counsel, all certified
as of the Closing Date by its corporate secretary or an assistant secretary
as being in full force and effect;
4. Signature and incumbency certificates, dated the Closing Date, of
its officers executing this Agreement and the other Domestic Loan Documents
to be executed in connection with this Agreement to which it is a party and
any documents, instruments or certificates to be delivered in connection
therewith;
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5. Copies of this Agreement and the other Domestic Loan Documents to
be executed in connection with this Agreement to which it is a party,
executed by it;
6. Copies of any other instruments, documents and certificates
required to be executed by it in connection with the execution of this
Agreement and the other Domestic Loan Documents to be executed in
connection with this Agreement, so executed; and
7. Such other documents as Agent may reasonably request.
C. MATERIAL DOMESTIC SUBSIDIARY DOCUMENTS. On or before the Closing
Date, each Material Domestic Subsidiary shall deliver to Lenders (or to Agent
for Lenders with sufficiently originally executed copies for each Lender):
1. Certified copies of any amendments to its Certificate of
Incorporation or Articles of Incorporation, as applicable, since
February 24, 1995, together with good standing certificates from the
Secretary of State of the States of its incorporation and each of its
principal places of business, each to be dated as of a recent date prior to
the Closing Date;
2. Copies of any amendments to its Bylaws since February 24, 1995,
certified as of the Closing Date by its corporate secretary or an assistant
secretary;
3. Resolutions of its Board of Directors approving and authorizing
the execution, delivery and performance of the Domestic Loan Documents to
be executed in connection with this Agreement to which it is a party and
approving and authorizing any documents, instruments or certificates
required to be executed by it in connection with this Agreement and the
other Domestic Loan Documents to be executed in connection with this
Agreement to which it is a party, all in form and substance satisfactory to
Agent and its counsel, all certified as of the Closing Date by its
corporate secretary or an assistant secretary as being in full force and
effect;
4. Signature and incumbency certificates, dated the Closing Date, of
its officers executing the Domestic Loan Documents to be executed in
connection with this Agreement to which it is a party and any documents,
instruments or certificates to be delivered in connection therewith;
5. Copies of the Domestic Loan Documents to be executed in
connection with this Agreement to which it is a party, executed by it;
6. Copies of any other instruments, documents and certificates
required to be executed by it in connection with the execution of the
Domestic Loan Documents to be executed in connection with this Agreement,
so executed; and
7. Such other documents as Agent may reasonably request.
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D. EUROCURRENCY CREDIT AGREEMENTS. On or before the Closing Date, all
amendments and/or supplements to the Eurocurrency Credit Agreements and to the
Eurocurrency Loan Documents, if any, shall have been executed.
E. PERFECTION OF SECURITY INTERESTS AND STOCK CERTIFICATES. Collateral
Agent shall have a valid and perfected first priority security interest in the
entire Collateral to the extent granted by the Collateral Documents (other than
deposit accounts), subject to the Liens permitted under subsection 6.2.
F. NECESSARY CONSENTS. On or before the Closing Date, each of Holding,
Company and each Material Domestic Subsidiary executing a Domestic Loan Document
shall have obtained all consents to the transactions contemplated under this
Agreement and the other Domestic Loan Documents of any Person required under any
Contractual Obligation of Holding, Company or such Material Domestic Subsidiary,
as the case may be, all of the foregoing in form and substance reasonably
satisfactory to Agent, except for any such consents the failure of which to be
obtained, individually and in the aggregate, would not reasonably be expected to
have a material adverse effect on the business or financial condition of Holding
and its Subsidiaries, taken as a whole, or on the ability of Holding, Company or
any such Material Domestic Subsidiary to perform its obligations under this
Agreement and the other Domestic Loan Documents.
G. REPRESENTATIONS OF HOLDING AND COMPANY. Each of Holding and Company
shall have delivered to Agent an Officers' Certificate in form and substance
reasonably satisfactory to Agent to the effect that (i) the representations and
warranties in Section 4 hereof pertaining to such Person are true and correct in
all material respects on and as of the Closing Date to the same extent as though
made on and as of that date, (ii) since March 31, 1996 through the Closing Date,
there has been no change in the business, operations, properties, assets,
business prospects or condition (financial or otherwise) of Holding and its
Subsidiaries, which has been or could reasonably be expected to be materially
adverse to Holding and its Subsidiaries, taken as a whole, (iii) no Event of
Default or Potential Event of Default shall have occurred and be continuing or
will result from the transactions contemplated to occur hereunder on the Closing
Date and (iv) Holding and Company shall have performed in all material respects
all agreements which this Agreement provides shall be performed on or before the
Closing Date.
H. SATISFACTION OF CONDITIONS TO FUNDING. All conditions precedent to
Revolving Credit Loans described in subsection 3.2B shall be satisfied on and as
of the Closing Date with respect to the Revolving Credit Loans to be made on
such date.
I. PERFORMANCE OF AGREEMENTS. Each of Holding, Company and each Material
Domestic Subsidiary entering into a Domestic Loan Document to be executed in
connection with this Agreement shall have performed in all material respects all
agreements which this Agreement provides shall be performed on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by Agent.
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J. PAYMENT OF FEES. On or before the Closing Date, Company shall have
paid or cause to have been paid to Agent for distribution (as appropriate) to
Lenders and Agent, the fees payable on the Closing Date referred to in
subsection 2.3 and the other fees agreed to by paid by Company pursuant to the
Fee Letter.
K. OPINIONS FROM COUNSEL. Lenders and their respective counsel shall
have received originally executed copies of one or more favorable written
opinions of counsel for Holding, Company and the Material Domestic Subsidiaries,
in form and substance reasonably satisfactory to Agent and its counsel, dated as
of the Closing Date, and setting forth substantially the matters in the opinions
designated in EXHIBIT III annexed hereto and as to such other matters as Agent
may reasonably request.
L. OPINIONS FROM COUNSEL TO AGENT. Lenders shall have received an
originally executed copy of one or more favorable written opinions of Xxxxxxx,
Xxxxxxx & Xxxxxxx, P.C., counsel to Agent, dated as of the Closing Date,
addressed to Agent and substantially in the form of EXHIBIT IV annexed hereto
and as to such other matters as Agent may reasonably request.
M. OTHER CORPORATE ACTIONS. On or before the Closing Date, all corporate
and other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Agent, acting on behalf of Lenders, and its counsel shall be
reasonably satisfactory in form and substance to Agent and such counsel, and
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Agent may reasonably request.
N. ACKNOWLEDGEMENT. Agent shall have received the Acknowledgement, duly
executed by each of Holding and Company and each Material Domestic Subsidiary.
O. ORIGINAL CREDIT AGREEMENT. On the Closing Date, Company shall have
paid for distribution (as appropriate) to Lenders and Agent the aggregate
principal amount of Loans (as defined in the Original Credit Agreement)
outstanding under the Original Credit Agreement and all interest and fees
accrued under the Original Credit Agreement as of the Closing Date.
3.2 Conditions to All Revolving Credit Loans
The obligations of Agent and Lenders to make all Revolving Credit Loans on
each Funding Date (including, without limitation, the making of the Revolving
Credit Loans on the Closing Date) are subject to the following further
conditions precedent:
A. NOTICE OF BORROWING. Agent shall have received, in accordance with
the provisions of subsection 2.1B, before that Funding Date, an originally
executed Notice of Borrowing in each case signed by the Chief Executive Officer,
the President, the Chief Financial Officer, the Corporate Controller or the
Treasurer of Company, or by any officer of Company designated by any of the
above-described officers on behalf of Company in writing delivered to Agent.
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B. CONDITIONS TO FUNDING. As of that Funding Date:
1. The representations and warranties contained herein shall be true
and correct in all material respects on and as of that Funding Date to the
same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date;
2. No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute (a) an Event of Default or (b) a Potential
Event of Default;
3. Holding and its Subsidiaries shall have in all material respects
performed all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by them on or before that Funding
Date;
4. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making that Revolving Credit Loan; and
5. There shall not be pending or, to the knowledge of Holding or
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holding or Company or any
property of Holding or Company, that has not been disclosed by Holding or
Company in writing pursuant to subsection 4.6 or 5.1(v) prior to the making
of such Revolving Credit Loan (or, in the case of the initial Revolving
Credit Loans, prior to the Closing Date) and there shall have occurred no
development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in either
event, would reasonably be expected to either (i) materially and adversely
affect the business, operations, properties, assets or condition (financial
or otherwise) of Holding and its Subsidiaries taken as a whole, or the
prospects of Holding and its Subsidiaries taken as a whole or
(ii) materially and adversely impair the ability of Holding or any of its
Subsidiaries to perform or of Lenders to enforce the Obligations other
than, in either case, those matters that are adequately covered by
insurance or for which indemnification to Holding and its Subsidiaries
reasonably satisfactory to Agent has been provided. No injunction or other
restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, this Agreement or the making of Revolving Credit
Loans hereunder.
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3.3 Conditions to Letters of Credit
The obligation of any Issuing Lender to issue or extend any Letter of
Credit hereunder is subject to prior or concurrent satisfaction of all of the
following conditions:
A. On or before the date of issuance of such Letter of Credit, the
Issuing Lender with respect thereto shall have received, in accordance with the
provisions of subsection 2.8B, a notice requesting the issuance of such Letter
of Credit and all other information specified in subsection 2.8B, and such other
documents as such Issuing Lender may reasonably require in connection with the
issuance of such Letter of Credit.
B. On the date of issuance or extension of such Letter of Credit, all
conditions precedent described in subsection 3.2B shall be satisfied to the same
extent as though the issuance or extension of such Letter of Credit were the
making of a Revolving Credit Loan and the date of issuance or extension of such
Letter of Credit were a Funding Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES
This Section 4 shall not be effective or in full force and effect until the
Closing Date. In order to induce Agent and Lenders to enter into this
Agreement, Holding and Company severally represent and warrant to Agent and each
Lender that the following statements are true and correct:
4.1 Organization, Powers, Good Standing, Business and Subsidiaries
A. ORGANIZATION AND POWERS. Each of Holding, Company and each Material
Subsidiary is a corporation duly organized and validly existing under the laws
of its jurisdiction of incorporation and has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into each Loan Document to
which it is a party, and to carry out the transactions contemplated thereby.
B. GOOD STANDING. Each of Holding, Company and each Material Subsidiary
is in good standing as a qualified foreign corporation wherever necessary to
carry on its present business and operations, except in jurisdictions in which
the failure to be in good standing has not had and could not reasonably be
expected to have a material adverse effect on Holding and its Subsidiaries taken
as a whole.
C. SUBSIDIARIES. All of the Subsidiaries of Holding, as of the Closing
Date, are identified in SCHEDULE 4.1-D annexed hereto. SCHEDULE 4.1-D correctly
sets forth the ownership interest as of the Closing Date of Holding in each of
its Subsidiaries. All of the Material Subsidiaries of Company, as of the
Closing Date, are identified as such in SCHEDULE 4.1-D annexed hereto.
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4.2 Authorization of Borrowing, etc.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents and the transactions contemplated thereby have been duly
authorized, as appropriate, by all necessary corporate action by Holding,
Company and the Material Subsidiaries.
B. NO CONFLICT. The execution, delivery and performance by Holding,
Company and the Material Subsidiaries of the Loan Documents to which each such
Person is a party and the consummation of the transactions contemplated thereby
do not and will not (i) violate any provision of law applicable to Holding,
Company or any Material Subsidiary, the Certificate of Incorporation or Bylaws
(or equivalent documents) of Holding, Company or any Material Subsidiary, or any
order, judgment or decree of any court or other agency of government, domestic
or foreign, binding on Holding, Company or any Material Subsidiary,
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of Holding,
Company or any Material Subsidiary, (iii) pursuant to any such Contractual
Obligation, result in or require the creation or imposition of any Lien upon any
of the properties or assets of Holding, Company or any Material Subsidiary
(other than Liens in favor of (a) the Collateral Agent for the benefit of
Lenders and the Eurocurrency Lenders or (b) any Person as agent or trustee for
the benefit of any Eurocurrency Lender and any Liens permitted by subsection 6.2
or pursuant to the terms of any Eurocurrency Loan Document), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Holding, Company or any Material Subsidiary, except
for such approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lenders or which might be required in
connection with any security interest in deposit accounts, and except in the
cases of the foregoing clauses (i), (ii), (iii) and (iv) for any such
violations, conflicts, breaches and defaults the existence of which, and any
such approvals and consents the failure of which to be obtained, individually
and in the aggregate, would not reasonably be expected to have a material
adverse effect on the business or financial condition of Holding and its
Subsidiaries, taken as a whole, or on the ability of Holding, Company and the
Material Subsidiaries to perform their respective obligations under the Loan
Documents.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
each of Holding, Company and each Material Subsidiary of the Loan Documents to
which it is a party and the consummation of the transactions contemplated hereby
and thereby do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any Federal, state or
other governmental authority or regulatory body, domestic or foreign, except for
(y) filings, registrations, consents, approvals, notices or other actions
required in connection with the granting or perfection of security interests
granted pursuant to the Loan Documents, and (z) other registrations, consents,
approvals, notices and actions that have been or will be obtained or taken on or
before the Closing Date.
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D. BINDING OBLIGATION. The Loan Documents are the legally valid and
binding obligations of Holding, Company and the Material Subsidiaries, as their
interests and obligations appear herein and therein, enforceable against
Holding, Company and the Material Subsidiaries in accordance with their
respective terms, except (i) as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability, (ii) for
limitations on enforceability of any Loan Document to the extent it grants or
purports to grant any security interest in deposit accounts or rights of set-off
or other equitable rights of combination and (iii) for limitations on
enforceability of rights to indemnification under federal securities or other
laws or regulations or public policy.
4.3 Financial Condition
Company has heretofore delivered to Lenders and Eurocurrency Lenders, at
their request, the audited consolidated balance sheets of Holding and its
Subsidiaries as at March 31, 1996 and the related consolidated statements of
operations, cash flows and changes in stockholders' equity of Holding and its
Subsidiaries for the Fiscal Year then ended and the unaudited consolidated
balance sheet of Holding and its Subsidiaries as at June 28, 1996 and the
related statements of operations and cash flows for the fiscal quarter then
ended. All such financial statements were prepared in conformity with GAAP and
fairly present, in all material respects, the consolidated financial position of
Holding and its Subsidiaries as at the date thereof and the consolidated results
of operations and cash flows of Holding and its Subsidiaries for each of the
periods covered thereby subject, in the case of such June 28, 1996 financial
statements, to changes resulting from audit and normal year-end adjustments and
the absence of notes and such financial statements may be only substantially in
conformity with GAAP. At March 31, 1996, neither Holding nor any of its
Subsidiaries had any material (i) Contingent Obligation, (ii) contingent
liability or liability for taxes, (iii) long-term lease or (iv) unusual forward
or long-term commitment out of the ordinary course of business, that is not
reflected in such financial statements or in the notes thereto.
4.4 No Material Adverse Change; No Stock Payments
Since February 24, 1995, there has been no change in the business,
operations, properties, assets or condition (financial or otherwise) of Holding
and its Subsidiaries, which has been or could reasonably be expected to be
materially adverse to Holding and its Subsidiaries, taken as a whole. Neither
Holding, Company nor any Material Subsidiary has directly or indirectly
declared, ordered, paid or made or set aside any sum or property (excluding any
foreign law requirement to maintain a statutory reserve or the like) for any
Restricted Junior Payment or agreed to do so except as permitted by
subsection 6.5.
4.5 Title to Properties; Liens
Holding, Company and the Material Subsidiaries have good, sufficient and
legal title, subject only to Liens permitted pursuant to subsection 6.2 and the
Eurocurrency Loan
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Documents, to all their respective material owned properties and assets
reflected in the financial statements referred to in subsection 4.3 or in the
most recent financial statements delivered pursuant to subsection 5.1 of this
Agreement or the Eurocurrency Guaranties, except for assets (i) not material
to the business of Holding and its Subsidiaries taken as a whole, or (ii)
acquired or disposed of (A) in the ordinary course of business or (B) as
otherwise permitted under this Agreement since the date of the consolidated
balance sheet contained in such financial statements. All real property
leased by Holding, Company or any of the Material Domestic Subsidiaries at
which Inventory is located is identified in SCHEDULE 4.5 annexed hereto.
4.6 Litigation; Adverse Facts
Except as set forth on SCHEDULE 4.6 hereto or otherwise disclosed in
writing to Lenders and Eurocurrency Lenders prior to the Closing Date, there is
no action, suit, proceeding, governmental investigation or arbitration (whether
or not purportedly on behalf of Holding or any of its Subsidiaries) at law or in
equity or before or by any Federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of Holding or any of its Subsidiaries,
threatened against or affecting Holding or any of its Subsidiaries or any
property of Holding or any of its Subsidiaries that would reasonably be expected
to result in any material adverse change in the business, prospects, operations,
properties, assets or condition (financial or otherwise) of Holding and its
Subsidiaries taken as a whole, or would materially adversely affect Holding's,
Company's or any Material Domestic Subsidiary's ability to perform or Lenders'
ability to enforce the Obligations or would affect Holding's, Company's or any
Material Foreign Subsidiary's ability to perform, or Eurocurrency Lenders'
ability to enforce, the obligations owing or to be owed under the Eurocurrency
Loan Documents, other than those matters that are adequately covered by
insurance or for which indemnification to Holding and its Subsidiaries
reasonably satisfactory to Agent or Eurocurrency Administrative Agent, as
appropriate, has been provided. As of the Closing Date, none of Holding,
Company or any Material Subsidiary has received any notice of termination of any
material contract, lease or other agreement or suffered any material damage,
destruction or loss (whether or not covered by insurance) or had any employee
strike, work-stoppage, slow-down or lock-out any of which remain pending, that
would or could reasonably be expected to be materially adverse to Holding and
its Subsidiaries, taken as a whole.
4.7 Payment of Taxes
Except to the extent otherwise permitted by subsection 5.3, all taxes
required to be paid by Holding, Company and each Material Subsidiary which are
due and payable and are material to the business, operations, properties, assets
or condition (financial or otherwise) of Holding and its Subsidiaries taken as a
whole have been paid. Neither Holding, Company nor any Material Subsidiary
knows of any tax assessment proposed in writing against any such Person that
would be material to the condition (financial or otherwise) of Holding and its
Subsidiaries taken as a whole, except for any such tax assessment which is being
actively contested by such Person to the extent affected thereby, in good faith
and by appropriate proceedings, and with
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respect to which reserves or other appropriate provisions, if any, as shall
be required in conformity with GAAP shall have been made or provided therefor.
4.8 Materially Adverse Agreements; Performance of Agreements
A. Neither Holding, Company nor any Material Subsidiary is a party to or
is subject to any agreement or instrument materially and adversely affecting the
financial condition of Holding and its Subsidiaries, taken as a whole, except as
otherwise disclosed in writing to Lenders prior to the Closing Date.
B. Neither Holding, Company nor any Material Subsidiary is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation of any such Person, and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults or the consequences of actions curing such
default or defaults, if any, would not be reasonably expected to have a material
adverse effect on the business, properties, assets, operations or condition
(financial or otherwise) of Holding and its Subsidiaries, taken as a whole.
4.9 Governmental Regulation
Neither Holding nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940, or to any Federal
or state statute or regulation, domestic or foreign, limiting its ability to
incur Indebtedness for money borrowed or to create Liens on any of its
properties or assets to secure such Indebtedness that materially and adversely
affects its ability to perform its obligations under the Loan Documents.
4.10 Securities Activities
Neither Holding, Company or any Material Subsidiary is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
4.11 Employee Benefit Plans
A. Holding and each of its ERISA Affiliates is in compliance in all
material respects with any applicable provisions of the Internal Revenue Code,
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans.
B. No Termination Event has occurred or is reasonably expected to occur
with respect to any Pension Plan which would have a material adverse effect on
the financial condition of Holding and its Subsidiaries, taken as a whole.
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C. Based upon the actuarial assumptions, methods and most recent
valuation date utilized in the most recent actuarial valuation report prepared
with respect to each Pension Plan, as of such valuation date, the actuarial
present value of all benefit liabilities under all Pension Plans does not exceed
the fair market value of the assets allocable to such benefit liabilities by
more than $1,500,000. For purposes of the preceding sentence, the terms
"actuarial present value" and "benefit liabilities" shall have the meanings
specified in Section 4001 of ERISA.
D. Neither Holding nor any of its ERISA Affiliates has incurred or
reasonably expects to incur any withdrawal liability under Title IV of ERISA to
any Multiemployer Plan which would have a material adverse effect on the
financial condition of Holding and its Subsidiaries, taken as a whole.
E. None of Holding or any Subsidiary thereof has engaged in any
"prohibited transaction," as such term is defined in Section 4975 of the
Internal Revenue Code or Section 406 of Title I of ERISA in connection with any
Pension Plan for which no exemption was available under ERISA or the Internal
Revenue Code, that resulted in a liability under ERISA or the Internal Revenue
Code which would have a material adverse effect on the business or financial
condition of Holding and its Subsidiaries, taken as a whole.
F. Other than the post-retirement medical plan sponsored by Holding
covering certain employees who were employees prior to January 1987, employment
or supplemented employment agreements with three executive officers of Holding
and Company, the regular severance and vacation policies of Holding and its
Subsidiaries, certain key-man insurance policies and information (including
information disclosed pursuant to FAS 106) as to which has been disclosed in the
most recent financial statements of Holding and its Subsidiaries, none of
Holding or any Subsidiary thereof maintains or has maintained any welfare
benefit plan within the meaning of Section 3(1) of ERISA which provides for
continuing benefits or coverage for any participant or any beneficiary of a
participant after such participant's termination of employment except as may be
required by Part 6 of Title I of ERISA and the regulations thereunder or except
as to plans with respect to which such participant or beneficiary pays his or
her allocable share of the premium or other material costs of providing benefits
or coverage under such plan.
4.12 Disclosure
No representation or warranty of Holding, Company or any Material
Subsidiary contained in any Loan Document or any other document, certificate or
written statement furnished to Lenders by or on behalf of Company for use in
connection with the transactions contemplated by the Loan Documents contains any
untrue statement of a material fact or omits to state a material fact (known to
Holding, Company or any Material Subsidiary in the case of any document not
furnished by it) necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were made
as of the time the same were made. Since February 24, 1995, there is no fact
known to Holding, Company or any Material Subsidiary (other than matters of a
general economic, political or social nature)
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that materially and adversely affects the business, operations, property,
assets or condition (financial or otherwise) of Holding and its Subsidiaries,
taken as a whole, that has not been disclosed herein or in other documents,
certificates and written statements furnished to Lenders and Eurocurrency
Lenders from time to time for use in connection with the transactions
contemplated by the Loan Documents.
4.13 Licenses, Permits and Authorizations
Holding, Company and each Material Subsidiary has all approvals, licenses
or other permits of all governmental or regulatory agencies, whether Federal,
state or local, the absence of which would or could reasonably be expected to be
materially adverse to Holding and its Subsidiaries taken as a whole.
4.14 Intangible Property
Holding, Company and each Material Subsidiary owns or possesses licenses or
other rights to use all trade names, unregistered trademarks and service marks,
brand names, patents, registered and unregistered copyrights, registered
trademarks and service marks, and all applications for any of the foregoing, and
all permits, grants and licenses or other rights with respect thereto, in each
case used in the operation of its and their businesses in the manner in which
they are currently being conducted, the absence of which would be reasonably
expected to materially adversely affect the business, operations, assets or
financial condition of Holding and its Subsidiaries taken as a whole ("MATERIAL
INTELLECTUAL PROPERTY"). SCHEDULE 4.14 sets forth a true and complete list of
all service xxxx and trademark registrations and applications for registration
of Holding and its Subsidiaries included in the Material Intellectual Property
as of the date of this Agreement. Except as set forth on SCHEDULE 4.6 or
otherwise disclosed in writing to Lenders prior to the Closing Date, to the
knowledge of Holding and Company as of such date, no claim of infringement
materially adverse to the business, operations, or financial condition of
Holding and its Subsidiaries taken as a whole is currently being asserted by any
other Person to the use by Holding or any of its Subsidiaries of any Material
Intellectual Property, and neither Holding, Company nor any of its Material
Subsidiaries has been notified or advised of any such claim.
4.15 Environmental Matters
Except as disclosed in writing to Lenders prior to the Closing Date,
including disclosure in Holding's Annual Report on Form 10-K for the fiscal year
ended March 31, 1996:
(i) the operations of Holding, Company and each Material Subsidiary
(including, without limitation, all operations and conditions at or in the
Facilities) comply in all material respects with all applicable
Environmental Laws;
(ii) Holding, Company and each Material Subsidiary have obtained all
material environmental, health and safety permits necessary to their
respective operations, and all
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such permits are in good standing, and Holding, Company and each Material
Subsidiary are in compliance with all material terms and conditions of
such permits;
(iii) neither Holding, Company nor any Material Subsidiary has
received any Environmental Claim that would reasonably be expected to have
a material adverse effect on the business or financial condition of Holding
and its Subsidiaries, taken as a whole;
(iv) none of the operations of Holding, Company or any Material
Subsidiary is the subject of any pending judicial or administrative
proceeding alleging the violation of or liability under any Environmental
Laws which would reasonably be expected to have a material adverse effect
on the business or financial condition of Holding and its Subsidiaries,
taken as a whole;
(v) Holding, Company and each Material Subsidiary and all of their
present Facilities or operations, as well as their past Facilities or
operations, are not subject to any outstanding written order or agreement
with any governmental authority or private party respecting (A) any
Environmental Laws or (B) any Environmental Claims that would reasonably be
expected to have a material adverse effect on the business or financial
condition of Holding and its Subsidiaries, taken as a whole;
(vi) neither Holding, Company nor any Material Subsidiary has any
Contingent Obligation in connection with any Release of any Hazardous
Materials by Holding, Company or any Material Subsidiary that would
reasonably be expected to have a material adverse effect on the business or
financial condition of Holding and its Subsidiaries, taken as a whole;
(vii) neither Holding, Company nor any Material Subsidiary nor, as
of the Closing Date and to the knowledge of Holding and Company as of such
date, any predecessor of Holding, Company or Material Subsidiary has filed
any notice under any Environmental Law indicating past or present
treatment, storage, or disposal of Hazardous Materials at any Facility
except as a lawful incident of its business operation; none of Holding's or
any of its Material Subsidiary's operations involves the generation,
transportation, treatment or disposal of hazardous waste, as defined under
40 C.F.R. Parts 260-270 or any state equivalent except as a lawful incident
of its business operation; and neither Holding, Company nor any Material
Subsidiary nor, as of the Closing Date and to the knowledge of Holding and
Company as of such date, any predecessor in title to any of them nor, as of
the Closing Date and to the knowledge of Holding and Company as of such
date, has any third party at any time occupying any Facilities at any time
used, generated, disposed of, stored, transported to or from or released
any Hazardous Materials, from, under or effecting such Facility except as a
lawful incident of its business operation, which generation,
transportation, treatment, storage, use, disposal or release in any of the
foregoing cases would reasonably be expected to have a material adverse
effect on the business or financial condition of Holding and its
Subsidiaries, taken as a whole;
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(viii) no Hazardous Materials exist on, under or about any Facility
in a manner that would reasonably be expected to give rise to an
Environmental Claim having a material adverse effect on the business or
financial condition of Holding and its Subsidiaries taken as a whole, and
neither Holding, Company nor any Material Subsidiary has filed any notice
or report of a Release of any Hazardous Materials that would reasonably be
expected give rise to an Environmental Claim having a material adverse
effect on the business or financial condition of Holding and its
Subsidiaries taken as a whole;
(ix) as of the Closing Date and to the knowledge of Holding and
Company as of such date, no underground storage tanks or surface
impoundments are on or at the Facilities; and
(x) no Lien in favor of any governmental authority for (A) any
liability under Environmental Laws, or (B) damages arising from or costs
incurred by such governmental authority in response to a Release has been
filed or attached to the Facilities, which liability, damages or costs
would reasonably be expected to have a material adverse effect on the
business or financial condition of Holding and Subsidiaries, taken as a
whole.
SECTION 5. AFFIRMATIVE COVENANTS
Holding and Company severally covenant and agree that, on and after the
Closing Date, so long as the Revolving Credit Commitments hereunder shall be in
effect and until payment in full of all of the Revolving Credit Loans and all
other amounts owing hereunder, unless Requisite Lenders shall otherwise give
prior written consent, such Person shall perform all covenants in this Section 5
to be performed by it (including, in the case of Company, covenants applicable
to it in its capacity as a Subsidiary of Holding) and cause each of its Material
Subsidiaries to comply with all covenants in this Section 5 applicable to such
Subsidiary.
5.1 Financial Statements and Other Reports
Holding will maintain, or cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Lenders and Eurocurrency Lenders:
(i) as soon as practicable and in any event within 45 days after the
end of each of the first three fiscal quarters in each Fiscal Year
(including the fiscal quarter ended September 27, 1996), (a) management's
discussion and analysis of financial condition and results of operations
contained in Holding's Quarterly Report on Form 10-Q for such fiscal
quarter, or a written discussion and analysis in form and detail
substantially similar thereto and (b) consolidated balance sheets of
Holding and its
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Subsidiaries as at the end of such period and the related consolidated
statements of income, stockholders' equity and cash flow of Holding
and its Subsidiaries for such fiscal quarter and setting forth in
each case in comparative form the consolidated figures for the
corresponding periods of the previous Fiscal Year (all of said financial
statements set forth in this clause (b) shall also include consolidating
financial information with respect to the Material Subsidiaries), all in
reasonable detail and certified by the Chief Financial Officer, Corporate
Controller or Treasurer of Holding that they fairly present, in all
material respects, the financial condition of Holding and its Subsidiaries
as at the dates indicated and the results of their operations and cash
flows for the periods indicated, subject to changes resulting from audit
and normal year-end adjustments, and except that such financial statements
need not contain notes and may be prepared substantially in conformity with
GAAP;
(ii) as soon as practicable and in any event within 90 days after the
end of each Fiscal Year, to the extent not included in management's
discussion and analysis of financial condition and results of operations
contained in Holding's Annual Report on Form 10-K for such Fiscal Year,
(a) a written discussion of the financial and operating performance for the
fourth fiscal quarter of such Fiscal Year from a profit and loss, cash flow
and balance sheet standpoint and discussions of the major factors affecting
such performance, including but not limited to changes in working capital
for such fiscal quarter and consolidated balance sheets of Holding and its
Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of income (all of said financial statements set forth in this
clause (a) shall also include consolidating financial information with
respect to the Material Subsidiaries), stockholders' equity and cash flows
of Holding and its Subsidiaries for such Fiscal Year, setting forth in each
case, in comparative form the consolidated figures for the previous year,
all in reasonable detail, including the notes thereto which shall, among
other things, indicate that Holding and its Subsidiaries are in compliance
with the financial covenants contained in this Agreement, and accompanied
by a report thereon of Coopers & Xxxxxxx or such other independent
certified public accountants of recognized national standing selected by
Holding as shall be satisfactory to Agent which report shall be unqualified
as to going concern and scope of audit and shall state that such
consolidated financial statements present fairly, in all material respects,
the financial position of Holding and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in conformity with GAAP and that the audit by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards and (b) with respect
to the final quarter of such Fiscal Year, the schedules and financial
information set forth in clause (b) of subsection 5.1(i), certified by the
Chief Financial Officer, Corporate Controller or Treasurer of Holding as
fairly presenting the matters set forth therein as at the dates thereof;
(iii) together with (a) each delivery of financial statements of
Holding and its Subsidiaries pursuant to subdivisions (i) and (ii) of this
subsection 5.1 (other than the financial statements delivered for the
fiscal quarter ended September 27, 1996), (x) an
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Officers' Certificate of Holding stating that the signers have
reviewed the terms of this Agreement and the other Loan Documents and
have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Holding and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that the signers do not
have knowledge of the existence as of the date of the Officers'
Certificate, of any condition or event that constitutes an Event of
Default or Potential Event of Default, or, if any such condition or
event existed or exists, specifying the nature and period of existence
thereof and what action Holding has taken, is taking and proposes to
take with respect thereto; and (y) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
the applicable accounting periods with the restrictions contained in
this Agreement in the manner set forth in such Compliance Certificate;
and (b) the delivery of the financial statements of Holding and its
Subsidiaries pursuant to subdivision (i) of this subsection 5.1 for
the fiscal quarter ended September 27, 1996, a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of
such fiscal quarter with the covenants set forth in Section 6 of the
Original Credit Agreement as such covenants existed on September 27,
1996, in the manner set forth in such Compliance Certificate;
(iv) promptly upon any Executive Officer of Holding, Company or any
Material Subsidiary obtaining knowledge (a) that a condition or event has
occurred and is continuing that constitutes an Event of Default or
Potential Event of Default, or becoming aware that any Lender or Agent or
any Eurocurrency Lender or Eurocurrency Administrative Agent, as
appropriate, has given any notice or taken any other action with respect to
a claimed Event of Default or Potential Event of Default under any Loan
Document, (b) that any Person has given any notice to Holding, Company or
any Material Subsidiary or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection 8.2,
(c) of any condition or event that would be required to be disclosed in a
current report filed by Company with the Securities and Exchange Commission
on Form 8-K pursuant to Items 1, 2 or 4 of such Form as in effect on the
date hereof if Company were required to file such reports under the
Exchange Act, or (d) of a material adverse change in the business,
operations, properties, assets or condition (financial or otherwise) of
Holding and its Subsidiaries taken as a whole, or of an event or condition
that would reasonably be expected to result in such a material adverse
change, an Officers' Certificate specifying the nature and period of
existence of such condition or event, or specifying the notice given or
action taken by such holder or Person and the nature of such claimed
default, Event of Default, Potential Event of Default, event or condition,
and what action Holding, or Company has taken, is taking and proposes to
take with respect thereto;
(v) upon any officer of Holding, Company or any Material Subsidiary
obtaining knowledge of (a) the institution of, or non-frivolous threat in
writing of, any action, suit, proceeding, governmental investigation or
arbitration against or affecting
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Holding or any of its Subsidiaries or any property of Holding, Company
or any Subsidiaries not previously disclosed by Holding to Lenders and
Eurocurrency Lenders and involving potential liability of Holding,
Company or a Material Subsidiary for which reserves shall be required
in conformity with GAAP in excess of $250,000 in any such case
(excluding any potential liability that is within the coverage and
policy limits of insurance policies maintained by Holding, Company and
their respective Subsidiaries issued by independent insurers), or (b)
any material development in any such action, suit, proceeding,
governmental investigation or arbitration, that, in either case, would
reasonably be expected to have a material and adverse effect on the
business, operations, properties, assets or condition (financial or
otherwise) of Holding and its Subsidiaries taken as a whole or on the
prospects of Holding and its Subsidiaries taken as a whole, Holding
shall promptly give notice thereof to Lenders and Eurocurrency Lenders
and provide such other information as may be reasonably available to
it to enable Lenders and Eurocurrency Lenders and their counsel to
evaluate such matters;
(vi) promptly upon becoming aware that one of the following has
occurred or is about to occur: (a) Termination Event (other than a
standard termination of any Pension Plan pursuant to Section 4041(b) of
ERISA), or (b) non-exempt "prohibited transaction," as such term is defined
in Section 4975 of the Internal Revenue Code or Section 406 of ERISA in
connection with any Employee Benefit Plan or any trust created thereunder,
a written notice specifying the nature thereof, what action Holding or
Company has taken, is taking or proposes to take with respect thereto, and,
when known, any action taken or threatened by the Internal Revenue Service,
the Department of Labor, or the PBGC with respect thereto;
(vii) with reasonable promptness copies of (a) all notices
received by Holding, Company or any of their respective ERISA Affiliates of
the PBGC's intent to terminate any Pension Plan or to have a trustee
appointed to administer any Pension Plan; (b) each Schedule A (Actuarial
Information) to the annual report (Form 5500 Series) filed by Holding,
Company or any of their ERISA Affiliates with the Internal Revenue Service
with respect to each Pension Plan under which the present value of accrued
benefits under such plan exceeds the current value of the assets of such
plan as of the reporting date for such annual report; and (c) all notices
received by Holding, Company or any of their ERISA Affiliates from a
Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA;
(viii) promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available generally by Holding to its security holders or by Company or any
Material Subsidiary to its security holders, of all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Holding, Company or any Material Subsidiary with any securities exchange or
with the Securities and Exchange Commission or any governmental authority
succeeding to any of its functions, and of all press releases and other
statements made available generally by Holding, Company or any Material
Domestic Subsidiary to the public
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concerning material developments in the business of Holding and its
Subsidiaries, taken as a whole;
(ix) immediately prior to or coincident with the release thereof,
notice of all material press releases to Agent and Eurocurrency
Administrative Agent; and
(x) with reasonable promptness, such other information and data with
respect to Holding, Company or any Material Subsidiary as from time to time
may be reasonably requested by any Lender or Eurocurrency Lender.
5.2 Corporate Existence, etc.
Holding and Company will at all times preserve and keep in full force and
effect its respective corporate existence and all of its related rights and
franchises material to the business of Holding and its Subsidiaries, taken as a
whole, except as otherwise permitted by subsection 6.7.
5.3 Payment of Taxes and Claims; Tax Consolidation
A. Each of Holding, Company and each Material Subsidiary will pay or
cause to be paid all material taxes, assessments and other governmental charges
required to be paid by it before any material penalty accrues thereon, and all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or may
become a material Lien upon any of its properties or assets, prior to the time
when any material penalty or fine shall be accrued with respect thereto;
PROVIDED that so long as no such property or asset (other than money for such
charge or claim and the interest or penalty accruing thereof) of Holding,
Company or any Material Subsidiary is in danger of being lost or forfeited as a
result thereof, no such tax, assessment, charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made therefor.
B. Each of Holding, Company and each Material Subsidiary will not file or
consent to the filing of any consolidated federal income tax return with any
Person other than (i) Holding or any of its Subsidiaries or (ii) such other
Person with whom Holding, Company or any Material Subsidiary has entered into a
tax sharing agreement reasonably satisfactory to Agent requiring such other
Person to promptly reimburse Holding, Company or such Material Subsidiary in
cash for the reasonable value of any tax benefits attributable to Holding,
Company or such Material Subsidiary and effectively utilized by such other
Person to reduce its taxes payable.
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5.4 Maintenance of Properties; Insurance
Each of Holding, Company and each Material Subsidiary will maintain or
cause to be maintained in good repair, working order and condition (ordinary
wear and tear excepted) all material properties used in the business of such
Person and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof. Holding, Company and the Material
Subsidiaries will maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to their respective properties and
business and the properties and business of their respective Subsidiaries
against loss or damage of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar businesses and
similarly situated, of such types and in such amounts as are customarily carried
under similar circumstances by such other corporations. Each such policy of
insurance shall provide for at least thirty (30) days prior written notice to
Agent of any modification or cancellation of such policies. As soon as
practicable after the Closing Date and each anniversary thereof, Company shall
submit to Agent an Officers' Certificate setting forth in reasonable detail the
type and amount of insurance maintained pursuant to this subsection.
5.5 Inspection; Lender Meeting
Holding, Company and its Material Subsidiaries shall permit any authorized
representatives designated by any Lender or Eurocurrency Lender to visit and
inspect any of the properties of Holding, Company and its Material Subsidiaries,
including its and their financial and accounting records, and to make copies and
take extracts therefrom, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants, all
upon reasonable notice and at reasonable times during normal business hours and
as often as may be reasonably requested. Without in any way limiting the
foregoing, Company will participate in an annual meeting of Agent, Lenders and
Eurocurrency Lenders to be held at such place and time as may be agreed to by
Company and Agent.
5.6 Equal Security for Obligations; No Further Negative Pledges
A. If Holding, Company or any Material Domestic Subsidiary shall create
or assume any Lien upon any of its property or assets, whether now owned or
hereafter acquired, other than Liens permitted by the provisions of
subsection 6.2, unless Agent and Requisite Lenders shall otherwise consent in
writing, it shall make or cause to be made effective provision whereby the
Obligations and the Eurocurrency Guaranty Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness thereby secured as
long as any such Indebtedness shall be secured. If any Eurocurrency Borrower
shall create or assume any Lien upon any of its property or assets, whether now
owned or hereafter acquired, other than Liens permitted by the provisions of
subsection 6.2, unless Agent and Requisite Lenders shall otherwise consent in
writing, it shall make or cause to be made effective provision whereby the
obligations of such Eurocurrency Borrower under the Eurocurrency Credit
Agreement to which such Eurocurrency Borrower is a party will be secured by such
Lien equally and ratably with any and all other Indebtedness thereby secured as
long as any such Indebtedness shall be so secured.
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Notwithstanding the foregoing, this subsection 5.6A shall not be construed as
a consent by any Lender to any creation or assumption of any such Lien not
permitted by the provisions of subsection 6.2.
B. Except with respect to specific property encumbered to secure payment
of particular Indebtedness and with respect to Indebtedness permitted under
subsection 6.1, neither Holding, Company nor any Material Subsidiary shall enter
into any agreement prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired.
5.7 Compliance with Laws, etc.
Holding, Company and the Material Subsidiaries shall comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including, without limitation, all Environmental Laws),
noncompliance with which would or could reasonably be expected to materially
adversely affect the business, properties, assets, operations or condition
(financial or otherwise) of Holding and its Subsidiaries, taken as a whole.
5.8 Environmental Disclosure and Inspection
(A) Except as disclosed in writing to Lenders and Eurocurrency
Lenders prior to the Closing Date, Holding shall comply, and shall cause
each of Company and the Material Subsidiaries and their Facilities to
comply, and cause (a) their respective employees, agents, contractors and
subcontractors and (b) all tenants under any lease or occupancy agreement
affecting any portion of the Facilities to comply with all applicable
Environmental Laws in all material respects. With respect to any matters
described in the environmental reports provided to Lenders under
clause (ii) of subsection 3.1(P), Holding shall cause each of its
Subsidiaries to use all commercially reasonable efforts to comply in all
material respects with all Environmental Laws applicable to such matters in
a timely manner following the Closing Date. If requested by Requisite
Lenders, Holding shall provide Lenders a current supplemental report with
respect to the properties and businesses described in the environmental
audit report referred to in clause (i) of subsection 3.1(P).
(B) Except as to matters disclosed in writing to Lenders and
Eurocurrency Lenders prior to the Closing Date, Company shall promptly
advise Lenders and Eurocurrency Lenders in writing and in reasonable detail
of (a) any material Release of any Hazardous Material required to be
reported to any federal, state or local governmental or regulatory agency,
domestic or foreign, under all applicable Environmental Laws, (b) any
remedial action taken by Holding, Company or, to the extent Holding or any
of its Subsidiaries has any such knowledge, any such Person or Material
Subsidiary in response to (1) any Hazardous Material on, under or about any
Facility, the existence of which would reasonably be expected to result in
an Environmental Claim having a material adverse effect on the business or
financial
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condition of Holding and its Subsidiaries, taken as a whole or (2) any
Environmental Claim that would reasonably be expected to have a
material adverse effect on the business or financial condition of Holding
and its Subsidiaries taken as a whole, and (c) any request for information
from any governmental agency, domestic or foreign, that indicates such
agency is investigating whether Holding, Company or any Material Subsidiary
may be potentially responsible for a material Release of Hazardous
Materials.
(C) Company shall promptly notify Lenders and Eurocurrency Lenders of
any proposed acquisition of stock, assets, or property by Holding, Company
or any Material Subsidiary, that could reasonably be expected to result in
Environmental Claims having a material adverse effect on the business or
financial condition of Holding and its Subsidiaries, taken as a whole.
(D) Company shall, at its own expense, provide copies to Agent of
such documents or information to which Holding, Company or any Material
Subsidiaries has access as Agent may reasonably request in relation to any
matters disclosed pursuant to this subsection 5.8.
(E) Company shall promptly notify Lenders and Eurocurrency Lenders of
any material change in the validity or enforceability or any termination or
notice of termination of the indemnity obligations of Xxxxxx Xxxxxxxxxxx
owed to the Company pursuant to the Unisys Acquisition Agreement.
5.9 Hazardous Materials; Remedial Action
A. Each of Holding and Company shall, and shall cause the Material
Subsidiaries, to (i) store, use, dispose and transport any Hazardous Materials
in compliance with all applicable Environmental Laws, except to the extent that
any failure so to comply would not reasonably be expected to have a material
adverse effect on the business or financial condition of Holding and its
Subsidiaries, taken as a whole, and (ii) take promptly any and all necessary
remedial action in response to the Release of any Hazardous Materials on, under
or about any Facility, except (x) with respect to matters as to which Xxxxxx
Xxxxxxxxxxx is obligated to indemnify Holding or a Subsidiary thereof, or as to
which Holding or a Subsidiary thereof is contesting in good faith the extent of
its liability, or (y) to the extent that any failure so to take such action
would not reasonably be expected to have a material adverse effect on the
business or financial condition of Holding and its Subsidiaries, taken as a
whole. In the event Holding, Company or any Material Subsidiary undertakes any
remedial action with respect to any Hazardous Material on, under or about any
Facility, Holding, Company or such Material Subsidiary shall conduct and
complete such remedial action in compliance with all applicable Environmental
Laws, and in a manner not inconsistent with all applicable orders and directives
of all federal, state and local governmental authorities, except (a) when the
extent of Holding's, Company's or such Material Subsidiary's liability with
respect to such Hazardous Material is being contested in good faith by Holding,
Company or such Material Subsidiary or (b) to the extent that any failure so
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to comply or be not inconsistent would not reasonably be expected to have a
material adverse effect on the business or financial condition of Holding and
its Subsidiaries, taken as a whole.
B. Company shall not and shall not permit its Material Subsidiaries to
install or permit to be installed any regulated level of asbestos in any
property owned or leased by any of them, except as appropriate for the operation
of their respective equipment. With respect to any asbestos currently present
in such property, Company shall and shall cause its Material Subsidiaries to
promptly and in accordance with all applicable Environmental Laws and prudent
industry practices, maintain such asbestos in good and safe condition.
5.10 Further Assurances; New Subsidiaries; Intellectual Property; Landlord
Waivers
A. At any time or from time to time upon the request of Agent, Holding
or Company, or both, shall and shall cause the Material Domestic Subsidiaries
to execute and deliver such further documents (including without limitation,
such financing statements, continuation statements or amendments thereto and
such other documents and certificates as may be necessary or as Agent may
reasonably request, in order to perfect and preserve the security interests
granted or purported to be granted under any of the Collateral Documents, in
the event Company, Holding and/or any Material Domestic Subsidiary changes
its name or address) and do such other acts and things as Agent may
reasonably request in order to effect fully the purposes of this Agreement
and the other Domestic Loan Documents and to provide for payment of (i) the
Obligations in accordance with the terms of this Agreement and the other
Domestic Loan Documents and (ii) the Eurocurrency Guaranty Obligations in
accordance with the terms of the Eurocurrency Guaranties; PROVIDED, HOWEVER,
with respect to actions requested by Agent in connection with Collateral
consisting of deposit accounts, Holding, Company and the Material Domestic
Subsidiaries shall only be required to take actions limited to: (i)
providing joint notification with Agent to any such Person holding such
deposit accounts, stating that such deposit accounts are subject to a
security interest granted to Collateral Agent in connection with this
Agreement and the Eurocurrency Credit Agreements and upon the occurrence of
certain events, Collateral Agent shall have certain remedies, including the
restriction of withdrawals; and (ii) amending the applicable schedules to the
Collateral Documents. Without limiting any of the foregoing, in the event
(i) a Person becomes a Material Domestic Subsidiary after the Closing Date or
(ii) Holding, Company or any Material Domestic Subsidiary described in the
preceding clause (i) registers any trademark or material patent with any
governmental authority, then, Holding and Company, upon the request of Agent
shall or shall cause such Material Domestic Subsidiary to execute and deliver
such guaranties, Collateral Documents, and such other agreements, pledges,
assignments in a mutually reasonably satisfactory fashion, documents and
certificates (including, without limitation, any amendments to the Domestic
Loan Documents) as may be necessary or as Agent may reasonably request and do
such other acts and things as Agent may reasonably request in order to have
such Material Domestic Subsidiary guaranty and/or secure the Obligations and
its Eurocurrency Guaranty Obligations with its personal property (including
without limitation fixtures) or have such trademark or patent secure the
Obligations and its Eurocurrency Guaranty Obligations, and effect fully the
purposes of this Agreement and the other Domestic Loan Documents and to
provide for payment of (i) the
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Obligations in accordance with the terms of this Agreement and the other
Domestic Loan Documents and (ii) the Eurocurrency Guaranty Obligations in
accordance with the terms of the Eurocurrency Guaranties; PROVIDED that any
actions with respect to Collateral consisting of deposit accounts shall be
limited to the proviso in the immediately preceding sentence. Company shall,
and shall cause each Material Subsidiary to, in good faith use all reasonable
efforts to obtain landlord's waivers or subordinations in form and substance
satisfactory to Agent with respect to Collateral located in Facilities leased
by Company and each Material Domestic Subsidiary.
B. At any time or from time to time upon the request of Eurocurrency
Administrative Agent, Holding or Company, or both, shall and shall cause the
Material Foreign Subsidiaries to execute and deliver such further documents
(including without limitation, such financing statements, continuation
statements or amendments thereto and such other documents and certificates as
may be necessary or as Eurocurrency Administrative Agent may reasonably request,
in order to render effective against third parties the security interests
granted or purported to be granted under any of the Eurocurrency Security
Documents, in the event Company, Holding and/or any Material Foreign Subsidiary
changes its name or address) and do such other acts and things as Eurocurrency
Administrative Agent may reasonably request in order to effect fully the
purposes of the Eurocurrency Loan Documents and to provide for payment of the
obligations under the Eurocurrency Loan Documents in accordance with the terms
thereof; PROVIDED, HOWEVER, with respect to actions requested by Eurocurrency
Administrative Agent in connection with Collateral consisting of deposit
accounts, Holding, Company and the Material Foreign Subsidiaries shall only be
required to take actions limited to: (i) providing joint notification with
Eurocurrency Administrative Agent to any such Person holding such deposit
accounts, stating that such deposit accounts are subject to a security interest
granted to Eurocurrency Administrative Agent in connection with the Eurocurrency
Loan Documents and upon the occurrence of certain events, Eurocurrency
Administrative Agent shall have certain remedies, including the restriction of
withdrawals; and (ii) amending the applicable schedules to the Eurocurrency Loan
Documents. In the event that a Person becomes a Material Foreign Subsidiary
after the Closing Date, (i) if such Material Foreign Subsidiary is held directly
by (a) Holding or a Domestic Subsidiary, Holding or such Domestic Subsidiary
shall pledge 65% of the capital stock of such Foreign Subsidiary to secure the
Obligations pursuant to a pledge agreement reasonably satisfactory to Agent or
(b) a Foreign Subsidiary which is a Eurocurrency Borrower and party to a
Eurocurrency Security Document, such Eurocurrency Borrower shall pledge 100% of
the capital stock of such Material Foreign Subsidiary to secure its obligations
under the relevant Eurocurrency Credit Agreement pursuant to a pledge agreement
reasonably satisfactory to Eurocurrency Administrative Agent and (ii) in the
event that such Material Foreign Subsidiary is itself a Eurocurrency Borrower,
such Material Foreign Subsidiary shall enter into one or more security or pledge
agreements as may be necessary or as Eurocurrency Administrative Agent may
reasonably request and do such other acts and things as Eurocurrency
Administrative Agent may reasonably request in order to have such Material
Foreign Subsidiary secure its obligations as a Eurocurrency Borrower with its
personal property (including without limitation fixtures) under the relevant
Eurocurrency Credit Agreement; PROVIDED that no security or pledge agreements or
other action contemplated by this sentence
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shall be required to be entered into or taken to the extent required to avoid
(A) any violation of applicable law, (B) liability of officers, directors or
shareholders of Holding or any of its Subsidiaries, (C) an investment of
earnings in United States property under Section 956 (or any successor
provision) of the Code resulting in an inclusion in income of Holding or any
of its Domestic Subsidiaries under Section 951 (or any successor provision)
of the Code, (D) any material risk of any of the foregoing, or (E) costs
which Holding, the Agent, and the Eurocurrency Administrative Agent shall
determine to be excessive in relation to the benefits that would be conferred
by such security or pledge agreements or action.
5.11 Notice of Asset Transfers
A. Company shall give Agent written notice of US/US Transfers (describing
the type and location of all assets transferred) at such time, if any, that the
net aggregate book value of the assets transferred in US/US Transfers since
(i) February 24, 1995 exceeds $5,000,000 and (ii) the most recent Recalculation
Date exceeds $5,000,000. Upon receipt of such written notice, Agent shall have
30 days to make the appropriate filings against such assets in order to maintain
the perfection of the Liens with respect to all such assets transferred. On the
first day following any such 30-day period (the "Recalculation Date"), Company
and its Subsidiaries may make additional US/US Transfers, subject to the
restrictions set forth in clause (A) of subsection 6.7B(xv). The requirements
of this subsection 5.11A shall not apply to any Asset Transfer pursuant to
subsection 6.7B(ix) or 6.7B(xii) or involving the Proposed Closed Facilities or
any Discontinued Operations.
B. No later than 30 days after the end of each month, Company shall give
Eurocurrency Administrative Agent a written report listing all assets
constituting fixtures, machinery and equipment transferred in any UK/Swiss
Transfer, Swiss/UK Transfer or German Asset Transfer, in one transaction or a
series of related transactions, in which the aggregate net book value of such
assets exceeds the Dollar Equivalent of $50,000. Such written report shall list
the type and location of such assets and otherwise be in a form satisfactory to
permit the Eurocurrency Administrative Agent to perfect a Lien if and to the
extent the perfection of such a Lien on said assets is required under the
Eurocurrency Security Documents or this Agreement under applicable law in such
transferred assets. The requirements of this subsection 5.11B shall not apply
to any Asset Transfer pursuant to subsection 6.7B(ix) or 6.7B(xii) or involving
the Proposed Closed Facilities or any Discontinued Operations.
SECTION 6. NEGATIVE COVENANTS
Holding and Company severally covenant and agree that, on and after the
Closing Date, so long as the Revolving Credit Commitments shall be in effect and
until payment in full of all of the Revolving Credit Loans and all other amounts
owing hereunder, unless Requisite Lenders shall otherwise give prior written
consent, such Person will perform all covenants in this Section 6 to be
performed by it (including, in the case of Company, covenants applicable to
it
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in its capacity as a Subsidiary of Holding) and cause each of its Subsidiaries
to comply with all covenants in this Section 6 applicable to such Subsidiary.
6.1 Indebtedness
Holding and Company will not, and will not permit any Subsidiary to,
directly or indirectly, create, incur, assume, guaranty, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness, except:
(i) Holding and its Subsidiaries may become and remain liable with
respect to the Obligations;
(ii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of (y) Capital Leases if such Capital
Leases would be permitted under subsection 6.6A and (z) Indebtedness
incurred to purchase, or to finance or refinance the purchase price of,
personal property (including, without limitation, fixtures but excluding
Inventory) used in the conduct of Holding's or any of its Subsidiaries'
business; PROVIDED that in the case of clause (z) above (a) at the time of
incurrence, no Event of Default, or Potential Event of Default has occurred
and is continuing or would result therefrom, (b) the documentation pursuant
to which such Indebtedness is incurred either does not contain any
financial covenants or contains financial covenants less restrictive (to an
extent reasonably acceptable to Agent) than those contained in this
Agreement, (c) such documentation does not contain any "cross-default"
provision providing for a default on such Indebtedness solely upon the
occurrence of a default under any other Contractual Obligation of Holding
or any of its Subsidiaries (including this Agreement), other than a
Contractual Obligation between Holding or any of its Subsidiaries and the
holder of such Indebtedness or any of such holder's Affiliates, and (d) the
amount of such Indebtedness incurred is not greater than the fair market
value of (as determined in good faith by Company or the relevant Subsidiary
thereof), plus the delivered and installed cost and related expenses for,
any property so financed at the time of such acquisition;
(iii) Holding and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection 6.4;
(iv) Company and its Subsidiaries may make and maintain intercompany
loans to or from Holding or any Subsidiary thereof permitted by
subsection 6.3;
(v) Company and its Subsidiaries may remain liable with respect to
(A) the existing Indebtedness listed on SCHEDULE 6.1 annexed to the
Original Credit Agreement and (B) any refinancings, refundings, renewals or
extensions thereof, PROVIDED that the amount of such Indebtedness is not
increased at the time of such refinancing, refunding, renewal or extension;
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(vi) Discontinued Operations may become and remain liable with respect
to (x) Indebtedness for working capital and other general corporate
purposes not exceeding $2,000,000 in aggregate principal amount outstanding
at any time and (y) up to an additional $5,000,000 in aggregate outstanding
principal amount of Indebtedness; provided, however, that the net proceeds
of such additional Indebtedness are used solely to repay to Company
intercompany loans or Investments permitted by subsection 6.3(iii);
(vii) Latin American Subsidiaries may become and remain liable
with respect to Indebtedness for working capital and other general
corporate purposes not exceeding $3,000,000 in aggregate principal amount
outstanding at any time;
(viii) Foreign Subsidiaries not in existence on February 24, 1995
may become liable with respect to Indebtedness for working capital and
other general corporate purposes not exceeding $3,000,000 in aggregate
principal amount outstanding at any time for all such Subsidiaries;
(ix) Holding and its Subsidiaries may become and remain liable with
respect to Indebtedness under any Interest Hedge Agreements entered into
with any Lender or Eurocurrency Lender;
(x) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness not exceeding $3,000,000 in aggregate principal
amount outstanding at any time, incurred for the purpose of financing the
premiums for insurance policies;
(xi) Holding and its Subsidiaries may become and remain liable with
respect to Indebtedness pursuant to the Eurocurrency Credit Agreements;
(xii) Holding and its Subsidiaries may become and remain liable
with respect to Acquisition Debt not to exceed $25,000,000 in aggregate
principal amount outstanding at any time; and
(xiii) Company and its Subsidiaries may become and remain liable to
Barclays with respect to Indebtedness in respect of cash management
facilities offered to Company and its Subsidiaries by Barclays; and
(xiv) In addition to the Indebtedness permitted by clauses (i)-
(xiii), Holding, and its Subsidiaries may become and remain liable with
respect to unsecured Indebtedness not exceeding at any one time $5,000,000
in aggregate outstanding principal amount.
6.2 Liens
Holding and Company will not, and will not permit any Subsidiary to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any property or asset (including any document or instrument in
respect of goods or accounts receivable) of
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Holding, Company or any Subsidiary, whether now owned or hereafter acquired,
or any income or profits therefrom, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens created to secure the Indebtedness permitted pursuant
to subsection 6.1(ii); PROVIDED such Liens relate solely to the property
financed with such Indebtedness;
(iv) Liens existing on February 24, 1995 which secure the Indebtedness
permitted pursuant to subsection 6.1(v) (or are provided for on such date
under the documentation relating to such Indebtedness) and which are listed
on SCHEDULE 6.2 annexed to the Original Credit Agreement, and renewal of
such Liens in connection with any refinancing, refunding, renewal or
extension permitted by clause (B) of subsection 6.1(v), PROVIDED that no
such Lien is extended to cover any additional property or assets after
February 24, 1995 in connection with any refinancing, refunding, renewal or
extension contemplated by such clause (B) to subsection 6.1(v);
(v) Liens on assets of Discontinued Operations securing Indebtedness
permitted pursuant to subsection 6.1(vi);
(vi) Liens on assets of Latin American Subsidiaries securing
Indebtedness, permitted pursuant to subsection 6.1(vii);
(vii) Liens on assets of new Foreign Subsidiaries not in existence
on February 24, 1995 securing Indebtedness permitted by
subsection 6.1(viii);
(viii) Liens on insurance policies or the proceeds of insurance
policies to secure Indebtedness permitted by subsection 6.1(x);
(ix) Liens deemed to arise from any sale or discounting of notes or
accounts receivable permitted by subsection 6.7B(xiii) and 6.9;
(x) Liens granted to the Eurocurrency Administrative Agent pursuant
to the Eurocurrency Loan Documents; and
(xi) Liens on assets securing Indebtedness permitted by
subsection 6.1(xii), PROVIDED, in the case of Indebtedness referred to in
clause (i) of the definition of Acquisition Debt, such Liens securing such
Indebtedness were in existence prior to the date of any Permitted
Acquisition and were not placed against such assets in anticipation of such
Permitted Acquisition.
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6.3 Investments
Holding and Company will not, and will not permit any Subsidiary to,
directly or indirectly, make or own any Investment in any Person, except:
(i) Company and its Subsidiaries may make and own Investments in Cash
Equivalents;
(ii) Company may make and maintain intercompany loans to Holding to
the extent permitted by subsection 6.5;
(iii) Investments existing on February 24, 1995 and listed on
SCHEDULE 6.3 annexed to the Original Credit Agreement;
(iv) Company and its Subsidiaries may make and maintain Investments as
permitted by subsection 6.5 and by clauses (i), (ii), (v), (vi), (vii),
(viii), (ix), (x), (xi), (xii), (xiv) and (xv) of subsection 6.7B;
(v) Company and its Subsidiaries may make and maintain Investments in
(including intercompany loans to) Company and the Material Domestic
Subsidiaries for any purpose; provided, however, if any such Investments
are made in a Domestic Subsidiary which is a direct Subsidiary of Holding,
(A) such investment shall be in the form of an intercompany loan,
(B) Company or such Subsidiary making the loan, as appropriate, shall
maintain a ledger and record all such loans pursuant to this
subsection 6.3(v) and such ledger shall be available for inspection at any
Lender's request and (C) all such intercompany loans made by Company or the
Material Domestic Subsidiaries shall be evidenced by promissory notes which
shall be pledged to Agent pursuant to the Collateral Documents;
(vi) In addition to the Investments described in clause (vii) of this
subsection 6.3 below, Company may make Investments in N-K Interface
Limited, up to an amount of $500,000 outstanding at any time;
(vii) Company and its Material Domestic Subsidiaries may make and
maintain Investments of cash and cash equivalents in (including
intercompany loans to) Eurocurrency Borrowers for any purpose; PROVIDED,
HOWEVER, that (A) the aggregate principal amount of all such Investments in
all such Eurocurrency Borrowers shall not exceed $15,000,000 outstanding at
any time, (B) Company or any such Material Domestic Subsidiary, as
appropriate, shall maintain a ledger recording all such Investments in and
intercompany loans made pursuant to this subsection 6.3(vii) and such
ledger shall be available for inspection at any Lender's request and
(C) all intercompany loans made pursuant to this subsection 6.3(vii) shall
be evidenced by promissory notes;
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(viii) Company and its Material Domestic Subsidiaries may make and
maintain Investments in (including intercompany loans to) Latin American
Subsidiaries for any purpose; PROVIDED, HOWEVER, that (A) the aggregate
principal amount of all such Investments in all Latin American Subsidiaries
shall not exceed $5,000,000 outstanding at any time, (B) Company or any
such Material Domestic Subsidiary, as appropriate, shall maintain a ledger
recording all such Investments in and intercompany loans made pursuant to
this subsection 6.3(viii) and such ledger shall be available for inspection
at any Lender's request and (C) all intercompany loans made pursuant to
this subsection 6.3(viii) shall be evidenced by promissory notes;
(ix) Xxxxx and Hardcopy Deutschland may make and maintain Investments
in (including intercompany loans to) its Subsidiaries and Chinese
operations for any purpose; PROVIDED, HOWEVER, that (A) the aggregate
principal amount of all such Investments shall not exceed $5,000,000
outstanding at any time, and (B) Xxxxx shall maintain a ledger recording
all such Investments in and intercompany loans made pursuant to this
subsection 6.3(ix) and such ledger shall be available for inspection at any
Eurocurrency Lender's request;
(x) Produktions and Pelikan Hardcopy may make and maintain
Investments in (including intercompany loans to) its Subsidiaries for any
purpose; PROVIDED, HOWEVER, that (A) the aggregate principal amount of all
such Investments shall not exceed $20,000,000 outstanding at any time,
(B) Produktions shall maintain a ledger recording all such Investments in
and intercompany loans made pursuant to this subsection 6.3(x) and such
ledger shall be available for inspection at any Eurocurrency Lender's
request and (C) all intercompany loans made pursuant to this
subsection 6.3(x) shall be evidenced by promissory notes or other evidence
of indebtedness which shall be pledged to Eurocurrency Administrative Agent
pursuant to the appropriate Eurocurrency Security Documents;
(xi) In addition to Investments permitted by subsection 6.3(iii),
Pelikan Scotland may make and maintain Investments in (including
intercompany loans to) its Subsidiaries and the U.K. Subsidiaries for any
purpose; PROVIDED, HOWEVER, that (A) the aggregate principal amount of all
such Investments shall not exceed $5,000,000 outstanding at any time,
(B) Pelikan Scotland shall maintain a ledger recording all such Investments
in and intercompany loans made pursuant to this subsection 6.3(xi) and such
ledger shall be available for inspection at any Eurocurrency Lender's
request and (C) all intercompany loans made pursuant to this
subsection 6.3(xi) shall be evidenced by promissory notes or other evidence
of indebtedness which shall be pledged to Eurocurrency Administrative Agent
pursuant to the appropriate Eurocurrency Security Documents;
(xii) Xxxxx and Hardcopy Deutschland may make and maintain
Investments in Produktions, Pelikan Hardcopy and Pelikan Scotland for any
purpose; PROVIDED, HOWEVER, that (A) the aggregate principal amount of all
such Investments shall not exceed
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$15,000,000 outstanding at any time, (B) Xxxxx shall maintain a ledger
recording all such Investments made pursuant to this subsection 6.3(xii)
and such ledger shall be available for inspection at any Eurocurrency
Lender's request and (C) all Investments made pursuant to this
subsection 6.3(xii) shall be evidenced by promissory notes which shall
be on terms and conditions satisfactory to Eurocurrency Administrative
Agent and shall be subordinated to the debt evidenced by the
Eurocurrency Credit Agreement to which the Person in whom the Investment
hereunder is being made is party such that no payments shall be made on
such intercompany indebtedness after the occurrence of a Potential Event
of Default or Event of Default under such Eurocurrency Credit Agreement;
(xiii) Produktions and Pelikan Hardcopy may make and maintain
Investments in Xxxxx, Hardcopy Deutschland and Pelikan Scotland for any
purpose; PROVIDED, HOWEVER, that (A) the aggregate principal amount of all
such Investments shall not exceed $15,000,000 outstanding at any time,
(B) Produktions shall maintain a ledger recording all such Investments made
pursuant to this subsection 6.3(xiii) and such ledger shall be available
for inspection at any Eurocurrency Lender's request and (C) all Investments
made pursuant to this subsection 6.3(xiii) shall be evidenced by promissory
notes which shall be on terms and conditions satisfactory to Eurocurrency
Administrative Agent and shall be pledged to Eurocurrency Administrative
Agent pursuant to the appropriate Eurocurrency Security Documents and, to
the extent such Investment is being made in Pelikan Scotland, shall be
subordinated to the debt evidenced by the U.K. Credit Agreement such that
no payments shall be made on such intercompany indebtedness after the
occurrence of a Potential Event of Default or Event of Default under the
U.K. Facility Agreement;
(xiv) Pelikan Scotland may make and maintain Investments in Xxxxx,
Hardcopy Deutschland, Produktions or Pelikan Hardcopy for any purpose;
PROVIDED, HOWEVER, that (A) the aggregate principal amount of all such
Investments shall not exceed $15,000,000 outstanding at any time,
(B) Pelikan Scotland shall maintain a ledger recording all such Investments
made pursuant to this subsection 6.3(xiv) and such ledger shall be
available for inspection at any Eurocurrency Lender's request and (C) all
Investments made pursuant to this subsection 6.3(xiv) shall be evidenced by
promissory notes which shall be on terms and conditions satisfactory to
Eurocurrency Administrative Agent and shall be pledged to Eurocurrency
Administrative Agent pursuant to the appropriate Eurocurrency Security
Documents and, to the extent such Investment is being made in Produktions
or Pelikan Hardcopy, shall be subordinated to the debt evidenced by the
Swiss Facility Agreement such that no payments shall be made on such
intercompany indebtedness after the occurrence of a Potential Event of
Default or Event of Default under the Swiss Facility Agreement;
(xv) Xxxxx, Hardcopy Deutschland, Produktions, Pelikan Hardcopy and
Pelikan Scotland may make and maintain Investments in Company for any
purpose; PROVIDED, HOWEVER, that (A) the aggregate principal amount of all
such Investments shall not exceed
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$30,000,000 outstanding at any time, (B) any Eurocurrency Borrower
making any such Investments shall maintain a ledger recording all such
Investments made pursuant to this subsection 6.3(xv) and such ledger
shall be available for inspection at any Eurocurrency Lender's request,
(C) all Investments made by Produktions, Pelikan Hardcopy or Pelikan
Scotland pursuant to this subsection 6.3(xv) shall be evidenced by
promissory notes which shall be on terms and conditions satisfactory to
Eurocurrency Administrative Agent and shall be pledged to Eurocurrency
Administrative Agent pursuant to the appropriate Eurocurrency Security
Documents and shall be subordinated to the debt evidenced by this
Agreement such that no payments shall be made on such intercompany
indebtedness after the occurrence of a Potential Event of Default or
Event of Default under this Agreement and (D) all Investments made by
Xxxxx or Hardcopy Deutschland pursuant to this subsection 6.3(xv) shall
be evidenced by promissory notes which shall be on terms and conditions
satisfactory to Eurocurrency Administrative Agent and shall be
subordinated to the debt evidenced by this Agreement such that no
payments shall be made on such intercompany indebtedness after the
occurrence of a Potential Event of Default or Event of Default under
this Agreement;
(xvi) Other Investments in an aggregate principal amount not in
excess of $5,000,000 at any time; PROVIDED, that any violation of the
covenant contained in this subsection 6.3(xvi) by an amount not exceeding
$1,000,000 shall not constitute an Event of Default unless such violation
has not been remedied or waived within ten days after the earlier of
(y) actual knowledge of such violation by an executive officer of Company
or (z) receipt by Holding or Company of notice from Agent of any such
violation.
Notwithstanding anything in this Agreement to the contrary and other than as
permitted with respect to Permitted Acquisitions, in no event shall the
aggregate amount of Investments made after February 24, 1995 by Holding, Company
and the Domestic Subsidiaries in Foreign Subsidiaries, permitted pursuant to
this subsection 6.3 or subsection 6.7(B)(viii), exceed $30,000,000 in aggregate
principal amount outstanding at any time.
6.4 Contingent Obligations
Holding and Company will not, and will not permit any Subsidiary to,
directly or indirectly, create or become or be liable with respect to any
Contingent Obligation except:
(i) Contingent Obligations in respect of the Obligations;
(ii) guaranties resulting from endorsement of negotiable instruments
for collection in the ordinary course of business;
(iii) guaranties by Holding, Company or any Domestic Subsidiary in
the ordinary course of business of Operating Leases and Capital Leases of
Holding, Company or such Domestic Subsidiary permitted by subsection 6.6A;
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(iv) guaranties by Holding or its Subsidiaries in the ordinary course
of business of Operating Leases and Capital Leases of any Foreign
Subsidiary permitted by subsection 6.6A;
(v) Contingent Obligations in respect of Permitted Acquisitions;
(vi) guaranties by Holding and its Subsidiaries of loans or advances
to employees for moving, travel and entertainment expenses, drawing
accounts and similar expenditures made in the ordinary course of business;
(vii) Contingent Obligations in respect of interest rate or
foreign currency protection agreements or hedging arrangements permitted
pursuant to subsection 6.1(ix);
(viii) obligations to insurers in respect of workers' compensation
and other insurance coverage incurred in the ordinary course of business;
(ix) Contingent Obligations in respect of the Eurocurrency Credit
Agreements;
(x) guarantees, product warranties or indemnities issued by Company
or its Subsidiaries in the ordinary course of business in connection with
the sale of Inventory, services or assets;
(xi) Contingent Obligations in respect of existing litigation set
forth on Schedule 4.6 attached hereto;
(xii) Contingent Obligations in respect of Indebtedness permitted
pursuant to subsection 6.1(vii), (viii), (ix), (xii), (xiii) and (xiv);
(xiii) Contingent Obligations in respect of surety, appeal,
performance or return-of-money bonds not to exceed $1,000,000 in the
aggregate outstanding at any time; and
(xiv) In addition to the Contingent Obligations permitted by
clauses (i)-(xiii), Holding and its Subsidiaries may become and remain
liable with respect to Contingent Obligations not exceeding at any one time
$2,000,000; PROVIDED, that any violation of the covenant contained in this
subsection 6.4(xiv) by an amount not exceeding $1,000,000 shall not
constitute an Event of Default unless such violation has not been remedied
or waived within ten days after the earlier of (y) actual knowledge of such
violation by an executive officer of Company or (z) receipt by Holding or
Company of notice from Agent of any such violation.
6.5 Restricted Junior Payments
Holding and Company will not, and will not permit any Domestic Subsidiary
to, directly or indirectly, declare, order, pay, make or set apart any sum
(excluding any foreign law
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requirement to maintain a statutory reserve or the like) for any Restricted
Junior Payment except:
(i) Company may declare and pay dividends or otherwise make
distributions, loans or advances to Holding, and Holding may declare and
pay dividends or otherwise make distributions in respect of its stock or
repurchase any of its outstanding stock, in an aggregate amount not to
exceed $12,000,000 plus 25% of Consolidated Net Income earned from February
24, 1995; provided, however, nothing contained herein shall prohibit
Holding from paying any dividend or making any distribution in respect of
its stock required or permitted by the terms of Holding's Rights Agreement,
dated as of May 19, 1994 and amended as of November 15, 1994, between
Holding and Chemical Bank, as Rights Agent, and the Series A Junior
Participating Preferred Stock issuable upon the exercise of any preferred
share purchase right, as said Rights Agreement and Series A Junior
Participating Preferred Stock may be supplemented from time to time;
(ii) In addition to clause (i) above of this subsection 6.5, Company
may declare and pay dividends or otherwise make distributions, loans or
advances to Holding of up to an aggregate amount of $6,000,000 to permit
Holding to purchase or cancel any stock options or settle any stock
appreciation rights held by, or distribute any amounts under any deferred
compensation plan or arrangement in respect of, any employee or director of
Holding or any of its Subsidiaries upon termination of employment or other
service, or to purchase any of its stock held by any such employee or
director;
(iii) Company may declare and pay dividends or otherwise make
distributions, loans or advances to Holding in amounts sufficient to cover
reasonable and necessary expenses incurred by Holding in connection with
registration, public offerings and exchange listing of equity securities;
(iv) Company may declare and pay dividends or otherwise make
distributions, loans or advances to Holding in amounts sufficient to pay
tax liabilities of Holding;
(v) Company may declare and pay dividends or otherwise make
distributions, loans or advances to Holding in amounts sufficient to allow
Holding to pay other business and operating expenses incurred in the
ordinary course of business;
(vi) Company may make (a) payments (including prepayments) on Existing
Seller Notes and (b) payments of amounts due under the Non-Competition
Agreements; and
(vii) Company may declare and pay dividends or otherwise make
distributions, loans or advances to Holding in amounts sufficient to pay
the cash consideration of any Permitted Acquisition by Holding;
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PROVIDED, HOWEVER, that immediately prior to and immediately after giving effect
to any Restricted Junior Payment permitted by clauses (i) and (ii) of this
subsection 6.5 and clause (vi) of this subsection 6.5 relating to voluntary
prepayments on Existing Seller Notes, no Event of Default or Potential Event of
Default exists. Holding and Company will not, nor will they permit any of
Material Domestic Subsidiary to, deposit any funds for the purpose of making any
Restricted Junior Payment with a trustee, paying agent or registrar or other
payment intermediary more than three Business Days prior to the date such
payment is due.
6.6 Financial Covenants
A. CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDA
Holding and its Subsidiaries shall not permit the ratio of (i) Consolidated
Total Debt as of any such date of determination to (ii) Consolidated EBITDA
(calculated as of any such date of determination on a cumulative basis for the
period of four consecutive fiscal quarters ending on or before such date of
determination) to (a) exceed 3.50 to 1 at the end of the first eight consecutive
fiscal quarters immediately following the Closing Date commencing with the
fiscal quarter ending in December of 1996 and (b) 3.00 to 1 at the end of each
fiscal quarter thereafter.
B. MINIMUM INTEREST COVERAGE RATIO
Holding and its Subsidiaries will not permit the Interest Coverage Ratio as
of the last day of each fiscal quarter (calculated as of any such date of
determination on a cumulative basis for the period of four consecutive fiscal
quarters ending on or before such date of determination) to be less than 3.0 to
1.
C. MINIMUM CONSOLIDATED NET WORTH
Holding and its Subsidiaries shall not permit Consolidated Net Worth at any
time after the Closing Date to be less than the sum of (i) $80,000,000 plus
(ii) 75% of the cumulative amount of positive Consolidated Net Income (which
shall exclude the Consolidated Net Income for any fiscal quarter in which
Consolidated Net Income was a negative number) earned on or after February 24,
1995, and ending on such determination date.
D. MAXIMUM CONSOLIDATED GAAP CAPITAL EXPENDITURES
Holding and its Subsidiaries shall not permit Consolidated GAAP Capital
Expenditures (excluding Permitted Acquisitions) to exceed $20,000,000 in any
Fiscal Year (the "MAXIMUM AMOUNT"); PROVIDED that the Maximum Amount for each
Fiscal Year shall be increased by an amount equal to one half of the excess, if
any, of the Maximum Amount for the previous Fiscal Year (before making any
adjustments in accordance with this proviso) over the actual amount of
Consolidated GAAP Capital Expenditures for such previous Fiscal Year
(Consolidated GAAP Capital Expenditures permitted as a result of the foregoing
PROVISO shall first be applied to the
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Consolidated GAAP Capital Expenditures permitted for each Fiscal Year before
making any adjustments in accordance with such PROVISO).
E. AFTER TAX CASH FLOW TO FIXED CHARGES
Holding and its Subsidiaries will not permit the ratio of (i) After Tax
Cash Flow to (ii) Fixed Charges as of the last day of each fiscal quarter
(calculated as of any such date of determination for the period of four
consecutive fiscal quarters ending on or before such date of determination) to
be less than 1.75 to 1.
6.7 Restriction on Fundamental Changes
A. Other than as permitted by subsection 6.7B, neither Holding, Company
nor any Subsidiary may, without the consent of Requisite Lenders, acquire or
create any Subsidiaries or convey, sell, lease, sublease or transfer any of its
assets to any of its Subsidiaries.
B. Neither Holding, Company nor any Subsidiary will enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, exchange, lease,
sub-lease, transfer or otherwise dispose of, in one transaction or a series of
related transactions, all or any substantial part of its business, property or
fixed assets or all or any portion of the stock or other evidence of beneficial
ownership of, whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person except:
(i) Holding may be merged or consolidated with or into Company, or
all or substantially all of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company and Holding thereafter
may be liquidated, wound up or dissolved; PROVIDED that, in the case of
such a merger or consolidation, Company shall be the continuing or
surviving corporation;
(ii) Holding, Company or any Subsidiary thereof, may acquire stock or
assets of any Person; PROVIDED that in the case of the acquisition of all
or substantially all the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Person, (w) Agent shall have
received at least 10 days prior to the date of such acquisition a
Compliance Certificate, setting forth the covenant calculations described
therein after giving pro forma effect to such acquisition as of the date of
Holding's most recent available quarterly consolidated financial
statements, (x) the aggregate Acquisition Value permitted by this
subsection 6.7B(ii) in connection with all such acquisitions since
January 1, 1996 shall not exceed an amount of $25,000,000, (y) in the case
of an acquisition of stock where the acquired Person will become a
Subsidiary of Holding which is not a direct or indirect Subsidiary of
Company, the cash consideration paid in respect of any such acquisition by
Holding may not exceed 20% of the Acquisition Value
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of such acquisition, and (z) in the case of an acquisition of stock, the
acquired Person will become a Subsidiary of Holding or Company;
PROVIDED, FURTHER, that if such acquired Person becomes a Material
Subsidiary, it shall comply with subsection 5.10(A) or subsection
5.10(B), as appropriate;
(iii) Company or a Subsidiary thereof may sell, lease, license,
exchange or otherwise dispose of assets or rights in Asset Sale
transactions; PROVIDED that (A) any Asset Sale is made for at least the
fair market value of such assets (as determined in good faith by Company or
such Subsidiary), (B) the aggregate Net Cash Proceeds of Asset Sale
transactions since February 24, 1995 with respect to assets located in the
United Kingdom shall not exceed 10% of the Pounds Sterling equivalent of
the net book value, determined as of February 24, 1995, of all assets of
Company and its Subsidiaries located in the United Kingdom on February 24,
1995, (C) the aggregate Net Cash Proceeds of Asset Sales transactions since
February 24, 1995 with respect to assets located in Switzerland shall not
exceed 10% of the Swiss Franc equivalent of the net book value, determined
as of February 24, 1995, of all assets of Company and its Subsidiaries
located in Switzerland on February 24, 1995, (D) the aggregate Net Cash
Proceeds of Asset Sales transactions since February 24, 1995 with respect
to assets located in Germany shall not exceed 10% of the German Xxxx
equivalent of the net book value, determined as of February 24, 1995, of
all assets of Company and its Subsidiaries located in Germany on
February 24, 1995, (E) Asset Sale transactions involving assets located in
the United States may be made if the Net Cash Proceeds thereof are applied
as provided in subsection 2.4(A)(ii) and (F) with respect to Asset Sale
transactions not otherwise referred to in clauses (B), (C), (D) or (E)
above or not otherwise expressly permitted by this subsection 6.7B, Company
receives the prior written consent of Requisite Lenders for any such Asset
Sale or series of related Asset Sales involving the fair market value of
assets (as determined in good faith by Company or such Subsidiary) or sales
price in excess of $250,000; PROVIDED, FURTHER, that the restrictions on
Asset Sale transactions set forth in the foregoing PROVISO shall not apply
to any Asset Sale transactions involving (1) the Proposed Closed
Facilities, (2) any Discontinued Operations or (3) any capital stock or
treasury stock of Holding, or any rights, options or warrants to acquire
same; PROVIDED, HOWEVER in no event may any stock of any Material
Subsidiary be sold;
(iv) Holding and its Subsidiaries may make Sale/leasebacks permitted
by subsection 6.8;
(v) A Domestic Subsidiary may be merged or consolidated with or into
Company or another Domestic Subsidiary, or be liquidated, wound up or
dissolved; PROVIDED, HOWEVER, that in the case of such a merger or
consolidation of a Material Domestic Subsidiary, (i) Company or another
Material Domestic Subsidiary shall be the continuing or surviving
corporation and (ii) another Subsidiary which becomes a Material Domestic
Subsidiary and complies with the requirements of subsection 5.10A shall be
the continuing or surviving corporation;
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(vi) A Foreign Subsidiary may be merged or consolidated with or into
another Foreign Subsidiary; PROVIDED, HOWEVER, that (x) if any capital
stock of either such Foreign Subsidiary shall have previously been required
to be pledged to Collateral Agent or Eurocurrency Administrative Agent,
such Foreign Subsidiary shall be the surviving corporation in such merger
or consolidation or the same proportion of the surviving corporation's
capital stock shall be similarly pledged to Collateral Agent or
Eurocurrency Administrative Agent, as applicable, and (y) a Foreign
Subsidiary not part of Discontinued Operations may not be merged or
consolidated with another Foreign Subsidiary that is part of Discontinued
Operations unless the former Subsidiary or another Subsidiary which is not
a part of Discontinued Operations is the surviving or continuing
corporation. Any Foreign Subsidiary the capital stock of which is not
required to be pledged to Collateral Agent or Eurocurrency Collateral Agent
may be liquidated, wound up or dissolved;
(vii) Holding or Company may create one or more new Domestic
Subsidiaries thereof; PROVIDED such Domestic Subsidiary, if it is or
becomes a Material Domestic Subsidiary, shall comply with
subsection 5.10(A);
(viii) Holding or a Subsidiary thereof may create one or more new
Foreign Subsidiaries of such Person; PROVIDED, subject to
subsection 5.10(B), if such Foreign Subsidiary is held directly by
(i) Holding or a Domestic Subsidiary and such Foreign Subsidiary is or
becomes a Material Subsidiary, such Person shall pledge 65% of the capital
stock of such Foreign Subsidiary to secure the Obligations pursuant to a
pledge agreement in form and substance reasonably satisfactory to Agent or
(ii) a Foreign Subsidiary which is a Eurocurrency Borrower and party to a
Eurocurrency Security Document that is a pledge of shares and such Foreign
Subsidiary is or becomes a Material Subsidiary, such Eurocurrency Borrower
shall pledge 100% of the capital stock of such Foreign Subsidiary to secure
its obligations under the relevant Eurocurrency Credit Agreement pursuant
to a pledge agreement in form and substance reasonably satisfactory to
Eurocurrency Administrative Agent;
(ix) Any of Holding and its Subsidiaries may sell, lease, consign,
transfer or otherwise dispose of Inventory to any Person in the ordinary
course of business;
(x) Any of Holding and its Subsidiaries may acquire additional
capital stock of an existing Subsidiary thereof from such Subsidiary;
PROVIDED that (i) if such Subsidiary is a Domestic Subsidiary and any
previously outstanding capital stock of such Subsidiary shall have been
pledged to Collateral Agent to secure the Obligations and the Eurocurrency
Guaranty Obligations, 100% of such additional capital stock shall be
similarly pledged to Collateral Agent, (ii) if such Subsidiary is a Foreign
Subsidiary and any previously outstanding capital stock of such Subsidiary
shall have been pledged to the Collateral Agent to secure the Obligations
and the Eurocurrency Guaranty Obligations, 65% of such additional stock
shall be similarly pledged to Collateral Agent, and (iii) if such
Subsidiary is a Foreign Subsidiary and any previously outstanding capital
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stock of such Subsidiary shall have been pledged to Eurocurrency
Administrative Agent to secure the obligations under the relevant
Eurocurrency Credit Agreement, 100% of such additional stock shall be
similarly pledged to the Eurocurrency Administrative Agent;
(xi) Investments permitted by subsection 6.3;
(xii) Any of Holding and its Subsidiaries may dispose of property
that is obsolete, worn out or otherwise no longer needed in its business,
including abandonment of trademarks, patents, copyrights and other
intellectual property no longer economically practicable to maintain;
(xiii) Any Subsidiary other than a Material Subsidiary may sell or
discount its accounts receivable to any bank or other financial institution
in the ordinary course of its business;
(xiv) Holding and its Subsidiaries may enter into, and perform,
any transactions permitted by subsection 6.10 or 6.13; and
(xv) Company or a Subsidiary thereof may engage in Asset Transfer
transactions; PROVIDED that (A) the aggregate net book value of assets
transferred in US/US Transfers, whether in one or more transactions or a
series of related transactions, since February 24, 1995 or the most recent
Recalculation Date, may not exceed $5,000,000, (B) the aggregate net book
value of the assets transferred in US/Foreign Transfers, whether in one or
more transactions or a series of related transactions or otherwise, since
February 24, 1995 may not exceed $7,500,000, (C) the aggregate net book
value of the assets transferred in UK/Swiss Transfers, whether in one or
more transactions or a series of related transactions, since February 24,
1995 may not exceed 25% of the Pounds Sterling equivalent net book value of
all assets of Company and its Subsidiaries located in the United Kingdom on
February 24, 1995, (D) the aggregate net book value of the assets
transferred in Swiss/UK Transfers, whether in one or more transactions or a
series of related transactions, since February 24, 1995 may not exceed 25%
of the Swiss Franc equivalent net book value of all assets of Company and
its Subsidiaries located in Switzerland on February 24, 1995, (E) the
aggregate net book value of the assets transferred in German Transfers,
whether in one or more transactions or a series of related transactions,
since February 24, 1995 may not exceed 25% of the German Xxxx equivalent
net book value of all assets of Company and its Subsidiaries located in
Germany on February 24, 1995 and (F) provided that with respect to Asset
Transfer transactions involving fixtures, machinery and equipment not
otherwise referred to in Clause (A), (B), (C), (D) or (E) above or not
otherwise expressly permitted by this subsection 6.7B, Company receives the
prior written consent of Requisite Lenders for any such Asset Transfer or
series of related Asset Transfers involving the net book value of assets in
excess of $1,000,000; PROVIDED, FURTHER, that the restrictions on Asset
Transfer transactions set forth in the foregoing PROVISO shall not apply to
any Asset
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Transfer transactions involving the Proposed Closed Facilities or
any Discontinued Operations.
Upon any disposition of property or assets in compliance with this
subsection 6.7, other than as the result of an Asset Transfer referred to in
subsection 6.7B(xv)(A), (C) or (D), Lenders will cause Collateral Agent to, and
Collateral Agent will, take such action as is necessary to evidence the release
of the Liens of Lenders, on such property or assets, including delivering to
Holding, Company or any Material Subsidiary, as appropriate, appropriate
releases and termination statements.
6.8 Sales and Leasebacks
Holding and its Subsidiaries will not directly or indirectly, become or
remain liable (unless indemnified against such liability by a Person other than
Holding or a Subsidiary thereof) as lessee or as guarantor or other surety with
respect to any lease, whether an Operating Lease or a Capital Lease, of any
property whether now owned or hereafter acquired, (i) that Holding or its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person, or (ii) that Holding or its Subsidiaries intends to use for
substantially the same purpose as any other property that has been or is to be
sold or transferred by Holding, Company or any Subsidiary to any Person in
connection with such lease (a "Sale/leaseback"); PROVIDED that Company and its
Subsidiaries may enter into sale/leaseback arrangements if permitted by
subsections 6.6A and 6.6B.
6.9 Sale or Discount of Receivables
Except as otherwise permitted by subsection 6.7B(xiii), Holding and its
Subsidiaries will not, directly or indirectly, sell or discount notes or
accounts receivable held by any such Person; provided that the foregoing shall
not be construed to restrict or prohibit compromises, settlements, waivers,
substitutions or other modifications or agreements with respect to such notes or
accounts receivable.
6.10 Transactions with Shareholders, Affiliates and Subsidiaries
Holding and its Subsidiaries will not, directly or indirectly, enter into
or permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or inventory or the rendering of any
service) with any holder of 5% or more of any class of equity securities of
Holding or Company or with any Affiliate of Holding or Company or of any such
holder or with any Subsidiary of Holding, as the case may be, on terms that are
less favorable to Holding or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate or Subsidiary; PROVIDED that the foregoing restriction shall not apply
to (i) Indebtedness and Investments permitted by subsections 6.1 or 6.3,
(ii) Contingent Obligations permitted by subsection 6.4, (iii) payments
permitted under subsection 6.5, (iv) transactions with Holding or a Subsidiary
thereof permitted by subsection 6.7, (v) any consulting, management, stock
option, stock appreciation right, or
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other employment, or deferred compensation agreement or arrangement with an
employee or director of Holding or any of its Subsidiaries that is approved
by a majority of the non-employee members of the board of directors of
Holding or its stockholders, (vi) transactions permitted by subsection 6.11,
(vii) the payment of transaction expenses in connection with this Agreement
and the transactions related hereto and thereto, (viii) the payment by any
Subsidiary of royalties for the use of products, trademarks of other
intellectual property rights, guaranty fees, and fees for technical
assistance, corporate administrative support and other services, (ix) the
payment by Holding or any Subsidiary of any amount pursuant to or in respect
of any bylaw or charter provision or agreement providing for indemnification
or reimbursement of any officer, director, employee or other agent of Holding
or any of its Subsidiaries, and (x) payments of customary director fees and
out-of-pocket expense reimbursement. For purposes of this subsection 6.10,
(A) any transaction shall be deemed to have satisfied the standard set forth
in the preceding sentence if (i) such transaction is approved by a majority
of the Disinterested Directors of the Board of Directors of Holding, the
Company or the applicable Subsidiary or (ii) a nationally recognized expert
with expertise in appraising the terms and conditions of the type of
transaction for which approval is required delivers to Holding, the Company
or the applicable Subsidiary (which shall promptly forward a copy to the
Agent) a written opinion stating that such transaction is fair to Holding,
the Company or the applicable Subsidiary from a financial point of view and
(B) "DISINTERESTED DIRECTOR" shall mean, with respect to any Person and
transaction, a member of the Board of Directors of such Person who does not
have any material direct or indirect financial interest in or with respect to
such transaction.
6.11 Disposal of Subsidiary Stock
Except as permitted by subsection 6.7 or as required by the Collateral
Documents and except for Permitted Encumbrances, neither Holding, Company nor
any Subsidiary will,
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity securities of (or
warrants, rights or options to acquire shares or other equity securities
of) any of its Subsidiaries, except to qualify directors if necessary or
appropriate under applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other securities of (or warrants, rights or options to acquire
shares or other securities of) such Subsidiary, except to Company, another
Subsidiary or to qualify directors if required by applicable law.
6.12 Conduct of Business
Holding and its Subsidiaries will not engage in any business other than the
business they were engaged in on February 24, 1995, or business similar or
related to such business, and other lines of business consented to by Agent, and
Requisite Lenders.
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6.13 Restructuring and Affiliate Reorganizations
Notwithstanding anything else contained herein to the contrary, Holding and
its Subsidiaries may merge, consolidate, or liquidate, wind-up and dissolve, or
convey, sell, exchange, assign, lease, sub-lease, transfer or otherwise dispose
of, in one transaction or series of related transactions including, without
limitation, but not with respect to capital stock of Holding, by way of dividend
or distribution on or with respect to its capital stock, all or any portion of
its business, property or assets or all or any portion of the stock or other
evidence of beneficial ownership of any Affiliate, whether now owned or
hereafter acquired, or acquire by purchase or otherwise all or substantially all
of the business, property or fixed assets of, or stock or other evidence of
beneficial ownership of, any Affiliate, and may engage in Asset Transfers, in
order to effect the restructuring or discontinuation of certain operations at
the Proposed Closed Facilities and the transfer or other disposition, in whole
or in part, of the property and assets relating thereto.
SECTION 7. GUARANTY OF HOLDING
Holding hereby consents to and confirms its guaranty of all Obligations.
In furtherance of the foregoing, Holding hereby agrees as follows:
7.1 Guaranty by Holding
As consideration for Lenders agreeing to enter into this Agreement and
extend the Revolving Credit Commitments hereunder, Holding hereby
unconditionally and irrevocably guaranties the due and punctual payment when due
(whether by required prepayment, declaration, demand or otherwise) (including
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)) of all
Obligations of Company (including, without limitation, interest which, but for
the filing of a petition in bankruptcy with respect to Company, would accrue on
such Obligations). For purposes of this Section 7, Holding is referred to as a
"Guarantor" and the obligations of Holding under this subsection 7.1 are
referred to as this "Guaranty".
Notwithstanding any other provision of this Section 7, this Guaranty and
all obligations of the Guarantor in respect hereof shall irrevocably terminate
and be null and void and of no further force or effect upon any merger or
consolidation of the Guarantor with or into Company, or any other merger,
consolidation, liquidation, winding-up or dissolution of the Guarantor as
permitted by subsection 6.7.
7.2 Terms of Guaranty
The Guarantor agrees that the Obligations of Company may be extended or
renewed, and the Revolving Credit Loans repaid and reborrowed in whole or in
part, without notice or further assent from it, and that it will remain bound
upon this Guaranty notwithstanding any extension,
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renewal or other alteration of any such Obligation or repayment and
reborrowing of the Revolving Credit Loans.
The Guarantor waives presentation of, demand of, payment from and protest
of any Obligation of Company and also waives notice of protest for nonpayment.
The obligations of the Guarantor under this Guaranty shall not be affected by,
and the Guarantor hereby waives its rights (to the extent permitted by law) in
connection with:
(a) the failure of Agent, Collateral Agent or any Lender to assert
any claim or demand or to enforce any right or remedy against Holding,
Company or any Material Domestic Subsidiary under the provisions of this
Agreement or any other agreement or otherwise,
(b) any extension or renewal of any provision thereof,
(c) any increase in the amount of the Obligations,
(d) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Agreement (subject to subsection 10.7) or any
instrument executed pursuant hereto,
(e) the release of any of the security held by Collateral Agent,
Agent or any Lender for the Obligations of Holding, Company or any Material
Domestic Subsidiary,
(f) the failure of Collateral Agent, Agent or any Lender to exercise
any right or remedy against any other guarantor of the Obligations of
Company,
(g) Collateral Agent, Agent or any Lender taking and holding security
or collateral for the payment of this Guaranty, any other guaranties of the
Obligations or other liabilities of Company and the Obligations guarantied
hereby, and exchanging, enforcing, waiving and releasing any such security
or collateral,
(h) Collateral Agent, Agent or any Lender applying any such security
or collateral and directing the order or manner of sale thereof as
Collateral Agent in its discretion may determine, or
(i) Collateral Agent, Agent or any Lender settling, releasing,
compromising, collecting or otherwise liquidating the Obligations and any
security or collateral therefor in any manner determined by Collateral
Agent, Agent, or such Lender.
The Guarantor further agrees that this Guaranty constitutes a guaranty of
payment when due and not of collection and waives any right to require that any
resort be had by Collateral Agent, Agent or any other Person to any of the
security held for payment of the Obligations of
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Company or to any balance of any deposit account or credit on the books of
Collateral Agent, Agent or any other Person in favor of Company or any other
Person.
The obligations of the Guarantor under this Guaranty shall not be subject
to any reduction, limitation, impairment or termination for any reason,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense or set-off,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Obligations, discharge of Company from the
Obligations in a bankruptcy or similar proceeding or otherwise. Without
limiting the generality of the foregoing, the obligations of the Guarantor under
this Guaranty shall not be discharged or impaired or otherwise affected by the
failure of Collateral Agent, Agent or any Lender to assert any claim or demand
or to enforce any remedy under this Agreement or any other agreement, by any
waiver or modification of any provision thereof, by any default, failure or
delay, willful or otherwise, in the performance of the Obligations of Company,
or by any other act or thing or omission or delay to do any other act or thing
that may or might in any manner or to any extent vary the risk of the Guarantor
or would otherwise operate as a discharge of the Guarantor as a matter of law or
equity.
Collateral Agent may, at its election, foreclose on any security held by
Collateral Agent by one or more judicial or nonjudicial sales, or exercise any
other right or remedy Collateral Agent may have against Holding, Company or any
Material Domestic Subsidiary or any security without affecting or impairing in
any way the liability of the Guarantor hereunder except to the extent the
Obligations have been paid. The Guarantor waives any defense arising out of
such election by Collateral Agent, even though such election operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of the Guarantor against Company or any security, so long as Collateral Agent
have acted in a commercially reasonable manner.
The Guarantor further agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Obligation of Company is
rescinded or must otherwise be restored by Agent, Collateral Agent or any Lender
upon the bankruptcy or reorganization of Company or otherwise.
The Guarantor further agrees, in furtherance of the foregoing and not in
limitation of any other right that Agent, Collateral Agent or any Lender may
have at law or in equity against the Guarantor by virtue hereof, upon the
failure of Company to pay any of its Obligations when and as the same shall
become due (whether by required prepayment, declaration, demand or otherwise),
the Guarantor will forthwith pay, or cause to be paid, in cash, to Agent an
amount equal to the sum of the unpaid principal amount of such Obligations,
accrued and unpaid interest on such Obligations and all other Obligations of
Company to Agent, Collateral Agent or such Lender.
So long as any of the Obligations of Company shall remain outstanding
hereunder, Guarantor hereby irrevocably waives any right of subrogation,
contribution, indemnity or
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otherwise against Company that may arise out of or be caused by this
Guaranty, all rights and/or claims against Company which may arise against
Company by reason of this Guaranty, any right to enforce any remedy that
Lenders now have or may hereafter have against Company and any benefit of,
and any right to participate in, any security now or hereafter held by
Lenders.
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon any failure of Company to pay
its Obligations when due (whether by required prepayment, declaration, demand or
otherwise) and consequent acceleration of the Obligations pursuant to Section 8,
each Lender, upon the consent of Agent and Requisite Lenders, is hereby
authorized by Guarantor at any time or from time to time, without notice to
Guarantor or to any other Person, any such notice being hereby expressly waived
to the extent permitted by applicable law, to set off and to appropriate and to
apply any and all deposits (general or special, including, not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time owing
by that Lender to or for the credit or the account of Guarantor against and on
account of the obligations and liabilities of Guarantor to that Lender under
this Guaranty, including but not limited to, all such obligations and
liabilities with respect to all claims of any nature or description arising out
of or connected with this Agreement, this Guaranty or the Letters of Credit or
any of the other Domestic Loan Documents, irrespective of whether or not Lenders
or Agent, with respect to any Obligation owed under the Letters of Credit or
this Agreement, shall have made any demand hereunder. Each Lender and Agent
agrees promptly to notify Guarantor after any such set-off and application is
made by such Lender or Agent.
Notwithstanding anything contained in this Section 7 to the contrary, this
Guaranty shall not be effective or in full force and effect until the Closing
Date.
SECTION 8. EVENTS OF DEFAULT
If on or after the Closing Date, any of the following conditions or events
("Events of Default") shall occur and be continuing:
8.1 Failure to Make Payments when Due
Failure to pay any installment of principal of any Revolving Credit Loan
made hereunder or any Eurocurrency Loan made under any Eurocurrency Credit
Agreement when due, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise; or failure to pay any interest on any Revolving Credit
Loan made hereunder or any Eurocurrency Loan made under any Eurocurrency Credit
Agreement or any other amount due under this Agreement (including, without
limitation, any payment with respect to reimbursement of amounts drawn under
Letters of Credit) or any Eurocurrency Credit Agreement within three (3) days
after the date due; or
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8.2 Default in Other Agreements
Failure of Holding, Company or any Material Subsidiary (excluding
Discontinued Operations) to pay when due (x) any principal or interest on any
Indebtedness (other than Indebtedness referred to in subsection 8.1) in an
individual principal amount of $1,000,000 or more or items of Indebtedness with
an aggregate principal amount of $1,000,000 or more, or (y) any Contingent
Obligation in an individual principal amount of $1,000,000 or more or Contingent
Obligations with an aggregate principal amount of $1,000,000 or more, in each
case beyond the end of any period prior to which the obligee is prohibited from
accelerating payment thereunder; or
Breach or default of Holding or Company or any Material Subsidiary
(excluding Discontinued Operations) with respect to any other material term of
(x) any evidence of any Indebtedness in an individual principal amount of
$1,000,000 or more or items of Indebtedness with an aggregate principal amount
of $1,000,000 or more or any Contingent Obligation in an individual principal
amount of $1,000,000 or more or Contingent Obligations with an aggregate
principal amount of $1,000,000 or more, or (y) any loan agreement, mortgage,
indenture or other agreement relating thereto, with respect to Indebtedness with
an aggregate principal amount of $1,000,000 or more, if, in the case of either
clause (x) or clause (y) of this paragraph, the effect of such failure, default
or breach is then to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation (or a trustee on behalf of such holder or
holders) then to cause, that Indebtedness or Contingent Obligation to become or
be declared due prior to its stated maturity (or the stated maturity of any
underlying obligation, as the case may be); or
8.3 Breach of Certain Covenants
Failure of Holding or Company to perform or comply with any term or
condition contained in subsections 2.5, 5.2 or 5.6 or Section 6 hereunder or to
the extent such subsections are incorporated into Section 4 of the Eurocurrency
Guaranties; or
8.4 Breach of Warranty
Any representation, warranty, certification or other statement made by
Holding, Company or any Material Subsidiary in any Loan Document or in any
statement or certificate at any time given by Holding, Company or any Material
Subsidiary in writing pursuant hereto or in connection herewith shall be false
in any material respect on the date as of which made; or
8.5 Other Defaults Under Agreement or Loan Documents
Holding, Company or any Material Subsidiary shall default in the
performance of or compliance with any term contained in this Agreement or the
other Loan Documents other than those referred to above in subsections 8.1, 8.3
or 8.4 and such default shall not have been remedied or waived within 30 days
after receipt by Holding or Company or any Material
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Subsidiary, as the case may be, of notice from Agent or Requisite Lenders
with respect to Holding or Company or any Material Subsidiary, of any such
default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Holding or Company or any of the Material
Subsidiaries (excluding Discontinued Operations) in an involuntary case
under the Bankruptcy Code or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, which decree or order is not
stayed; or any other similar relief shall be granted under any applicable
Federal or state law; or
(ii) an involuntary case is commenced against Holding, Company or any
Material Subsidiary (excluding Discontinued Operations) under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Holding or Company or
any Material Subsidiary (excluding Discontinued Operations), or over all or
a substantial part of its property, shall have been entered; or the
involuntary appointment of an interim receiver, trustee or other custodian
of Holding or Company or any Material Subsidiary (excluding Discontinued
Operations) for all or a substantial part of its property; or the issuance
of a warrant of attachment, execution or similar process against any
substantial part of the property of Holding or Company or any Material
Subsidiary (excluding Discontinued Operations) and the continuance of any
such event in clause (ii) for 30 days unless dismissed, bonded or
discharged: or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Holding or Company or any Material Subsidiary (excluding
Discontinued Operations) shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of
or taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Holding or any of its Material
Subsidiaries (excluding Discontinued Operations) shall make any assignment
for the benefit of creditors; or
(ii) the general inability or failure of Holding or Company or any
Material Subsidiary, or the admission by Holding or Company or any Material
Subsidiary in writing of its general inability, to pay its debts as such
debts become due; or the Board of Directors of Holding or Company or any
Material Subsidiary (or any committee thereof) adopts any resolution to
approve or otherwise authorizes any of the actions referred to in
clause (i) or this clause (ii); or
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8.8 Judgments and Attachments
Any money judgment, writ or warrant of attachment, or similar process
involving in any individual case an amount in excess of $1,000,000 (exclusive of
any amount which is fully and adequately covered by insurance and with respect
to which the insurer has not disputed in writing its coverage, it being
understood that a reservation of rights is not to be deemed a dispute) shall be
entered or filed against Holding or Company or any Material Subsidiary
(excluding Discontinued Operations) or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of 60 days or
in any event later than five days prior to the date of any proposed sale
thereunder; or
8.9 Dissolution
Except as permitted by Subsection 6.7, any order, judgment or decree shall
be entered against Holding or Company or any Material Subsidiary decreeing the
dissolution or split up of Holding or Company or any Material Subsidiary
(excluding Discontinued Operations) and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
8.10 ERISA
(i) Holding or Company or any of their respective ERISA Affiliates
fails to make full payment when due of all amounts which, under the
provisions of any Pension Plan or Section 412 of the Code, Holding or
Company or any of their respective ERISA Affiliates is required to pay as
contributions thereto;
(ii) Any accumulated funding deficiency occurs or exists, whether or
not waived, with respect to any Pension Plan;
(iii) The actuarial present value of all benefit liabilities under
all Pension Plans exceeds the fair market value of the assets of such
Pension Plans by an amount which would result in a material adverse effect
on the business or financial condition of Holding and its Subsidiaries,
taken as a whole, if all such Pension Plans were terminated;
(iv) (A) Any Pension Plan maintained by Holding or Company or any of
their respective ERISA Affiliates shall be terminated within the meaning of
Title IV of ERISA, or (B) a trustee shall be appointed by an appropriate
United States district court to administer any Pension Plan, or (C) the
PBGC (or any successor thereto) shall institute proceedings to terminate
any Pension Plan or to appoint a trustee to administer any Pension Plan, or
(D) Holding or Company or any of their respective ERISA Affiliates shall
withdraw (under Section 4063 of ERISA) from a Pension Plan, or (E) any
Termination Event resulting in any liability of Company or any ERISA
Affiliate of Company or (F) Holding or Company or any of their respective
ERISA Affiliates enters into any transaction which has as its principal
purpose the evasion of liability under subtitle D of Title IV of ERISA; or
(G) Company or any of its ERISA Affiliates engages
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in any transaction in connection with which Company or any of its ERISA
Affiliates is subject to either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal
Revenue Code;
which events set forth in clauses (i), (ii) or (iv) above would have either
individually or in the aggregate, a material adverse effect on the business or
financial condition of Holding and its Subsidiaries, taken as a whole; or
8.11 Withdrawal Liability Under Multiemployer Plan
Holding or Company or any of their respective ERISA Affiliates as employer
under a Multiemployer Plan shall have made a complete or partial withdrawal from
such Multiemployer Plan and such employer shall have incurred a withdrawal
liability that is not subject to contest in an amount which would have a
material adverse effect on the business or financial condition of Holding and
its Subsidiaries taken as a whole; or
8.12 Invalidity of Guaranties
(i) Any guaranty of the Obligations, including the Holding Guaranty,
for any reason, other than the satisfaction in full of all Obligations,
ceases to be in full force and effect or is declared to be null and void,
or any guarantor, including Holding, denies that it has any further
liability, including, without limitation, with respect to future advances
by Lenders, under any such guaranty or gives notice to such effect, except
as to any guarantor that is merged, consolidated, liquidated, wound up,
dissolved, sold or otherwise disposed of as permitted by subsection 6.7; or
(ii) Any guaranty of the obligations under the Eurocurrency Loan
Documents, for any reason, other than the satisfaction in full of such
obligations, ceases to be in full force and effect or is declared to be
null and void, or any guarantor denies that it has any further liability,
including, without limitation, with respect to future advances by
Eurocurrency Lenders, under any such guaranty or gives notice to such
effect, except as to any guarantor that is merged, consolidated,
liquidated, wound up, dissolved, sold or otherwise disposed of as permitted
by subsection 6.7; or
8.13 Change of Control
(A) Except as otherwise permitted by subsection 6.7B(i), Holding shall
cease to own and control at least 100% of the common stock and 100% of the
voting power of Company entitled to vote for an election of the board of
directors of Company; or (B) individuals who on February 24, 1995 were members
of the board of directors of Holding (together with any new directors whose
election to such board of directors or whose nomination for election by the
stockholders of Holding was approved by a vote of a majority of the directors
then still in office who were either directors on February 24, 1995 or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of such board of
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directors then in office; or (C) a "person" or "group" (within the meaning of
Section 13(d) of the Exchange Act), becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of more than 30% of the total
issued and outstanding common stock of Holding; or
8.14 Impairment of Collateral
(A) A judgment creditor of Holding or Company or any Material Subsidiary
shall obtain possession of any material portion of the Collateral by any means,
including, without limitation, levy, distraint, replevin or self-help, (B) any
substantial portion of the Collateral shall be taken by eminent domain or
condemnation, (C) any of the Collateral Documents or the Eurocurrency Security
Documents shall cease for any reason to be in full force and effect, or any
party thereto shall purport in writing to disavow its obligations thereunder or
shall declare in writing that it does not have any further obligations
thereunder or shall contest the validity or enforceability thereof or Lenders
shall cease to have a valid and perfected first priority security interest (or a
comparable interest under any law governing any Eurocurrency Security Document
or Company Pledge Agreement with respect to the capital stock of any Foreign
Subsidiary) to the extent provided for therein in any material Collateral
covered thereby except as to any Collateral Document or the Eurocurrency
Security Document that is a guaranty of a guarantor that is merged,
consolidated, liquidated, wound up, dissolved, sold or otherwise disposed of as
permitted by subsection 6.7, and except as to any Collateral that is conveyed,
sold, exchanged, leased, subleased, transferred or otherwise disposed of as
permitted by this Agreement or the Collateral Document or the Eurocurrency
Security Document relating thereto, or (D) Lenders' or Eurocurrency Lenders'
security interests or liens on any material portion of the Collateral under the
Collateral Documents or the Eurocurrency Security Documents, as appropriate,
shall become otherwise impaired or unenforceable, except as to any Collateral
that is conveyed, sold, exchanged, leased, subleased, transferred or otherwise
disposed of as permitted by this Agreement or the Collateral Document or the
Eurocurrency Security Document relating thereto, and except in each case under
the foregoing clauses (A) through (D) as to any Collateral consisting of deposit
accounts; or
8.15 Eurocurrency Credit Agreement
An Event of Default shall occur and be continuing under any Eurocurrency
Credit Agreement; or
8.16 ERISA Lien
Holding or Company or any of their respective ERISA Affiliates shall fail
to make required contributions when due under Section 412 of the Internal
Revenue Code which results in the imposition of a Lien under Section 412 of the
Internal Revenue Code to secure such unpaid contributions in an aggregate amount
in excess of $1,000,000; or
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8.17 Breach of Certain Original Credit Agreement Covenants
Failure of Holding and its Subsidiaries to comply with the covenants set
forth in Section 6 of the Original Credit Agreement for the fiscal quarter of
Holding and its Subsidiaries ended September 27, 1996, as such covenants existed
as of September 27, 1996;
THEN (i) upon the occurrence of any Event of Default described in the foregoing
subsections 8.6 or 8.7(i) with respect to Holding, Company or any Material
Domestic Subsidiary, each of (a) the unpaid principal amount of and accrued
interest on the Revolving Credit Loans, (b) an amount equal to the maximum
amount that may at any time be drawn under all Letters of Credit then
outstanding (whether or not any beneficiary under any Letter of Credit shall
have presented or be entitled to present, the drafts and other documents
required to draw under the Letter of Credit), and (c) all other Obligations,
shall automatically become immediately due and payable, without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by Holding and its Subsidiaries, and the obligation of each
Lender to make any Revolving Credit Loan or to issue any Letter of Credit shall
thereupon terminate and (ii) upon the occurrence and during the continuance of
any other Event of Default (including any Event of Default described in the
foregoing subsections 8.6 or 8.7(i) with respect to any Material Foreign
Subsidiary), Requisite Lenders may, by written notice to Company, declare all or
any portion of the amounts described in clause (a) through (c) above to be, and
the same shall forthwith become, immediately due and payable, together with
accrued interest thereon, and the obligation of each Lender to make any
Revolving Credit Loan or to issue any Letter of Credit shall thereupon
terminate. So long as any Letter of Credit shall remain outstanding, any
amounts described in clause (b) above with respect to Letters of Credit, when
received by the Issuing Lender, shall be held by the Issuing Lender, pursuant to
such documentation as the Issuing Lender shall request, as cash collateral for
the obligation of Company to reimburse the Issuing Lender in the event of any
drawing under such Letters of Credit, and so much of such funds shall at all
times remain on deposit as cash collateral as aforesaid as shall equal the
maximum amount available at any time for drawing under all Letters of Credit
(the "Maximum Available Amount"); PROVIDED that in the event of cancellation or
expiration of any Letter of Credit or any reduction in the Maximum Available
Amount, the Issuing Lender shall apply the difference between the cash
collateral held by the Issuing Lender immediately prior to such cancellation,
expiration or reduction and the Maximum Available Amount immediately after such
cancellation, expiration or reduction first to the payment of any outstanding
Obligations, and SECOND to the payment to whomsoever shall be lawfully entitled
to receive such funds.
Notwithstanding anything contained in the foregoing paragraph, if at any
time within 60 days after acceleration of the maturity of any Revolving Credit
Loan, Holding or Company shall pay all arrears of interest and all payments on
account of the principal which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Potential Events of Default (other than non-payment of principal of
and accrued interest on the
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Revolving Credit Loans and payments of amounts referred to clauses (a), (b),
and (c) above, in each case which is due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to subsection 10.7, then
Requisite Lenders, by written notice to Company, may at their option rescind
and annul the acceleration and its consequences and return to Company any
amounts held pursuant to the cash collateral arrangement referred to above as
cash collateral in respect of the amounts described in clause (b) above; but
such action shall not affect any subsequent Event of Default or Potential
Event of Default or impair any right consequent thereon.
SECTION 9. AGENT
9.1 Appointment
NationsBank is hereby appointed sole administrative Agent hereunder by each
Lender and notwithstanding anything contained herein to the contrary, any Lender
designated as "Co-Agent" or "Syndication Agent" shall not have any authority to
act as Agent hereunder or in any other agency capacity. Each Lender hereby
authorizes Agent to act hereunder and under the other instruments and agreements
referred to herein (including, without limitation, the Collateral Documents to
which Agent is party as Collateral Agent) as its agent hereunder and thereunder.
Agent agrees to act as such upon the express conditions contained in this
Section 9 and in such Collateral Documents. The provisions of this Section 9
are solely for the benefit of Agent and Lenders, and neither Holding nor any of
its Subsidiaries shall have any rights as a third party beneficiary of any of
the provisions of this Section 9, except with respect to subsections 9.2D, 9.5,
9.6 and 9.7, and provided that Holding and its Subsidiaries shall be entitled to
rely on the appointment of any Agent or Collateral Agent pursuant hereto and on
the exercise of powers and other actions by such Agent or Collateral Agent
hereunder and under the other instruments and agreements referred to herein
(including, without limitation, such Collateral Documents). In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Lenders and does not assume and shall not be deemed to have assumed any
fiduciary or similar obligation towards or relationship of agency or trust with
or for Holding or any of its Subsidiaries.
9.2 Powers; General Immunity
A. DUTIES SPECIFIED. Each Lender irrevocably authorizes Agent to take
such action on such Lender's behalf and to exercise such powers hereunder and
under the other instruments and agreements referred to herein (including,
without limitation, the Collateral Documents) as are specifically delegated to
Agent, by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the
Collateral Documents, and it may perform such duties by or through its agents or
employees. The duties of Agent shall be mechanical and administrative in
nature; Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender; and nothing in this Agreement, expressed
or implied, is
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intended to or shall be so construed as to impose upon Agent any obligations
in respect of this Agreement or the other instruments and agreements referred
to herein except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. Agent shall not be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement, any other
Domestic Loan Document or Letters of Credit, or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by Agent to Lenders or by or on behalf of Holding or any of
its Subsidiaries to Agent or any Lender or be required to ascertain or inquire
as to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Revolving Credit Loans or the Letters of Credit or of the
existence or possible existence of any Event of Default or Potential Event of
Default. Anything contained in this Agreement to the contrary notwithstanding,
Agent shall not have any liability arising from confirmations of the amount of
outstanding Revolving Credit Loans.
C. EXCULPATORY PROVISIONS. Neither Agent nor any of its officers,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted hereunder or in connection herewith (including, without limitation,
any act or omission under the Collateral Documents) unless caused by its or
their gross negligence or willful misconduct. If Agent shall request
instructions from Lenders with respect to any act or action (including the
failure to take an action) in connection with this Agreement, Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders, or unless Agent shall
be required by the terms of this Agreement or any Collateral Document so to act
or take such action. Without prejudice to the generality of the foregoing,
(i) Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Holding or any of its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against Agent
as a result of Agent acting or (where so instructed) refraining from acting
under this Agreement or the other instruments and agreements referred to herein
in accordance with the instructions of Requisite Lenders. Agent shall be
entitled to refrain from exercising any power, discretion or authority vested in
it under this Agreement or the other instruments and agreements referred to
herein unless and until it has obtained the instructions of Requisite Lenders.
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, Agent in its individual capacity as a Lender hereunder. With
respect to its participation in the Revolving Credit Loans, Agent shall have the
same rights and powers hereunder as any other Lender and may exercise the same
as though it were not performing the duties and functions
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delegated to it hereunder and the term "Lender" or any similar term used in
any Loan Document shall, unless the context clearly otherwise indicates,
include Agent in its individual capacity. Each of Agent and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
banking, trust, financial advisory or other business with Holding or any
Affiliate of Holding as if it were not performing the duties specified
herein, and may accept fees and other consideration from Holding or any of
its Subsidiaries for services in connection with this Agreement and otherwise
without having to account for the same to Lenders, except as required by
subsection 2.3.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holding and its
Subsidiaries in connection with the making of the Revolving Credit Loans
hereunder and has made and shall continue to make its own appraisal of the
creditworthiness of Holding and its Subsidiaries. Agent shall not have any duty
or responsibility either initially or on a continuing basis to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto whether coming
into their possession before the making of the Revolving Credit Loans or any
time or times thereafter, and Agent shall not have any responsibility with
respect to the accuracy of or the completeness of the information provided to
Lenders.
9.4 Right to Indemnity
Each Lender, proportionately to its Pro Rata Share of the Revolving Credit
Commitments, severally agrees to indemnify Agent to the extent Agent shall not
have been reimbursed by Holding or its Subsidiaries, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including, without limitation, disbursements and
reasonable counsel fees) or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against Agent in performing its
duties hereunder in its capacity as Agent, in any way relating to or arising out
of this Agreement; PROVIDED that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's gross negligence
or willful misconduct. If any indemnity furnished to Agent for any purpose
shall, in the opinion of Agent, be insufficient or become impaired, Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
9.5 Registered Persons Treated as Owner
Agent and Holding and its Subsidiaries may deem and treat the Persons
listed as Lenders in the Register as the owner of the corresponding Revolving
Credit Loan listed therein for all purposes hereof unless and until an
assignment is made pursuant to subsection 10.2 and a written
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notice of the assignment or transfer thereof shall have been filed with
Agent, and recorded in the Register, and a copy thereof shall have been
delivered to Holding. Any request, authority or consent of any person or
entity who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, transferee or assignee of the corresponding
Revolving Credit Loan.
9.6 Collateral Documents; Appointment of Collateral Agent; Successor
Collateral Agent
Each Lender and Agent hereby appoints NationsBank as Collateral Agent, and
authorizes Collateral Agent, as such agent, to act as such under the Collateral
Documents to which Collateral Agent is party or which are entered into in favor
of Collateral Agent. Each Lender and Agent hereby further authorizes Collateral
Agent to enter into such Collateral Documents on behalf of and for the benefit
of Lenders and Agent and agrees to be bound by the terms of such Collateral
Documents; PROVIDED that, subject to the third sentence of this subsection 9.6,
Collateral Agent shall not enter into or consent to any amendment, modification,
termination or waiver (x) of any Collateral Document that releases any guarantor
or Collateral not otherwise permitted under this Agreement or such Collateral
Document, without the prior written consent of Lenders required by the fifth
sentence of subsection 10.7, and (y) of any other provision contained in any
Collateral Document without the prior written consent of Agent and Requisite
Lenders. Each Lender and Agent agrees that no Lender or Agent shall have any
right individually to realize upon the security granted by such Collateral
Documents, it being understood and agreed that such rights and remedies may be
exercised by Collateral Agent for the benefit of Lenders and Agent in accordance
with the terms of such agreements. Each Lender and Agent hereby authorize
Collateral Agent, and Collateral Agent hereby agrees, to release Collateral as
permitted or required under this Agreement or such Collateral Documents and to
execute and deliver any certificate, agreement, instrument or other document
necessary or appropriate to effect or evidence such release of Collateral, and
each Lender, Agent and Collateral Agent agree that a certificate executed, by
Collateral Agent evidencing such release of Collateral shall be conclusive
evidence of such release as to any third party. Collateral Agent shall at all
times be the same Person that is Agent. Written notice of resignation by Agent
pursuant to subsection 9.7 shall also constitute notice of resignation as
Collateral Agent; removal of Agent pursuant to subsection 9.7 shall also
constitute removal as Collateral Agent; and appointment of a successor Agent
pursuant to subsection 9.7 shall also constitute appointment of a successor
Collateral Agent.
9.7 Successor Agents
Agent may resign at any time by giving written notice thereof to Lenders
and Company, and Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and Agent
and signed by Requisite Lenders. Upon any such notice of resignation or any
such removal, Requisite Lenders shall have the right, upon five days notice to
Company, to appoint a successor Agent. If no successor Agent shall have been so
appointed by Requisite Lenders, and shall have accepted such appointment, within
30
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days after the retiring Agent's giving of notice of resignation or Requisite
Lenders' removal of the retiring Agent, then upon five days' notice to Company
the retiring Agent may, on behalf of Lenders, appoint a successor Agent which
shall be a Lender, or a commercial bank organized under the laws of the United
States of America or of any State thereof, or any Affiliate of such bank, having
a combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as an Agent hereunder by a successor Agent, that successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Agent, and the retiring or
removed Agent shall be discharged from its duties and obligations as Agent under
this Agreement. After any retiring or removed Agent's resignation or removal
hereunder as Agent, the provisions of this Section 9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement. The resignation by Collateral Agent, removal of Collateral
Agent and appointment of successor Collateral Agent shall be as provided in the
final two sentences of subsection 9.6.
SECTION 10. MISCELLANEOUS
10.1 Representation of Lenders
Each Lender hereby represents that (a) it is a commercial lender or
financial institution, (b) it will make any Revolving Credit Loan for its own
account, (c) subject to subsection 10.2, the disposition of evidence of
Indebtedness held by that Lender shall at all times be within its exclusive
control, and (d) its participation as a Lender hereunder and extension of credit
in respect hereof will not require registration or qualification under any
securities laws.
10.2 Assignments and Participations in Revolving Credit Loans; Letters of
Credit
Notwithstanding the provisions of subsection 10.1, each Lender may assign
its rights and obligations under this Agreement and further may assign, or sell
participations in, all or any part of any Revolving Credit Loan or Revolving
Credit Loans made by it or its Commitments or any other interest herein or in
its participation in the Letters of Credit to another bank or other entity;
PROVIDED that (i) no participation or assignment shall, without the consent of
Company, require Company to file a registration statement or similar document
with the Securities and Exchange Commission or any other regulatory authority or
apply to qualify the Revolving Credit Loans under the blue sky laws of any
state; (ii) in the case of an assignment, such assignment shall (a) be assigned
to (x) an Affiliate of such Lender or another Lender with the giving of notice
to Company and Agent (EXCEPT that if any such assignment, is made without the
consent of Company, Company shall not be required to pay any amounts to such
assignee pursuant to subsections 2.6, 2.7, 2.8 or 2.9 hereof in excess of the
amounts that it would have been required to pay thereunder to the assigning
Lender), or (y) a bank or other financial institution approved by Agent and
Company, which such approvals shall not be unreasonably withheld), and (b) be
assigned pursuant to an assignment agreement substantially in the form of
EXHIBIT VII annexed hereto, (c) if made to a Person other than a Lender, be in
an amount (x) such that the Dollar Equivalent of the assigning Lender's
Revolving Credit Commitment and the commitments under
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the Eurocurrency Credit Agreements being assigned is in an aggregate minimum
amount of $5,000,000 or (y) equal to 100% of the assigning Lender's Revolving
Credit Commitment and commitments under the Eurocurrency Credit Agreements if
the Dollar Equivalent of such Lender's Revolving Credit Commitment and
commitments under the Eurocurrency Credit Agreements is less than $5,000,000
in the aggregate, and (d) be on a pro rata basis with the Eurocurrency Credit
Agreements so that the Pro Rata Share of such assignee under this Agreement
shall be equal to the Proportion (as defined in the Eurocurrency Credit
Agreements) of such assignee under the Eurocurrency Credit Agreements other
than the Eurocurrency Credit Agreement referred to in clause (iii) of the
definition of Eurocurrency Credit Agreements, PROVIDED that notwithstanding
anything herein to the contrary, an assignment may be on a non-pro rata basis
with the Eurocurrency Credit Agreements with the consent of Agent and
Company, which consent by Company shall not be unreasonably withheld; and
(iii) in the case of a participation, (A) the Lender so participating out its
Revolving Credit Loan shall remain a Lender hereunder and the Person
acquiring such participation shall not become a Lender hereunder, (B) such
Lender's obligations hereunder shall remain unchanged and it shall remain
solely responsible for the performance thereof, (C) all loan parties and
Agent shall continue to deal solely with such Lender in connection with the
relevant Revolving Credit Loan and other related transactions contemplated
hereby, (D) such Lender shall be solely responsible for any withholding taxes
or any filing or reporting requirements relating to such participation and
shall hold harmless Holding, Company, each Subsidiary and Agent and their
respective successors, permitted assigns, employees, officers, directors and
representatives against the same, and (E) the holder of any such
participation, other than an Affiliate of such Lender, shall not be entitled
to require such Lender to take or omit to take any action hereunder except
action directly affecting the extension of the final maturity of the
principal amount of a Revolving Credit Loan or Revolving Credit Commitment or
a reduction of the principal amount of or the decrease in the rate of
interest payable on the Revolving Credit Loans or any fees related thereto.
Each Lender making an assignment described in clause (i)(a)(y) of the first
proviso in the immediately preceding sentence shall pay to Agent a fee in the
amount of $2,500. In the case of an assignment authorized under this
subsection 10.2, the assignee shall have, to the extent of such assignment,
the same rights, benefits and obligations as it would if it were a Lender
hereunder, including, without limitation, the right to be considered a Lender
for purposes of the definition of the "Requisite Lenders" and the obligation
to fund Revolving Credit Loans directly to Agent pursuant to subsection 2.1C,
and the assigning Lender shall be relieved of its obligations hereunder with
respect to its Revolving Credit Commitment to the extent assigned. Company
hereby acknowledges and agrees that such assignee of any Lender shall for all
purposes hereunder be considered to be such a "Lender". In the event of an
assignment hereunder the Revolving Credit Commitments hereunder shall be
modified to reflect the Revolving Credit Commitment of such assignee.
Assignments pursuant to this subsection 10.2 shall not be deemed effective
hereunder until (i) Agent shall have been paid any fee required pursuant to
this subsection in relation to such assignment and (ii) if any such
assignment occurs while any Revolving Credit Loan is outstanding, such
assignment shall have been recorded by Agent in the Register as provided in
subsection 2.1D. Agent shall no later than five Business Days following
receipt of notice thereof, record assignments pursuant to this subsection
10.2 in the Register. Each Lender may furnish any information concerning
Holding or any of its
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Subsidiaries in the possession of that Lender from time to time to assignees
and participants (including prospective assignees and participants), subject
to subsection 10.17.
Notwithstanding the preceding provisions of this subsection 10.2, any
Lender may pledge or assign all or any portion of its rights under this
Agreement to a Federal Reserve Bank as security for borrowings therefrom;
PROVIDED no such pledge or assignment shall release any such Lender from its
obligations hereunder.
Upon its receipt of an assignment agreement substantially in the form of
EXHIBIT VII annexed hereto executed by Lender making the assignment and the
assignee and the Revolving Credit Notes subject to such assignment, Company
shall, within three Business Days after its receipt of such assignment
agreement, execute and deliver to Agent in exchange for the surrendered
Revolving Credit Note a new Revolving Credit Note payable to the order of such
assignee in amount equal to the Revolving Credit Commitment assigned to such
assignee pursuant to such assignment agreement and a new Revolving Credit Note
to the assigning Lender in an amount equal to the portion of the Revolving
Credit Commitment retained by such assigning Lender hereunder, if any. Such new
Revolving Credit Notes shall be (i) in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Revolving Credit Note,
(ii) dated the effective date of such assignment agreement and (iii) otherwise
be in substantially the form of EXHIBIT XV annexed hereto.
10.3 Expenses
Whether or not the transactions contemplated hereby shall be consummated,
Holding and Company jointly and severally agree to pay promptly (i) all
reasonable costs of furnishing all opinions by counsel for Holding and its
Subsidiaries (including, without limitation, any opinions reasonably requested
by Agent as to any legal matters arising hereunder), and of Holding's and its
Subsidiaries' performance of and compliance with all agreements and conditions
contained herein on its part to be performed or complied with, (ii) the
reasonable fees, expenses and disbursements of counsel to Agent in connection
with the negotiation, preparation, execution and administration of this
Agreement, the other Domestic Loan Documents, the Revolving Credit Loans
hereunder, and any amendments and waivers hereto, (iii) all the actual costs and
expenses of creating and perfecting Liens in favor of Lenders contemplated by
this Agreement and the other Domestic Loan Documents, including filing and
recording fees and expenses, recording or similar taxes, reasonable fees and
expenses of counsel for providing such opinions as Agent may reasonably request
and reasonable fees and expenses of legal counsel to Agent, (iv) all reasonable
accountable out-of-pocket expenses (including travel and due diligence expenses)
incurred by Agent in connection with the negotiation and closing of this
Agreement, (v) all other actual and reasonable accountable out-of-pocket
expenses incurred by Agent in connection with the making of the Revolving Credit
Loans hereunder and the issuance of the Letters of Credit and other extensions
of credit hereunder, and (vi) all costs and expenses (including reasonable
attorneys' fees and costs of settlement) incurred by Agent and Lenders in
connection with any work-out or collection of any portion of the Obligations or
the enforcement of any Loan Documents.
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10.4 INDEMNITY
IN ADDITION TO THE PAYMENT OF EXPENSES PURSUANT TO SUBSECTION 10.3, WHETHER
OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE CONSUMMATED, HOLDING AND
COMPANY JOINTLY AND SEVERALLY AGREE TO INDEMNIFY, PAY AND HOLD AGENT AND
LENDERS, AND THE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND AFFILIATES OF
LENDERS (COLLECTIVELY CALLED THE "INDEMNITEES") HARMLESS FROM AND AGAINST, ANY
AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, CLAIMS, AND OUT-OF-POCKET COSTS, EXPENSES AND DISBURSEMENTS OF
ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE REASONABLE
FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES) IN CONNECTION WITH ANY
INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING COMMENCED OR THREATENED,
WHETHER OR NOT SUCH INDEMNITEE SHALL BE DESIGNATED A PARTY THERETO, THAT MAY BE
IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THAT INDEMNITEE, IN ANY MANNER
RELATING TO OR ARISING OUT OF, THIS AGREEMENT OR THE OTHER DOMESTIC LOAN
DOCUMENTS, LENDERS' AGREEMENT TO MAKE THE REVOLVING CREDIT LOANS AND OTHER
EXTENSIONS OF CREDIT AND LENDERS' AGREEMENTS TO PURCHASE PARTICIPATIONS THEREIN
AS PROVIDED HEREIN, OR THE USE OR INTENDED USE OF THE PROCEEDS OF ANY OF THE
REVOLVING CREDIT LOANS OR OTHER EXTENSIONS OF CREDIT HEREUNDER OR IN ANY WAY
RELATING TO OR RESULTING FROM THE ACTIONS OR ASSETS OF HOLDING, COMPANY OR ANY
OF THEIR RESPECTIVE SUBSIDIARIES (THE "INDEMNIFIED LIABILITIES"); PROVIDED THAT
NEITHER HOLDING NOR COMPANY SHALL HAVE ANY OBLIGATION HEREUNDER TO ANY LENDER OR
ANY OF ITS RELATED INDEMNITEES WITH RESPECT TO INDEMNIFIED LIABILITIES ARISING
FROM THE FRAUD, GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR WILLFUL BREACH OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OF SUCH LENDER OR ANY OF ITS RELATED
INDEMNITEES, ALL AS DETERMINED BY A FINAL JUDGMENT OF A COURT OF COMPETENT
JURISDICTION (OR A SETTLEMENT TANTAMOUNT TO SUCH A FINAL JUDGMENT). TO THE
EXTENT THAT THE UNDERTAKING TO INDEMNIFY, PAY AND HOLD HARMLESS SET FORTH IN THE
IMMEDIATELY PRECEDING SENTENCE MAY BE UNENFORCEABLE BECAUSE IT IS VIOLATIVE OF
ANY LAW OR PUBLIC POLICY, HOLDING AND COMPANY SHALL EACH CONTRIBUTE THE MAXIMUM
PORTION THAT IT IS PERMITTED TO PAY AND SATISFY UNDER APPLICABLE LAW, TO THE
PAYMENT AND SATISFACTION OF ALL INDEMNIFIED LIABILITIES INCURRED BY THE
INDEMNITEES OR ANY OF THEM.
10.5 Set Off
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence of any Event of
Default and consequent acceleration of the Obligations pursuant to Section 8,
each Lender, upon the consent of Agent and Requisite Lenders, is hereby
authorized by Company at any time or from time to time, without notice to
Company, or to any other Person, any such notice being hereby expressly waived
to the extent permitted by applicable law, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Company, against and
on account of the obligations and liabilities of Company to that Lender under
this Agreement or with respect to the Letters of Credit, including, but not
limited to, all such obligations and liabilities with respect to all claims of
any nature or description arising out
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of or connected with this Agreement or with respect to the Letters of Credit
or any other Loan Document, irrespective of whether or not that Lender shall
have made any demand hereunder and although said obligations and liabilities,
or any of them, may be contingent or unmatured. Each Lender and Agent agrees
promptly to notify Holding and Company after any such set-off and application
is made by such Lender or Agent.
10.6 Ratable Sharing
Lenders each agree among themselves that if any of them shall, through the
exercise of any right of counterclaim, set-off, banker's lien or otherwise or as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code, receive payment or reduction of a proportion of the aggregate amount of
principal and interest then due with respect to the Revolving Credit Loans and
the amounts payable in respect of the Letters of Credit held by that Lender, or
amounts due to that Lender in respect of facility fees or commitment fees
hereunder (collectively, the "Aggregate Amounts Due" to such Lender), which is
greater than the proportion received by any other Lender in respect to the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (y) notify each other Lender and Agent of
such receipt and (z) purchase participations (which it shall be deemed to have
done simultaneously upon the receipt of such payment) in the Aggregate Amounts
Due to the other Lenders so that all such recoveries of Aggregate Amounts Due
shall be shared by Lenders in proportion to the Aggregate Amounts Due them;
PROVIDED that if all or part of such proportionately greater payment received by
such purchasing Lender is thereafter recovered from such Lender, those purchases
shall be rescinded and the purchase prices paid for such participations shall be
returned to that Lender to the extent of such recovery, but without interest.
Each of Holding and Company expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and all
rights of banker's lien, set-off or counterclaim with respect to any and all
monies owing by Holding or Company to that holder.
10.7 Amendments and Waivers
To the extent not otherwise expressly provided, no amendment, modification,
termination or waiver of any provision of this Agreement, or consent to any
departure by Holding or any of its Subsidiaries therefrom, shall in any event be
effective without the written concurrence of Requisite Lenders, Holding and
Company; except that any amendment, modification, termination, or waiver that
(i) changes the amount of the Revolving Credit Commitments or the principal
amount of the Revolving Credit Loans or extends the scheduled maturity thereof;
(ii) changes any Lender's Pro Rata Share, the definition of "Requisite Lenders",
or any provision of this Agreement expressly requiring the approval or
concurrence of all Lenders; (iii) extends the dates on which interest is or fees
are payable hereunder, or the maximum duration of Interest Periods; (iv) changes
the provisions contained in subsections 8.1 or 10.7; or (v) reduces any interest
rates payable on the Revolving Credit Loans or any fees (other than
administrative fees) payable hereunder, each shall be effective only if
evidenced by a writing signed by or on behalf of all Lenders, Agent, Holding and
Company; PROVIDED, HOWEVER, that
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(A) SCHEDULE 1.1 annexed hereto and the Revolving Credit Commitments and Pro
Rata Shares set forth therein shall be amended from time to time to give
effect to the Revolving Credit Commitment and Pro Rata Share of each new
Lender that becomes a party to this Agreement at the time such Lender becomes
a Lender and (B) any amendment, modification or waiver that changes any
administrative fees, or the times at which such fees are payable, hereunder
shall be effective only if evidenced by a writing signed by or on behalf of
Holding, Company and each Lender affected thereby. For the purposes of
subsection 2.2E, no waiver of any Event of Default and no amendment to this
Agreement shall operate as a cure of any Event of Default unless stated in
writing in such waiver or amendment. To the extent not otherwise expressly
provided, any amendment, modification, termination or waiver of any of the
provisions contained in Section 3 shall be effective only if evidenced by a
writing signed by or on behalf of Agent, Requisite Lenders, Holding and
Company. No amendment, modification, termination or waiver of any provision
of Section 9 hereof shall be effective without the written concurrence of
Agent, Requisite Lenders, Holding and Company. No amendment, modification,
termination, or waiver of any Loan Document that releases any guarantor or
releases any Collateral under a Loan Document not otherwise permitted under
this Agreement or such Loan Document (including but not limited to, as
permitted pursuant to subsection 6.7 or 9.6 of this Agreement) shall be
effective unless evidenced by a writing signed by or on behalf of Lenders
having 80% or more of the combined aggregate amount of the Revolving Credit
Commitments or, in the case of the Revolving Credit Commitments have been
terminated, the outstanding principal amount of the Revolving Credit Loans,
if any, made thereunder. Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Holding or any of its Subsidiaries shall
entitle Holding and Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this subsection 10.7 shall be
binding upon Holding and Company, and each of their respective Subsidiaries.
10.8 Notices
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States mail or
courier service and shall be deemed to have been given when delivered in person,
on receipt of telecopy or telex or four Business Days after depositing it in the
United States mail, registered or certified, with postage prepaid and properly
addressed; PROVIDED that notices to Agent shall not be effective until received.
For the purposes hereof, the addresses of the parties hereto (until notice of a
change thereof is delivered as provided in this subsection 10.8) shall be as set
forth under each party's name on the signature pages hereof.
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10.9 Survival of Warranties and Certain Agreements
A. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, and the making of the
Revolving Credit Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements set forth in subsections 2.6E, 2.6H, 2.7, 2.8E, 2.8G,
2.8H, 2.9, 10.3, 10.4 and 10.5, the agreements of Holding set forth in Section 7
(to the extent set forth therein) and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.5, 10.6 and 10.17 shall survive the payment of the
Revolving Credit Loans and the reimbursement obligations under the Letters of
Credit and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative
No failure or delay on the part of any party hereto in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
10.11 Severability
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.12 Obligations Several; Independent Nature of Lenders' Rights
The obligation of each Lender hereunder is several, and no Lender shall be
responsible for the obligation or commitment of any other Lender hereunder.
Nothing contained in this Agreement and no action taken by Lenders pursuant
hereto shall be deemed to constitute Lenders to be a partnership, an
association, a joint venture or any other kind of entity. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
10.13 Headings
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be
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given any substantive effect.
10.14 Applicable Law
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
10.15 Successors and Assigns
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of Lenders. The terms and
provisions of this Agreement shall inure to the benefit of any permitted
assignee of the Revolving Credit Loans, and in the event of such assignment, the
rights and privileges herein conferred upon Lenders shall automatically extend
to and be vested in such assignee, all subject to the terms and conditions
hereof. Neither Holding's or any of its Subsidiaries' rights nor any interest
therein hereunder may be assigned without the written consent of all Lenders.
Lenders rights of assignment are subject to subsection 10.2.
10.16 Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY OF THE PARTIES HERETO ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OBLIGATION MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN DALLAS, TEXAS AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT EACH OF THE PARTIES HERETO ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT OR SUCH OBLIGATION; PROVIDED
THAT SUCH PARTIES RETAIN ANY RIGHTS TO APPEAL SUCH JUDGMENT. ALL PARTIES TO
THIS AGREEMENT IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OBLIGATION. Each
of Holding and Company designates and appoints Nu-kote International, Inc. with
offices at 00000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, and such other
Persons as may hereafter be selected by Holding and Company irrevocably agreeing
in writing to so serve, as its agent to receive on its behalf service of all
process in any such proceedings in any such court, such service being hereby
acknowledged by Holding and Company to be effective and binding service in every
respect. A copy of any such process so served shall be mailed by registered
mail to Holding and Company at its address provided in the applicable signature
page hereto, except that unless otherwise provided by applicable law, any
failure to mail such copy shall not affect the validity of service of process.
If any agent appointed by Holding and Company refuses to accept service, Holding
and Company hereby
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agree that service upon it by registered mail shall constitute sufficient
notice. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of Agent, Collateral Agent
or any Lender to bring proceedings against Holding and each of its
Subsidiaries in the courts of any other jurisdiction.
10.17 Confidentiality
Lenders shall take normal and reasonable precautions to maintain the
confidentiality of all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as such by Holding or
any of its Subsidiaries but may, in any event, make disclosures reasonably
required by any bona fide assignee or participant (or prospective assignee or
participant) in connection with the contemplated assignment of any of the
Revolving Credit Commitments or Revolving Credit Loans or participations therein
or as required or requested by any governmental agency or representative thereof
or as required pursuant to legal process; PROVIDED that (a) such assignee or
participant agrees to comply with the provisions of this subsection 10.17,
(b) such prospective assignee or participant shall have executed a
confidentiality agreement substantially in the form of EXHIBIT V annexed hereto,
(c) unless specifically prohibited by applicable law or court order, each Lender
shall notify Company of any requirement or request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such governmental
agency) and any requirement pursuant to legal process of or for disclosure of
such information, and (d) in no event shall any Lender be obligated or required
to return any materials furnished by Holding and its Subsidiaries.
10.18 Interest and Charges
It is not the intention of any parties to this Agreement to make an
agreement in violation of the laws of any applicable jurisdiction relating to
usury. Regardless of any provision in any Loan Documents, no Lender shall ever
be entitled to receive, collect or apply, as interest on the Obligations, any
amount in excess of the Maximum Amount. If any Lender or participant ever
receives, collects or applies, as interest, any such excess, such amount which
would be excessive interest shall be deemed a partial repayment of principal and
treated hereunder as such; and if principal is paid in full, any remaining
excess shall be paid to Company. In determining whether or not the interest
paid or payable, under any specific contingency, exceeds the Maximum Amount,
Company and Lenders shall, to the maximum extent permitted under Applicable Law,
(a) characterize any nonprincipal payment as an expense, fee or premium rather
than as interest, (b) exclude voluntary prepayments and the effect thereof, and
(c) amortize, prorate, allocate and spread in equal parts, the total amount of
interest throughout the entire contemplated term of the Obligations so that the
interest rate is uniform throughout the entire term of the Obligations;
provided, however, that if the Obligations are paid and performed in full prior
to the end of the full contemplated term thereof, and if the interest received
for the actual period of existence thereof exceeds the Maximum Amount, Lenders
shall refund to Company the amount of such excess or credit the amount of such
excess against the total principal amount of the Obligations owing, and, in such
event, Lenders shall not be subject to
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any penalties provided by any laws for contracting for, charging or receiving
interest in excess of the Maximum Amount. This Section shall control every
other provision of all agreements pertaining to the transactions contemplated
by or contained in the Loan Documents.
10.19 Amendment, Restatement, Extension, Renewal and Increase
This Agreement is a renewal, extension, amendment, increase and restatement
and, as such, except for the "Obligations" as defined in the Original Credit
Agreement (which shall survive and shall be renewed, extended, increased and
restated by the terms of this Agreement), all other terms and provisions of this
Agreement supersede in their entirety the Original Credit Agreement. All Liens
created under the Collateral Documents shall remain valid, binding and
enforceable Liens against the Persons which granted such Liens.
10.20 Counterparts; Effectiveness
This Agreement and any amendments, waivers, consents, or supplements may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt of
written or telephonic notification of such execution and authorization of
delivery thereof by Holding, Company and Agent.
Holding and Company hereby acknowledge and agree that on and after the
Closing Date, each reference in the Loan Documents to the "Credit Agreement",
"thereunder", "thereof' and words of like import referring to the Credit
Agreement shall mean and be a reference to this Agreement.
-------------------------------------------------------------------------------
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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-115-
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
NU-KOTE INTERNATIONAL, INC.,
as Borrower
By: /s/ XXXXXX X. XXXXXXXXXX
---------------------------------
Name: Xxxxxx X. XxXxxxxxxx
---------------------------------
Title: Treasurer
---------------------------------
Notice Address:
Nu-kote International, Inc.
Suite 690, LB 21
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Treasurer
NU-KOTE HOLDING, INC.,
as Guarantor
By: /s/ XXXXXX X. XXXXXXXXXX
---------------------------------
Name: Xxxxxx X. XxXxxxxxxx
---------------------------------
Title: Treasurer
---------------------------------
Notice Address:
Xx-xxxx Xxxxxxx, Xxx.
Xxxxx 000, XX 21
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Treasurer
-116-
NATIONSBANK OF TEXAS, N.A.
as a Lender and as Administrative Agent and
Collateral Agent
By: /s/ XXXXXX X. XXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------
Title: Senior Vice President
---------------------------------
Notice Address:
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Senior Vice President
-117-
BARCLAYS BANK PLC,
as a Lender and as Documentation Agent
By: /s/ L. XXXXX XXXXXX
---------------------------------
Name: L. Xxxxx Xxxxxx
---------------------------------
Title: Associate Director
---------------------------------
Notice Address:
Barclays Bank PLC
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
-118-
COMMERZBANK AKTIENGESELLSCHAFT ATLANTA AGENCY
By: /s/ X. XXXXXX -- X. XXXXXXX
---------------------------------
Name: X. Xxxxxx--X.Xxxxxxx
---------------------------------
Title: V.President--V.President
---------------------------------
Notice Address:
Commerzbank Aktiengesellschaft
Atlanta Agency
Promenade Two, Suite 3500
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Vice President
-119-
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ XXXXXX XXXXXXXXX
---------------------------------
Name: Xxxxxx Xxxxxxxxx
---------------------------------
Title: Senior Vice President
---------------------------------
Notice Address:
Credit Lyonnais
0000 Xxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. X'Xxxxxx
Assistant Vice President
-120-
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
---------------------------------
Title: Vice President
---------------------------------
Notice Address:
The First National Bank of Chicago
One First Xxxxxxxx Xxxxx, Xxxx Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
-121-
SOCIETE GENERALE
By: /s/ XXXXXXX X. XXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxx
---------------------------------
Title: Vice President
---------------------------------
Notice Address:
Societe Generale
Xxxxxxxx Xxxx Center, Suite 4800
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Vice President
-122-
DEUTSCHE BANK AG NEW YORK BRANCH AND/OR CAYMAN
ISLANDS BRANCH
By: /s/ XXXX XXXXXXXX
---------------------------------
Name: Xxxx Xxxxxxxx
---------------------------------
Title: Vice President
---------------------------------
By: /s/ XXXXXX X. XXXX, XX.
---------------------------------
Name: Xxxxxx X. Xxxx, Xx.
---------------------------------
Title: Vice President
---------------------------------
Notice Address:
Deutsche Bank AG New York Branch
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Xx.
Vice President
-123-
ABN AMRO BANK, N.V.
By: /s/ XXXXXX X. XXXX
---------------------------------
Name: Xxxxxx X.Xxxx
---------------------------------
Title: Vice President and Director
---------------------------------
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: Xxxxxx X. Xxxxx
---------------------------------
Title: Group Vice President and
Director
---------------------------------
Notice Address:
ABN AMRO Bank, N.V.
Three Riverway, Suite 1700
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxx
-124-
EXHIBIT IA
[FORM OF NOTICE OF BORROWING]
Reference is made to that certain Amended and Restated Credit Agreement
dated as of October 11, 1996 (such agreement, as it may be amended, amended and
restated, supplemented or otherwise modified from time to time, being the
"Credit Agreement"; capitalized terms used herein without definition shall have
the meanings assigned those terms in the Credit Agreement) by and among Nu-kote
Holding, Inc., a Delaware corporation ("Holding"), Nu-kote International, Inc.,
a Delaware corporation ("Borrower"), the Lenders party thereto ("Lenders"),
Barclays Bank PLC, as Documentation Agent, and NationsBank of Texas, N.A., as
administrative agent ("Agent") and collateral agent.
Pursuant to the Credit Agreement, this represents Borrower's request to
borrow on ___________________ from Lenders on a pro rata basis $____________ as
[Base Rate/Eurodollar Rate] Loans. [The Interest Period for such Eurodollar
Rate Loans is requested to be a [one/two/three/six] month period]. The proceeds
of such Loans are to be deposited in Borrower's account at the office of Agent
located at NationsBank Plaza, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000.
The Borrower hereby certifies that (i) the representations and warranties
contained in the Credit Agreement and the other Loan Documents are true and
correct in all material respects on and as of the Funding Date to the same
extent as though made on and as of the Funding Date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties were true and correct in all material
respects on and as of such earlier date; (ii) no Event of Default or Potential
Event of Default has occurred and is continuing under the Credit Agreement or
will result from the proposed borrowing requested hereby; (iii) as of the
Funding Date Borrower and Holding will have in all material respects performed
all agreements and satisfied all conditions that under the Credit Agreement are
to be performed by either or both of them on or before the Funding Date;
(iv) after giving effect to the proposed borrowing requested hereby, the Total
Utilization of Revolving Credit Commitments will not exceed the aggregate
Revolving Credit Commitment in effect on the proposed Funding Date; and (v) each
of the other conditions to funding set forth in subsection 3.2B of the Credit
Agreement will be satisfied on the proposed Funding Date.
DATED: NU-KOTE INTERNATIONAL, INC.
-----------------------------
By:
----------------------------------
Name:
---------------------------
Title:
--------------------------
EXHIBIT IB
[FORM OF NOTICE OF ISSUANCE OF
LETTER OF CREDIT]
Reference is made to that certain Amended and Restated Credit Agreement
dated as of October 11, 1996 (such agreement, as it may be amended, amended
and restated, supplemented or otherwise modified from time to time, being the
"Credit Agreement"; capitalized terms used herein without definition shall
have the meanings assigned those terms in the Credit Agreement), by and among
Nu-kote Holding, Inc., a Delaware corporation ("Holding"), Nu-kote
International, Inc., a Delaware corporation ("Borrower"), the Lenders party
thereto ("Lenders"), Barclays Bank PLC, as Documentation Agent, and
NationsBank of Texas, N.A., as administrative agent and collateral agent.
Pursuant to the Credit Agreement, this represents Borrower's request to
have [1](1) issue a Letter of Credit for the account of Borrower on [2](2) in
the face amount of $[3](3) with an expiration date of [4](4) for the benefit
of [5].
The Borrower hereby certifies that (i) the representations and
warranties contained in the Credit Agreement and the other Loan Documents are
true and correct in all material respects on and as of the date hereof to the
same extent as though made on and as of the date hereof, except to the extent
such representations and warranties specifically relate to an earlier date,
in which case such representations and warranties were true and correct in
all material respects on and as of such earlier date; (ii) no Event of
Default or Potential Event of Default has occurred and is continuing under
the Credit Agreement or will result from the proposed issuance of the Letter
of Credit requested hereby; (iii) Borrower and Holding have in all material
respects performed all agreements and satisfied all conditions that under the
Credit Agreement are to be performed by either or both of them on or before
the date hereof; (iv) after giving effect to the proposed issuance, the Total
Utilization of Revolving Credit Commitments will not exceed the
-----------
(1) Insert name of Issuing Lender.
(2) Insert proposed date of issuance of Letter of Credit.
(3) Insert face amounts of Letter of Credit in numbers.
(4) Insert expiration date for the Letter of Credit.
(5) Insert name and address of the beneficiary of the Letter of Credit.
aggregate Revolving Credit Commitments; and (v) each of the other conditions
to the issuance of a Letter of Credit set forth in subsection 3.3 of the
Credit Agreement will be satisfied on the proposed date of issuance of the
Letter of Credit requested hereby.
DATED: NU-KOTE INTERNATIONAL, INC.
--------------------------
By:
-----------------------------------
Name:
-----------------------------
Title:
----------------------------
-2-
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
Reference is made to that certain Amended and Restated Credit Agreement
dated as of October 11, 1996 (such agreement as it may be amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; capitalized terms used herein without definition shall have the
meanings assigned to those terms in the Credit Agreement) by and among Nu-kote
Holding, Inc., a Delaware corporation, Nu-kote International, Inc., a Delaware
corporation ("Borrower"), the lenders party thereto, Barclays Bank PLC, as
Documentation Agent, and NationsBank of Texas, N.A., as administrative agent and
collateral agent for the lenders party thereto.
Pursuant to the Credit Agreement, this represents Borrower's request to
[convert $___________ in principal amount of [Base Rate/Eurodollar Rate] Loans
[with an Interest Period expiration date of _______________, 19___] to Base
Rate/Eurodollar Rate Loans on _________________, 19___.] [The Interest Period
for such Eurodollar Rate Loans is requested to be a _________ period.] [continue
as Eurodollar Rate Loans $_______________ in principal amount of presently
outstanding Revolving Credit Loans with an Interest Period expiration date of
____________, 19___.] [The Interest Period for such Eurodollar Rate Loans
commencing on such Interest Period expiration date is requested to be a
______________ period.] Borrower certifies that no Event of Default or
Potential Event of Default has occurred and is continuing under the Credit
Agreement or will result from the proposed [conversion/continuation].
DATED: NU-KOTE INTERNATIONAL, INC.
----------------------------
By:
----------------------------------
Name:
----------------------------
Title:
---------------------------
EXHIBIT III
_____________, 1996
To the Parties named on Schedule I hereto
Dear Sirs:
Reference is made to the legal opinion rendered by this firm, addressed
to you dated February 24, 1995, a copy of which is attached hereto as Exhibit
A (the "Original Opinion"). Unless otherwise defined herein, all terms used
herein shall have the meaning given such terms in the Original Opinion.
You have advised us that the U.S. Credit Agreement is being amended and
restated in its entirety pursuant to an Amended and Restated Credit Agreement
dated _____________, 1996, by and among Holding, Company, Administrative
Agent, Collateral Agent, Documentation Agent, and the lenders party thereto
(the "Amended and Restated Credit Agreement"). You have further advised us
that in connection with the Amended and Restated Credit Agreement (a) each of
the Collateral Documents is being acknowledged, ratified, reaffirmed and
modified pursuant to an Acknowledgement dated as of ______________, 1996,
executed by the Loan Parties (the "Acknowledgement"), and (b) each of the
Term Notes and Revolving Credit Notes executed in connection with the U.S.
Credit Agreement (and as defined therein) (collectively, the "Prior Notes")
are being amended and restated in their entirety in the form of (i) a
Revolving Credit Note dated ___________, 1996, executed by Borrower payable
to NationsBank of Texas, N.A. in the amount of $_____________, (ii) a
Revolving Credit Note executed by Borrower payable to Barclays Bank PLC in
the amount of $_________________, (iii) a Revolving Credit Note dated
___________, 1996, executed by Borrower payable to COMMERZBANK
Aktiengesellschaft Atlanta Agency in the amount of $_____________, (iv) a
Revolving Credit Note executed by Borrower payable to Credit Lyonnais, New
York Branch in the amount of $_________________, (v) a Revolving Credit Note
dated ___________, 1996, executed by Borrower payable to The First National
Bank of Chicago in the amount of $_____________, (vi) a Revolving Credit Note
executed by Borrower payable to Societe Generale in the amount of
$_________________, (vii) a Revolving Credit Note dated ___________, 1996,
executed by Borrower payable to Bank of Scotland in the amount of
$_____________, (viii) a Revolving Credit Note executed by Borrower payable
to Deutsche Bank AG, New York and/or Cayman Islands Branch in the amount of
$_________________, and (ix) a Revolving Credit Note executed by Borrower
payable to ABN AMRO Bank N.V. in the amount of $_________________ (such notes
are collectively referred to herein as the "New Notes") (the
To the Parties named on Schedule I hereto
Page 2
Amended and Restated Credit Agreement, the Acknowledgement and the New Notes
are collectively referred to herein as the "Restatement Documents").
You have provided to us and we have reviewed copies of the Amended and
Restated Credit Agreement, the Acknowledgement and the New Notes. You have
requested that we reaffirm our original opinion and render the additional
opinions expressed herein. In that regard, please be advised that based upon
our review of the Amended and Restated Credit Agreement, the Acknowledgement
and the New Notes and on such examinations of law as we have deemed relevant
for purposes of this letter, but subject to and based on all assumptions and
limitations set forth in the Original Opinion (which are incorporated herein
by reference for all purposes to the same extent as if set forth herein
verbatim), we are of the opinion that:
1. Each Loan Party is duly incorporated, validly existing and in good
standing under the laws of the state or commonwealth in which it was
incorporated, and has the corporate power and authority to own and
operate its property, to lease the property it operates and to conduct
the business in which it is currently engaged.
2. Each Loan Party has the corporate power and authority to execute,
deliver and perform on its behalf the Restatement Documents to which
it is a party, and has taken all necessary corporate action to
authorize the execution and delivery of the Restatement Documents to
which it is a party, and to authorize the performance by it of its
obligations under such documents.
3. No consent or authorization of, filing with, or, other act by or in
respect of, any federal, Delaware or Texas governmental authority is
required in connection with the borrowings under the Amended and
Restated Credit Agreement or with the execution, delivery, validity or
enforcement of the Restatement Documents, other than consents,
authorizations, filings and other acts made, obtained or done prior to
the date hereof.
4. Each of the Restatement Documents to which a Loan Party is a party has
been duly executed and delivered on behalf of such Loan Party, and
constitutes a valid, binding and legal obligation of such Loan Party.
5. The execution, delivery and performance of the Restatement Documents,
the borrowings contemplated by the Amended and Restated Credit
Agreement and the granting of the security interests granted by the
Collateral Documents do not and will not violate the certificate of
incorporation or by-laws of any Loan Party or any material federal or
Texas law known to us to be applicable to or binding upon the Loan
Parties.
To the Parties named on Schedule I hereto
Page 3
Our Original Opinion is hereby reaffirmed effective the date hereof
after giving effect to the Amended and Restated Credit Agreement and the
Acknowledgement to the same extent as if rendered on the date hereof and is
not limited by or rendered inaccurate as a result of (a) the amendment and
restatement of the U.S. Credit Agreement in the form of the Amended and
Restated Credit Agreement, (b) the modification of the Collateral Documents
pursuant to the Acknowledgement, or (c) the amendment and restatement of the
Prior Notes pursuant to the New Notes.
Very truly yours,
[Name of Firm]
Schedule I
NationsBank of Texas, N.A., as Administrative Lender, Collateral Agent and a
Lender
Barclays Bank PLC, as Documentation Agent and a Lender
COMMERZBANK Aktiengesellschaft Atlanta Agency, as a Lender
Credit Lyonnais, New York Branch, as a Lender
The First National Bank of Chicago, as a Lender
Societe Generale, as a Lender
Bank of Scotland, as a Lender
Deutsche Bank AG, New York and/or Cayman Islands Branch, as a Lender
ABN AMRO Bank N.V., as a Lender
EXHIBIT IV
__________, 1996
NationsBank of Texas, N.A.,
as Administrative Agent
NationsBank Plaza
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Re: Loans to Nu-kote International, Inc.
------------------------------------
Ladies and Gentlemen:
We have acted as counsel to NationsBank of Texas, N.A., as agent ("Agent"),
in connection with the preparation and delivery of an Amended and Restated
Credit Agreement dated as of October 11, 1996 (the "Credit Agreement";
capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement) by and among Nu-kote Holding, Inc., a Delaware
corporation ("Holding"), Nu-kote International, Inc., a Delaware corporation
("Borrower"), the lenders party thereto ("Lenders"), Barclays Bank PLC, as
Documentation Agent, NationsBank of Texas, N.A., as Administrative Agent and
Collateral Agent, and in connection with the preparation and delivery of certain
related documents.
We have participated in various conferences with representatives of
Holding, Borrower, and Agent and conferences and telephone calls with XxXxxxxxxx
Xxxxxxxx Xxxx and Xxxxxxxxx & Xxxxxxxx, counsel to Holding and Borrower, and
with your representatives, during which the Credit Agreement and related matters
have been discussed, and we have also participated in the meeting held on the
date hereof (the "Closing") incident to the making of the initial extensions of
credit under the Credit Agreement. We have reviewed the forms of the Credit
Agreement and the exhibits thereto, and the opinion of XxXxxxxxxx Xxxxxxxx Lang
(the "Opinion") and officers' certificates and other documents delivered at the
Closing. We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals or copies, the due authority of all
persons executing the same, and we have relied as to factual matters on the
documents which we have reviewed.
Although we have not independently considered all of the matters covered by
the Opinion to the extent necessary to enable us to express the conclusions
therein stated, we believe that the Credit Agreement and the exhibits thereto
are in substantially acceptable legal form, and that the Opinion and the
certificates and other documents delivered in connection with the execution and
delivery of, and as conditions to the making of the initial extensions of credit
under, the Credit Agreement are substantially responsive to the requirements of
the Credit Agreement.
Respectfully submitted,
EXHIBIT V
[FORM OF CONFIDENTIALITY AGREEMENT]
The undersigned, _____________________________, a prospective
[assignee/participant] to that certain Amended and Restated Credit Agreement
dated as of October 11, 1996 (such agreement, as it may be amended, amended
and restated, supplemented or otherwise modified from time to time, being the
"Credit Agreement"; capitalized terms used herein without definition shall
have the meanings assigned those terms in the Credit Agreement) by and among
Nu-kote Holding, Inc., a Delaware corporation ("Holding"), Nu-kote
International, Inc., a Delaware corporation ("Company"), the Lenders party
thereto, Barclays Bank PLC, as Documentation Agent, and NationsBank of Texas,
N.A., as administrative agent and collateral agent, ("Prospective
[Assignee/Participant]"), hereby agrees as follows for the benefit of Holding
and Company:
Prospective [Assignee/Participant] agrees that all financial
statements, financial projections, operating or other data, tax
returns, reports and other information, that have been or may be
provided to (i) Prospective [Assignee/Participant], (ii) the employees
and agents of Prospective [Assignee/Participant], and/or
(iii) accountants, attorneys or other professionals retained by such
parties whether delivered by Holding or Company or its Subsidiaries or
otherwise shall be kept strictly confidential by such recipients, and
shall be used solely in connection with its consideration of [an
assignment/a participation] in respect of the Credit Agreement;
PROVIDED, that Prospective [Assignee/Participant] may, in any event,
make disclosures as required or requested by any governmental agency
or representative thereof or as required pursuant to legal process.
Unless specifically prohibited by applicable law or court order,
Prospective [Assignee/Participant] shall notify Company of any
requirement or request by any governmental agency or representative
thereof (other than any such request in connection with an examination
of the financial condition of such Prospective [Assignee/Participant]
by such governmental agency) and any requirement pursuant to legal
process of or for disclosure of such information. In no event shall
Prospective [Assignee/Participant] be obligated or required to return
any materials furnished by Holding and its Subsidiaries.
THIS CONFIDENTIALITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES).
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the Prospective [Assignee/Participant] has caused
this Agreement to be executed by its officer thereunto duly authorized, as of
_________________, 19____.
[NAME OF PROSPECTIVE ASSIGNEE/PARTICIPANT]
By:
-----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
-2-
EXHIBIT VI
FORM OF COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected Treasurer of Nu-kote Holding, Inc., a
Delaware corporation ("Holding").
(2) I have reviewed the terms of the Amended and Restated Credit
Agreement dated as of October 11, 1996, by and among Holding, Nu-kote
International, Inc., a Delaware corporation ("Borrower"), the lenders party
thereto, Barclays Bank PLC as documentation agent for such lenders and
NationsBank of Texas, N.A., as administrative agent and collateral agent, (as
such agreement may have been amended, amended and restated, supplemented or
otherwise modified from time to time to and including the date hereof (the
"Credit Agreement"); capitalized terms used herein without definition shall
have the meanings assigned to those terms in the Credit Agreement). I have
also reviewed the terms of the other Loan Documents. I have made, or have
caused to be made under my supervision, a review in reasonable detail of the
transactions and conditions of Holding and its Subsidiaries during the
accounting period covered by the attached financial statements.
(3) The examinations described in paragraph (2) made by me or under
my supervision did not disclose, and I have no knowledge of, the existence of
any condition or event that constitutes an Event of Default or Potential
Event of Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate, except
as set forth below; and
(4) As of the date of this Certificate, I have no knowledge of any
respect in which Holding and its Subsidiaries are in default under any
negative covenant set forth in Section 6 of the Credit Agreement, except as
set forth below.
[Describe below (or in a separate attachment to this Certificate) the
exceptions, if any, to paragraphs (3) and (4) by listing, in detail, the nature
of the condition or event, the period during which it has existed and the
action which Holding or Borrower has taken, is taking, or proposes to take with
respect to each such condition or event:]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Attachment No. 1 hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _____ day of
______________, 19___ pursuant to subsection 5.1(iii) of the Credit Agreement.
NU-KOTE HOLDING, INC.
By:
-----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
-2-
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
(EXHIBIT VI)
(The Certificate attached hereto is as of ___________ and pertains to the
period from _____________________________ to ________________________________.)
Capitalized terms used herein shall have the meanings set forth in the
Amended and Restated Credit Agreement dated as of October 11, 1996, by and
among Nu-Kote Holding, Inc., a Delaware corporation, Nu-Kote International,
Inc., a Delaware corporation ("Borrower"), the lenders party thereto,
Barclays Bank PLC as Documentation Agent for such lenders ("Documentation
Agent"), and NationsBank of Texas, N.A., as Administrative Agent and
Collateral Agent. Subsection references herein relate to the subsections of
the Credit Agreement.
A. Subsection 6.1(vi) Indebtedness of Discontinued
Operations
1. For working capital and other general corporate
purposes
a. Maximum $2,000,000
b. Actual $________
2. Additional Indebtedness
a. Maximum $5,000,000
b. Actual $________
B. Subsection 6.1(vii) Indebtedness of Latin American
Subsidiaries
1. Maximum $3,000,000
2. Actual $________
C. Subsection 6.1(x) Indebtedness for financing
insurance policies premiums
1. Maximum $3,000,000
2. Actual $________
D. Subsection 6.1(xii) Indebtedness in respect of
Acquisition Debt
1. Maximum $25,000,000
2. Actual $________
E. Subsection 6.1(xiv) Other Indebtedness
1. Maximum $5,000,000
2. Actual $________
VI - Attachment 1 - 1
F. Subsection 6.3(vi) Investments in N-K Interface
Limited
1. Maximum $500,000
2. Actual $________
G. Subsection 6.3(vii) Investments in Eurocurrency
Borrowers
1. Maximum $15,000,000
2. Actual $________
H. Subsection 6.3(viii) Investments in Latin American
Subsidiaries
1. Maximum $5,000,000
2. Actual $________
I. Subsection 6.3(ix) Investments by Grief and
Hardcopy Deutschland in its Subsidiaries and
Chinese questions
1. Maximum $5,000,000
2. Actual $________
J. Subsection 6.3(x) Investments by Produktions and
Pelikan Hardcopy in its Subsidiaries
1. Maximum $20,000,000
2. Actual $________
K. Subsection 6.3(xi) Investments by Pelikan in its
Subsidiaries and U.K. Subsidiaries
1. Maximum $5,000,000
2. Actual $________
L. Subsection 6.3(xii) Investments by Greif and
Hardcopy Deutschland in Produktions, Pelikan
Hardcopy and Pelikan Scotland
1. Maximum $15,000,000
2. Actual $________
M. Subsection 6.3(xiii) Investments by Produktions
and Pelikan Hardcopy in Greif, Hardcopy
Deutschland and Pelikan Scotland
1. Maximum $15,000,000
2. Actual $________
N. Subsection 6.3(xiv) Investments by Pelikan
Scotland in Greif, Hardcopy Deutschland,
Produktions or Pelikan Scotland
1. Maximum $15,000,000
2. Actual $________
VI - Attachment 1 - 2
O. Subsection 6.3(xv) Investments by Greif,
Hardcopy Deutschland, Produktions, Pelikan
Hardcopy and Pelikan Scotland in the Company
1. Maximum $30,000,000
2. Actual $________
P. Subsection 6.3(xvi) Other Investments
1. Maximum $5,000,000
2. Actual $________
Q. Aggregate Investments since Closing Date
(exclusive of Permitted Acquisitions) in Foreign
Subsidiaries pursuant to subsection 6.3 and
subsection 6.7(B)(viii)
1. Maximum $30,000,000
2. Actual $________
R. Subsection 6.4(xiii) Contingent Obligations in
respect of bonds
1. Maximum $1,000,000
2. Actual $________
S. Subsection 6.4(xiv) Other Contingent Obligations
1. Maximum $2,000,000
2. Actual $________
T. Subsection 6.5(i) Restricted Junior Payments
Generally
1. Maximum
a. $12,000,000
b. 25% of Consolidated Net Income from $________
Closing Date
c. (a) + (b) $________
2. Actual $________
U. Subsection 6.5(ii) Restated Junior Payments for
Stock options
1. Maximum $6,000,000
2. Actual $________
V. Subsection 6.6A Consolidated Total Debt to
Consolidated EBITDA Ratio (commencing with the
fiscal quarter ending in December 1996)
1. Consolidated Total Debt $________
a. Total long-term debt
b. Long-term Capital Leases
VI - Attachment 1 - 3
c. Current portion of long-term debt and
Capital Leases
d. Notes payable
e. Effect on (a) through (d) above resulting
from Discontinued Operations
f. Consolidated Total Debt $________
(a) + (b) + (c) + (d) - (e)
2. Consolidated EBITDA for the prior four fiscal $________
quarters ending on or before such date of
determination
a. Consolidated Net Income
(i) Net income (after provisions for $________
taxes and extraordinary items)
(ii) Income or loss of any Person merged $________
with, acquired or consolidated
with, which income or losses
accrued prior to the date of such
merger, acquisition or consolidation
(iii) Consolidated Net Income $________
(i) - (ii)
b. Provisions for taxes based on income $________
c. Consolidated Interest Expense $________
d. To the extent Consolidated Net Income has $________
been reduced thereby, amortization expense,
depreciation expense and other non-cash
expenses
e. Losses on Asset Sales $________
f. Extraordinary losses (excluding those $________
relating to environmental matters and ERISA
matters)
g. Other non-cash items reducing Consolidated $________
Net Income (excluding write-offs of
Inventory and accounts receivable)
h. Gains on Asset Sales $________
i. Consolidated Interest Income $________
j. Extraordinary gains (including those $________
relating to environmental matters and
ERISA matters)
VI - Attachment 1 - 4
k. Other non-cash items increasing $________
Consolidated Net Income
(a) + (b) + (c) + (d) + (e) + (f) + (g) - $________
(h) - (i) - (j) - (k)
Effect on any of the above components resulting
from Discontinued Operations shall be excluded
from such calculations
3. Consolidated Total Debt to Consolidated EBITDA
Ratio
(Line 1 divided by Line 2)
4. Maximum Leverage Ratio permitted by subsection
6.6A
a. For the first eight fiscal quarters 3.50 : 1.00
commencing with the fiscal quarter ending
in December 1996
b. Thereafter 3.00 : 1.00
W. Subsection 6.6B Minimum Interest Coverage Ratio
(commencing with the fiscal quarter ending in
December 1996)
1. Consolidated EBITDA (see A.2. above) as of the $________
last day of each fiscal quarter (calculated on
a consolidated basis for the period comprised
of four fiscal quarters ending on the last day
of each such fiscal quarter)
2. Consolidated Interest Expense as of the last $________
day of each fiscal quarter (calculated on a
cumulative basis for the period comprised of
four fiscal quarters ending on the last day of
each such fiscal quarter)
a. Total interest expenses (paid or accrued) $________
b. Interest component of Capital Leases $________
c. All commissions, discounts and other fees $________
and charges owed with respect to any
financing or letters of credit
d. Net costs under interest rate and foreign $________
currency protection agreements
(a) + (b) + (c) + (d)
3. Interest Coverage Ratio ____ : 1.00
(Line 1 divided by Line 2)
4. Minimum Interest Coverage Ratio required by 3.00 : 1.00
subsection 6.6B
X. Subsection 6.6C Minimum Consolidated Net Worth
1. Consolidated Total Assets $________
2. Consolidated Total Liabilities $________
VI - Attachment 1 - 5
3. Currency translation adjustments $________
4. Consolidated Net Worth $________
(Line 1 minus Line 2 plus/minus Line 3)
5. Base Amount $80,000.00
6. Cumulative Consolidated Net Income (excluding $________
any Fiscal Quarter in which Consolidated Net
Income was a negative number) earned on
or after February 24, 1995 and ending on such
determination date)
7. Consolidated Net Income Adjustment $________
(Line 6 multiplied by 0.75)
8. Minimum Consolidated Net Worth required by $________
subsection 6.6C
(Line 5 plus Line 7)
Y. Subsection 6.6D Maximum Consolidated GAAP Capital
Expenditures
1. Consolidated GAAP Capital Expenditures for $________
current Fiscal Year
2. Maximum amount of Consolidated GAAP Capital $________
Expenditures permitted pursuant to Section 6.6D
Z. Subsection 6.6E Minimum After Tax Cash Flow to
Fixed Charges Ratio (commencing with the fiscal
quarter ending in December 1996)
1. After Tax Cash Flow as of the last day of each $________
fiscal quarter (calculated on a cumulative
basis for the period comprised of four fiscal
quarters ending on the last day of such fiscal
quarter)
a. Consolidated Net Income (See 2.a. above) $________
b. To the extent Consolidated Net Income has $________
been reduced thereby, amortization expense,
depreciation expense, deferred taxes, and
other non-cash expenses
c. Losses on Asset Sales $________
d. Extraordinary losses (excluding $________
extraordinary items relating to
environmental and ERISA matters)
e. Other non-cash items reducing Consolidated $________
Net Income (excluding write-offs of
Inventory and accounts receivable)
f. Gains on Asset Sales $________
g. Extraordinary gains (excluding $________
extraordinary items relating to
environmental and ERISA matters)
VI - Attachment 1 - 6
h. Other non-cash items increasing $________
Consolidated Net Income
(a) + (b) + (c) + (d) + (e) - (f) - (g) - (h) $________
Effect on any of the above components resulting $________
from Discontinued Operations shall be excluded
from such calculation.
2. Fixed Charges as of the last day of each fiscal $________
quarter (calculated on a cumulative basis for
the period comprised of four fiscal quarters
ending on the last day of such fiscal quarter)
a. Total scheduled principal payments $________
(including principal component of Capital
Leases) with respect to all outstanding
Indebtedness
b. Consolidated GAAP Capital Expenditures $________
c. All Restricted Junior Payments paid $________
(i) any dividend or other distribution, $________
direct or indirect, on account of
any shares of any class of stock
of Holding now or hereafter
outstanding, except a dividend
payable solely in shares of that
class of stock to the holders of
that class
(ii) any redemption, retirement, sinking $________
fund or similar payment, purchase
or other acquisition for value,
direct or indirect, of any shares
of any class of stock of Holding
now or hereafter outstanding
(iii) any payment or prepayment of $________
principal of, premium, if any, or
interest one, redemption, purchase,
repurchase, retirement, defeasance,
sinking fund or similar payment or
deposit for payment with respect to,
any Subordinated Debt
(iv) any payment made to retire, or to $________
obtain the surrender of, any
outstanding warrants, options or
other rights to acquire shares of
any class of stock of Holding,
Company or any of their Subsidiaries
now or hereafter outstanding (other
than any such rights held by Holding
or a Subsidiary thereof)
(v) (i) + (ii) + (iii) + (iv) $________
VI - Attachment 1 - 7
d. Restricted Junior Payments $________
(a) + (b) + (c)
3. After Tax Cash to Fixed Changes Ratio ___ : 1.00
(Line 1 divided by Line 2)
4. Minimum After Tax Cash Flow to Fixed Charges 1.75 : 1.00
Ratio required by subsection 6.6E
AA. Subsection 6.7B(ii) Maximum Aggregate Acquisitions
1. Aggregate Acquisition Value of all Permitted $________
Acquisitions since January 1, 1996
2. Maximum Acquisition Value of Permitted $25,000,000.00
Acquisitions under subsection 6.7B(ii)
AB. Subsection 6.7B(iii) Maximum Assets Sales
1. With respect to assets located in the
United Kingdom
a. Pound Sterling equivalent of the net $________
book value of all Company and Subsidiary
assets located in the United Kingdom on
the Closing Date
b. Actual Aggregate Pound Sterling equivalent $________
of Net Cash Proceeds of Company and
Subsidiary assets located in the United
Kingdom sold since the Closing Date
c. Maximum aggregate United Kingdom Asset $________
Sales allowed under subsection 6.7B(iii)(B)
(Line (a) multiplied by 0.10)
2. With respect to assets located in Switzerland
a. Swiss Franc equivalent of the net book $________
value of all Company and Subsidiary
assets located in Switzerland on the
Closing Date
b. Actual Aggregate Swiss Franc equivalent $________
of Net Cash Proceeds of Company and
Subsidiary assets located in Switzerland
sold since the Closing Date
c. Maximum aggregate Switzerland Asset Sales $________
allowed under subsection 6.7B(iii)(C)
(Line (a) multiplied by 0.10)
3. With respect to assets located in Germany
a. German Xxxx equivalent of the net book $________
value of all Company and Subsidiary
assets located in Germany on the Closing
Date
b. Actual Aggregate German Xxxx equivalent $________
of Net Cash Proceeds of Company and
Subsidiary Assets located in Germany
sold since the Closing Date
VI - Attachment 1 - 8
c. Maximum aggregate German Asset Sales $________
allowed under subsection 6.7B(iii)(D)
(Line (a) multiplied by 0.10)
AC. Subsection 6.7B(xv) Maximum Asset Transfers
1. Maximum U.S./U.S. Asset Transfers
a. Net aggregate book value of all Company $________
and Subsidiary U.S./U.S. Transfers since
the Closing Date or most recent
Recalculation Date
b. Maximum post-Closing Date or most $5,000,000.00
recent Recalculation Date U.S./
U.S. Asset Transfers allowed under
subsection 6.7B(xv)(A)
2. Maximum U.S./Foreign Asset Transfers
a. Net aggregate book value of all $________
U.S./Foreign Transfers since
Closing Date
b. Maximum post-Closing Date U.S./ $7,500,000.00
Foreign Asset Transfers allowed
under subsection 6.7B(xv)(B)
3. Maximum U.K./Swiss Transfers
a. Pound Sterling equivalent of the net $________
book value of all Company and
Subsidiary assets located in the
United Kingdom on the Closing Date
b. Aggregate Pound Sterling equivalent $________
of the net book value of U.K./Swiss
Transfers since the Closing Date
c. Maximum aggregate U.K./Swiss Transfers $________
allowed under subsection 6.7B(xv)(C)
(Line (a) multiplied by 0.25)
4. Maximum Swiss/U.K. Transfers
a. Swiss Franc equivalent of the net book $________
value of all Company and Subsidiary
assets located in Switzerland on the
Closing Date
b. Aggregate Swiss Franc equivalent of the $________
net book value of Swiss/U.K. Transfers
since the Closing Date
c. Maximum aggregate Swiss/U.K. Transfers $________
allowed under subsection 6.7B(xv)(D)
(Line (a) multiplied by 0.25)
5. Maximum German Asset Transfers
a. German Xxxx equivalent of net book value $________
of all Company and Subsidiary assets
located in Germany on the Closing Date
VI - Attachment 1 - 9
b. Aggregate German Xxxx equivalent of the $________
net book value of German Asset Transfers
since the Closing Date
c. Maximum aggregate German Asset Transfers $________
allowed under subsection 6.7B(xv)(E)
(Line (a) multiplied by 0.25) $
VI - Attachment 1 - 10
EXHIBIT VII
[FORM OF ASSIGNMENT AGREEMENT]
Reference is made to the Amended and Restated Credit Agreement, dated as of
October 11, 1996, by and among Nu-kote International, Inc., as borrower, Nu-Kote
Holding, Inc., as guarantor, the lenders party thereto, Barclays Bank PLC, as
documentation agent, and NationsBank of Texas, N.A., as administrative agent and
collateral agent (the "Credit Agreement"). Terms defined in the Credit
Agreement are used herein as therein defined ____________________________ (the
"Assignor") and _________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a _____% interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the date hereof, including, without limitation, such percentage interest
in the Assignor's Revolving Credit Commitment and the Revolving Credit Loans
owing to the Assignor. After giving effect to such sale and assignment, the
Assignee's Revolving Credit Commitment and the amount of the Loans owing to the
Assignee will be as set forth in Item 2 of Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
(iv) represents and warrants that as of the date hereof, its Revolving Credit
Commitment (without giving effect to assignments thereof which have not yet
become effective) is $______________ and, as of the date hereof, the outstanding
principal amount of Revolving Credit Loans owing to it (without giving effect to
assignments thereof that have not become effective) is $___________; and
(v) attaches its Revolving Credit Note to exchange such Revolving Credit Note
for new Revolving Credit Notes as follows: a Revolving Credit Note dated
_______________________, _____, in the principal amount of
$______________________, payable to the order of Assignee, and a Revolving
Credit Note dated __________________, _____, in the principal amount of
$_____________ payable to the order of Assignor.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to therein
and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (ii) agrees that it will,
independently and without reliance, as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) confirms that it is an eligible as an
assignee under the terms of the Credit Agreement; (iv) appoints and
authorizes each of Agent and Collateral Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement as are
delegated to the Agent and Collateral Agent by the terms thereof, together
with such powers as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Lender; (vi) acknowledges that the Collateral Agent is authorized to receive
notices under the Credit Agreement on behalf of the Assignee in accordance
with the terms thereof; and (vii) [attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement or
such other documents as are necessary to indicate that all such payments are
subject to such rates at a rate reduced by an applicable tax treaty] [certifies
that it is a financial institution organized under the laws of the United States
or a state thereof].
4. Following the execution of this Assignment Agreement by the Assignor
and Assignee, it will be delivered to the Agent. The effective date of this
Assignment Agreement shall be the date of execution hereof by the Assignor and
the Assignee and the receipt of any consent of the Company and the Agent, unless
otherwise specified on Item 6 of Annex I hereto (the "Settlement Date").
5. Upon such acceptance, as of the Settlement Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment Agreement, have the rights and obligations of a Lender thereunder and
(ii) the Assignor shall, to the extent provided in this Assignment Agreement,
relinquish its rights and be released from its obligations under the Credit
Agreement.
6. Upon such acceptance, from and after the Settlement Date, the Agent
shall make all payments under the Credit Agreement to be made by the Agent in
respect of the interests assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees (if applicable) with respect
thereto) to the Assignee. Upon the Settlement Date, the Assignee shall pay to
the Assignor its Pro Rata Share of the principal amount of any outstanding
Revolving Credit Loans under the Credit Agreement. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Settlement Date directly between themselves on the
Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES).
-2-
HOLDING AND COMPANY ARE INTENDED THIRD PARTY BENEFICIARIES OF THIS ASSIGNMENT
AGREEMENT.
8. In the case of any irreconcilable conflict between the provisions of
this Assignment Agreement and the Credit Agreement, the provisions of the Credit
Agreement shall control.
9. This Assignment Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall constitute but one and the same instrument.
-------------------------------------------------------------------------------
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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-3-
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written, such execution being made on Annex I hereto.
[NAME OF ASSIGNOR]
as Assignor
By:
------------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[NAME OF ASSIGNEE]
as Assignee
By:
------------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Accepted this ____ day of
_______________, 19____
NATIONSBANK OF TEXAS, N.A.
as Agent
By:
------------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
-4-
ANNEX I
1. Date of Assignment Agreement: _________________, 19____.
2. Amounts (As of Date of Item #1 above):
a. Revolving Credit Commitment $
------------
b. Revolving Credit Loan $
------------
c. Assigned Share %
-----------
3. Settlement Date:(1)
4. Notice and Payment Instructions:
===============================================================================
Payment Notice
-------------------------------------------------------------------------------
ASSIGNOR:
------------------ ------------------
------------------ ------------------
------------------ ------------------
Attention: Attention:
Reference: Telephone:
Telecopier:
Reference:
-------------------------------------------------------------------------------
ASSIGNEE:
------------------ ------------------
------------------ ------------------
------------------ ------------------
Attention: Attention:
Reference: Telephone:
Telecopier:
Reference:
===============================================================================
-----------
(1) This date should be no earlier than the date of acceptance by the Agent.
Accepted and Agreed:
(NAME OF ASSIGNEE) (NAME OF ASSIGNOR)
By: By:
----------------------------- -------------------------------
Name: Name:
------------------------ --------------------------
Title: Title:
----------------------- -------------------------
Consented:
NATIONSBANK OF TEXAS, N.A.,
as Agent
By:
-----------------------------
Name:
------------------------
Title:
-----------------------
Annex I - 2
ANNEX II
[FORM OF COMPANY CONSENT]
Reference is made to that certain Assignment Agreement dated as of
_____________, 19____ between [LENDER] and [ASSIGNEE]. Pursuant to
subsection 10.2 of the Credit Agreement referred to therein, this represents the
consent of Nu-kote International, Inc. to the assignment described in such
Assignment Agreement.
NU-KOTE INTERNATIONAL, INC.
By:
----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
EXHIBIT VIII
REVOLVING CREDIT NOTE
Dallas, Texas $______________ ____________, 1996
FOR VALUE RECEIVED, Nu-kote International, Inc., a Delaware corporation
(the "BORROWER"), promises to pay to the order of ________________________
(the "LENDER"), at the principal office of NationsBank of Texas, N.A., in
lawful money of the United States of America, the principal sum of
__________________________________ DOLLARS ($___________________), or such
lesser sum as shall be due and payable from time to time hereunder, as
hereinafter provided. All terms used but not defined herein shall have the
meanings set forth in the Credit Agreement described below.
Principal of and interest on the unpaid principal balance of Revolving
Credit Loans under this Note from time to time outstanding shall be due and
payable as set forth in the Credit Agreement.
This Note is issued pursuant to and evidences Revolving Credit Loans under
that certain Amended and Restated Credit Agreement, dated as of October 11,
1996, among the Borrower, Nu-kote Holding, Inc., NationsBank of Texas, N.A., as
Administrative Agent and Collateral Agent, Barclays Bank PLC, as Documentation
Agent, and the lenders parties thereto (as amended, restated, supplemented,
renewed, extended or otherwise modified from time to time, the "Credit
Agreement"), to which reference is made for a statement of the rights and
obligations of the Lender and the duties and obligations of the Borrower in
relation thereto.
Except as otherwise expressly provided in the Credit Agreement, the
Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment for payment, protest, notice of protest,
notice of intention to accelerate the maturity of this Note, diligence in
collecting, the bringing of any suit against any party and any notice of or
defense on account of any extensions, renewals, partial payments or changes in
any manner of or in this Note or in any of its terms, provisions and covenants,
or any releases or substitutions of any security, or any delay, indulgence or
other act of any trustee or any holder hereof, whether before or after maturity.
THIS NOTE, TOGETHER WITH THE OTHER DOMESTIC LOAN DOCUMENTS, REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREIN AND
THEREIN AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
NU-KOTE INTERNATIONAL, INC.
By:
-----------------------------------
Name:
-----------------------------
Title:
----------------------------
-2-
EXHIBIT IX
ACKNOWLEDGEMENT
This Acknowledgement (this "Acknowledgement") is being executed this _____
day of ______________, 1996, by the undersigned, in favor of the Administrative
Agent, Collateral Agent, Documentation Agent, and the Lenders party to the
Credit Agreements (as hereinafter defined).
RECITALS:
1. Nu-Kote International, Inc. ("Borrower") and Nu-kote Holding, Inc.
("Holding") entered into that certain Credit Agreement dated February 24, 1995,
with NationsBank of Texas, N.A., as Administrative Agent and Collateral Agent,
Barclays Bank PLC, as Documentation Agent, and the Lenders party thereto (as
heretofore amended or modified from time to time, the "Prior US Credit
Agreement").
2. The Prior US Credit Agreement is being amended and restated in its
entirety pursuant to an Amended and Restated Credit Agreement, dated October 11,
1996, among Borrower, Holding, NationsBank of Texas, N.A., as Administrative
Agent and Collateral Agent (in such latter capacity herein referred to as
"Collateral Agent"), Barclays Bank PLC, as Documentation Agent, and the Lenders
party thereto (as hereafter amended, modified or restated from time to time, the
"US Credit Agreement"). Defined terms used herein and not otherwise defined
herein shall have the meaning given such terms in the US Credit Agreement.
3. Pelikan Produktions AG and Pelikan Hardcopy (International) AG, both
Swiss corporations (collectively "Swiss Borrowers"), have entered into that
certain Revolving Credit Facility Agreement dated as of February 24, 1995, with
Barclays de Zoete Wedd Limited and NationsBanc Capital Markets, Inc., as
arrangers, Barclays Bank PLC, as agent, NationsBank of Texas, N.A., as
documentation agent and collateral agent, and the other lenders party thereto
(said Revolving Credit Facility Agreement, as restated and amended on June 2,
1995, and as otherwise heretofore or hereafter amended, modified or restated
from time to time, being the "Swiss Credit Agreement").
4. Pelikan Scotland Limited, a limited liability company organized under
the laws of England and Wales ("Scotland Limited"), has entered into that
certain Revolving Credit Facility Agreement dated as of February 24, 1995, with
Barclays de Zoete Wedd Limited and NationsBanc Capital Markets, Inc., as
arrangers, Barclays Bank PLC, as agent, NationsBank of Texas, N.A., as
documentation agent and collateral agent, and the other lenders party thereto
(said Revolving Credit Facility Agreement, as restated and amended on June 2,
1995, and as otherwise heretofore or hereafter amended, modified or restated
from time to time, being the "UK Credit Agreement"). The Swiss Credit Agreement
and the UK Credit Agreement are
collectively referred to herein as the "Foreign Credit Agreements" and the
Foreign Credit Agreements, together with the US Credit Agreement, are
collectively referred to herein as the "Credit Agreements".
5. Each of the Foreign Credit Agreements is being amended and restated
and, in connection therewith, the Termination Date of each will be extended and
the amount of the Commitment under the Swiss Credit Agreement will be increased
(collectively, the "Foreign Credit Agreement Amendments").
6. The term "Guarantors" as used herein shall mean the parties designated
as such on the signature pages hereof. The term "Grantors" as used herein shall
mean the parties designated as such on the signature pages hereof.
7. Each of the Guarantors (other than Borrower) has executed a guaranty
agreement more particularly described on SCHEDULE I hereto, pursuant to which
each Guarantor has guaranteed the obligations of Borrower under the Prior US
Credit Agreement (as heretofore or hereafter amended, modified or restated from
time to time, collectively, the "US Guaranties").
8. Each of the Guarantors has executed a guaranty agreement more
particularly described on SCHEDULE II hereto, pursuant to which each Guarantor
has guaranteed the obligations of the Swiss Borrower and Scotland Limited under
the respective Foreign Credit Agreements to which they are parties (as
heretofore or hereafter amended, modified or restated from time to time,
collectively, the "Foreign Guaranties").
9. Each of the Grantors has executed a security agreement more
particularly described on SCHEDULE III hereto, pursuant to which each Grantor
has granted a security interest in certain assets owned by it to Collateral
Agent to secure its obligations under its Guaranty and the other Loan Documents
(as heretofore or hereafter amended, modified or restated from time to time,
collectively, the "Security Agreements").
10. Holding has executed a pledge agreement dated February 24, 1995,
pursuant to which Holding has granted a security interest in the capital stock
of Borrower and of Nu-kote Imperial, Ltd. owned by it to Collateral Agent to
secure its obligations under its Guaranty and the other Loan Documents (as
heretofore or hereafter amended, modified or restated from time to time, the
"Holding Pledge Agreement").
11. Borrower has executed the pledge agreements more particularly
described on Schedule IV hereto, pursuant to which Borrower has granted a
security interest in certain of the capital stock of certain of its Subsidiaries
owned by it to Collateral Agent to secure its obligations under the Prior US
Credit Agreement and the other Loan Documents (as heretofore or hereafter
amended, modified or restated from time to time, the "Borrower Pledge
Agreements"; the Holding Pledge Agreement and the Borrower Pledge Agreements are
collectively referred to herein as the "Pledge Agreements"; Holding and Borrower
are collectively referred to herein as the "Pledgors").
-2-
12. It is a condition precedent to the effectiveness of the US Credit
Agreement that each of the undersigned execute and deliver this Acknowledgement
to Collateral Agent.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and in order to induce Lenders to enter into the Credit
Agreements and to make loans thereunder, the undersigned hereby agree as
follows:
1. Each Guarantor (a) acknowledges that the US Credit Agreement
(i) amends, restructures, increases, extends and renews the indebtedness under
the Prior US Credit Agreement and (ii) extends the Commitment Termination Date,
(b) acknowledges and consents to the execution, delivery and performance by
Borrower of the US Credit Agreement, (c) agrees that its obligations in respect
of its US Guaranty are not released, modified, impaired or affected in any
manner by the US Credit Agreement, (d) acknowledges that it has no claims or
offsets against, or defenses or counterclaims to, its US Guaranty,
(e) acknowledges and agrees that the defined term "Guaranteed Indebtedness" (as
defined in each US Guaranty) includes the entire Obligations (under and as
increased by the US Credit Agreement), (f) acknowledges and agrees that the
defined term "Credit Agreement" in each US Guaranty shall mean the US Credit
Agreement (as defined herein), and (g) ratifies and reaffirms its obligations
under its US Guaranty.
2. Each Guarantor (a) acknowledges that each Foreign Credit Agreement
Amendment extends the Termination Date (under and as defined in the Foreign
Credit Agreements), (b) acknowledges and consents to the execution, delivery and
performance by the Swiss Borrowers and Scotland Limited of the Foreign Credit
Agreement Amendments to which each is party, (c) agrees that its obligations in
respect of its Foreign Guaranties are not released, modified, impaired or
affected in any manner by the Foreign Credit Agreement Amendments,
(d) acknowledges that it has no claims or offsets against, or defenses or
counterclaims to, its Foreign Guaranties, (e) acknowledges and agrees that the
defined term "US Credit Agreement" in each Foreign Guaranty shall mean the US
Credit Agreement (as defined herein), and (f) ratifies and reaffirms its
obligations under its Foreign Guaranties.
3. Each Grantor (a) acknowledges that the US Credit Agreement (i) amends,
restructures, increases, extends and renews the indebtedness under the Prior US
Credit Agreement and (ii) extends the Commitment Termination Date,
(b) acknowledges and consents to the execution, delivery and performance by
Borrower of the US Credit Agreement, (c) agrees that its obligations in respect
of its Security Agreements are not released, modified, impaired or affected in
any manner by the US Credit Agreement, (d) acknowledges that it has no claims or
offsets against, or defenses or counterclaims to, its Security Agreements,
(e) acknowledges and agrees that the defined term "Secured Obligations" (as
defined in each Security Agreement) includes the entire Obligations (under and
as increased by the US Credit Agreement),
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(f) acknowledges and agrees that the defined term "US Credit Agreement" in
each Security Agreement shall mean the US Credit Agreement (as defined
herein), and (g) ratifies and reaffirms its obligations under its Security
Agreements.
4. Each Pledgor (a) acknowledges that the US Credit Agreement (i) amends,
restructures, increases, extends and renews the indebtedness under the Prior US
Credit Agreement and (ii) extends the Commitment Termination Date,
(b) acknowledges and consents to the execution, delivery and performance by
Borrower of the US Credit Agreement, (c) agrees that its obligations in respect
of its Pledge Agreement[s] are not released, modified, impaired or affected in
any manner by the US Credit Agreement, (d) acknowledges that it has no claims or
offsets against, or defenses or counterclaims to, its Pledge Agreement[s],
(e) acknowledges and agrees that the defined term "Secured Obligations" (as
defined in each Pledge Agreement) includes (X) the entire Obligations (under and
as increased by the US Credit Agreement) and (Y) the entire obligations under
the Swiss Credit Agreement, as increased by the Foreign Credit Agreement
Amendment to the Swiss Credit Agreement, (f) acknowledges and agrees that the
defined term "US Facility Agreement" in each Pledge Agreement shall mean the US
Credit Agreement (as defined herein), (g) acknowledges that each Foreign Credit
Agreement Amendment extends the Termination Date (under and as defined in the
Foreign Credit Agreements), (h) acknowledges and consents to the execution,
delivery and performance by the Swiss Borrowers and Scotland Limited of the
Foreign Credit Agreement Amendments to which each is party, (i) agrees that its
obligations in respect of its Pledge Agreements are not released, modified,
impaired or affected in any manner by the Foreign Credit Agreement Amendments,
(j) acknowledges that it has no claims or offsets against, or defenses or
counterclaims to, its Foreign Guaranty, and (k) ratifies and reaffirms its
obligations under its Pledge Agreements.
5. This Acknowledgement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
6. This Acknowledgement shall be governed by and construed in accordance
with the laws of the State of Texas and shall be binding upon each Guarantor and
Grantor and their respective successors and assigns.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this Acknowledgement
as of the date first above written.
GUARANTORS:
NU-KOTE HOLDING, INC., a Delaware corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
NU-KOTE INTERNATIONAL, INC., a Delaware
corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
FUTURE GRAPHICS, INC., a California corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
INTERNATIONAL COMMUNICATION MATERIALS, INC., a
Pennsylvania corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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NU-KOTE IMPERIAL, LTD., a Delaware corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
NU-KOTE IMAGING INTERNATIONAL, INC., a Delaware
corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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GRANTORS:
NU-KOTE HOLDING, INC., a Delaware corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
NU-KOTE INTERNATIONAL, INC., a Delaware
corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
FUTURE GRAPHICS, INC., a California corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
INTERNATIONAL COMMUNICATION MATERIALS, INC., a
Pennsylvania corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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NU-KOTE IMPERIAL, LTD., a Delaware corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
NU-KOTE IMAGING INTERNATIONAL, INC., a Delaware
corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-8-
PLEDGORS:
NU-KOTE HOLDING, INC., a Delaware corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
NU-KOTE INTERNATIONAL, INC., a Delaware
corporation
By:
-------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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