Draft Dated December 31, 1997
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GUARANTY AGREEMENT
Dated as of December 15, 1997
Among
MAIL-WELL, INC.
GRAPHIC ARTS CENTER, INC.
XXXXXXX ENVELOPE INC.
MAIL-WELL WEST, INC.
XXXXXX ENVELOPE CORPORATION
XXXXXXX XXXXXXX COMMUNICATIONS CORPORATION
WISCO ENVELOPE CORP.
WISCO II, L.L.C.
WISCO III, L.L.C.
Guarantors
MAIL-WELL I CORPORATION
Lessee
KEYBANK NATIONAL ASSOCIATION
KEY CORPORATE CAPITAL INC.
Trust Certificate Purchasers
AND
KEYBANK NATIONAL ASSOCIATION,
individually and as trustee under a Lessor Trust Agreement
dated as of December 15, 1997, as Lessor Trustee,
in respect of
MAIL-WELL I CORPORATION
Equipment Lease
Dated as of December 15, 1997
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. GUARANTEE.................................................. 2
SECTION 2. GENERAL PROVISIONS RELATING TO THE GUARANTEE............... 2
SECTION 3. SUBROGATION................................................ 5
SECTION 4. AFFIRMATIVE COVENANTS OF GUARANTY PARTIES.................. 6
Section 4.1. Maintenance of Ownership of Lessee....................... 6
Section 4.2. Financial Statements..................................... 6
Section 4.3. Certificates; Other Information.......................... 7
Section 4.4. Notices.................................................. 7
Section 4.5. Preservation of Corporate and Partnership Existence, Etc. 9
Section 4.6. Maintenance of Property.................................. 9
Section 4.7. Insurance................................................ 9
Section 4.8. Payment of Obligations................................... 9
Section 4.9. Compliance with Laws..................................... 10
Section 4.10. Inspection of Property and Books and Records............. 10
Section 4.11. Environmental Laws....................................... 10
Section 4.12. Additional Guarantors.................................... 10
Section 4.13. Credit Facility Documents................................ 11
SECTION 5. NEGATIVE COVENANTS OF THE GUARANTY PARTIES................. 11
Section 5.1. Limitation on Liens...................................... 11
Section 5.2. Disposition of Assets.................................... 13
Section 5.3. Consolidations and Mergers............................... 13
Section 5.4. Loans and Investments.................................... 14
Section 5.5. Limitation on Indebtedness............................... 15
Section 5.6. Transactions with Affiliates............................. 16
Section 5.7. Use of Proceeds.......................................... 16
Section 5.8. Contingent Obligations................................... 16
Section 5.9. Restricted Payments...................................... 17
Section 5.10. ERISA.................................................... 17
Section 5.11. Change in Business....................................... 18
Section 5.12. Change in Fiscal Year.................................... 18
Section 5.13. Minimum Consolidated Net Worth........................... 18
Section 5.14. Maximum Leverage Ratio................................... 18
Section 5.15. Minimum Interest Coverage Ratio.......................... 18
Section 5.16. Limitation on Modifications of Senior Subordinated Notes. 19
Section 5.17. Limitation on Certain Restrictions on Subsidiaries....... 19
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SECTION 6. DEFINITIONS................................................ 19
Section 6.1. Definitions.............................................. 19
Section 6.2. Interpretation........................................... 26
Section 6.3. Accounting Principles.................................... 26
SECTION 7. REPRESENTATIONS AND WARRANTIES OF GUARANTORS............... 26
SECTION 8. MISCELLANEOUS.............................................. 28
Section 8.1. Actions and Proceedings.................................. 28
Section 8.2. Binding Effect........................................... 29
Section 8.3. Xxxxxxx; Cumulative Effect............................... 29
Section 8.4. Amendments; Waivers...................................... 29
Section 8.5. Section Headings......................................... 29
Section 8.6. Severability............................................. 29
Section 8.7. Survival of Representations and Warranties............... 29
Section 8.8. Notices.................................................. 30
Section 8.9. Counterparts............................................. 30
Section 8.10. Further Assurances....................................... 30
Section 8.11. Governing Law............................................ 30
Signatures................................................................ 31
ATTACHMENTS TO GUARANTY AGREEMENT:
Schedule 5.1(a) -- Existing Liens
Schedule 5.5(b) -- Existing Indebtedness
EXHIBIT A -- Form of Acknowledgment to Guaranty Agreement
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GUARANTY AGREEMENT
Guaranty Agreement dated as of December 15, 1997 among MAIL-WELL, INC.,
a Colorado corporation (together with any permitted assigns and any
corporation which succeeds thereto by merger or consolidation or which
acquires all or substantially all of the assets thereof, "MAIL-WELL"),
GRAPHIC ARTS CENTER, INC., a Delaware corporation, XXXXXXX ENVELOPE INC., a
Washington corporation, MAIL-WELL WEST, INC., a Delaware corporation, XXXXXX
ENVELOPE CORPORATION, a Mississippi corporation, XXXXXXX XXXXXXX
COMMUNICATIONS CORPORATION, an Indiana corporation, WISCO ENVELOPE CORP., a
Tennessee corporation, WISCO II, L.L.C., a Delaware limited liability
company, and WISCO III, L.L.C., a Delaware limited liability company
(together with any permitted assigns and any corporation which succeeds
thereto by merger or consolidation or which acquires all or substantially all
of the assets thereof, the "GUARANTORS"), MAIL-WELL I CORPORATION, a Delaware
corporation (together with any permitted assigns and any corporation which
succeeds thereto by merger or consolidation or which acquires all or
substantially all of the assets thereof, the "LESSEE"), KEYBANK NATIONAL
ASSOCIATION, and KEY CORPORATE CAPITAL INC. (the "ORIGINAL TRUST CERTIFICATE
PURCHASERS" and, together with the holders from time to time of the Trust
Certificates, herein called the "CERTIFICATE HOLDERS"; and KEYBANK NATIONAL
ASSOCIATION, a national banking association, in its individual capacity and
as trustee (in such capacity, together with its successors in trust
thereunder, the "LESSOR TRUSTEE") under the Lessor Trust Agreement dated as
of December 15, 1997 between it and the Original Trust Certificate Purchasers.
WHEREAS, the Lessee, a wholly-owned subsidiary of Mail-Well, has entered
into that certain Participation Agreement dated as of December 15, 1997 (said
Participation Agreement, as the same may be amended in accordance with its
terms from time to time, the "PARTICIPATION AGREEMENT") with the Lessor
Trustee and the Original Trust Certificate Purchasers, providing for the
synthetic lease financing of certain envelope and commercial printing
equipment;
WHEREAS, the Lessor Trustee, as lessor, and the Lessee, as lessee, have
entered into that certain Equipment Lease dated as of December 15, 1997 (said
Equipment Lease, as the same may be amended and supplemented in accordance
with its terms from time to time, the "LEASE");
WHEREAS, all capitalized terms used in this Agreement shall have the
respective meanings assigned thereto in the Lease, unless otherwise defined
herein;
WHEREAS, (a) the Lessee is a Wholly Owned Subsidiary of Mail-Well, (b)
Graphic Arts Center, Inc., Xxxxxxx Envelope Inc., Mail-Well West, Inc.,
Xxxxxxx Xxxxxxx Corporation, Wisco Envelope Corp., Wisco II, L.L.C. and Wisco
III, L.L.C. are all direct or indirect Wholly Owned Subsidiaries of the
Lessee and (c) the Lessee owns 100% of the Voting Stock of Xxxxxx Envelope
Corporation, and Mail-Well and such Subsidiaries of the Lessee will benefit
from the purchase by the Lessor Trustee of the Equipment and lease by the
Lessee of such Equipment pursuant to the Lease Agreement;
MW 1997-1 Trust Guaranty Agreement
WHEREAS, it is a condition to the transactions contemplated by the
Participation Agreement that Guarantors jointly and severally guarantee,
among other things, the obligations of the Lessee under the Lessee Agreements
in favor of the Lessor Trustee, individually, as lessor under the Lease and
for the benefit of the Certificate Holders; and
WHEREAS, the Guarantors are entering into this Agreement for such
purpose and in order to induce each of the parties hereto to enter into and
to perform its obligations under the Participation Agreement and to enter
into and perform its obligations under the other Operative Agreements, if
any, to which it is a party;
NOW, THEREFORE, each of the Guarantors, jointly and severally, and the
Original Trust Certificate Purchasers and the Lessor Trustee hereby agree as
follows:
SECTION 1. GUARANTEE.
Each Guarantor, jointly and severally, does hereby unconditionally and
irrevocably guarantee, as primary obligor and not merely as surety, the
following:
(i) to the Person entitled to the payment thereof under the terms
of the respective Operative Agreements, the full and prompt payment when
due of each and every payment due from the Lessee to such Person
pursuant to the Operative Agreements, including, but not limited to,
amounts due pursuant to Section 18.4 of the Lease, Periodic Rent,
Stipulated Loss Value, Lease Balance, Purchase Price and all other
amounts of Supplemental Rent payable under the Lease;
(ii) to the Person entitled thereto under the terms of the
respective Operative Agreements, the full and prompt performance and
observance by the Lessee of each and all other covenants and agreements
not described in clause (i) above required to be performed or observed
by the Lessee under the terms of the Operative Agreements; and
(iii) the payment in Dollars, upon demand by the Lessor Trustee or
any Certificate Holder of all costs and expenses (including reasonable
attorneys' fees), as shall have been reasonably expended or incurred in
the seizure, rental or sale of the Equipment, or any part thereof, as a
result of an Event of Default or in the protection or enforcement of any
right, privilege or liability of the Lessor Trustee or any Certificate
Holder under the Operative Agreements or action in connection therewith.
SECTION 2. GENERAL PROVISIONS RELATING TO THE GUARANTEE.
(a) Each and every default in any payment or performance of any
obligation of the Lessee under the Operative Agreements shall give rise to a
separate claim and cause of action hereunder, and separate claims or suits
may be made and brought, as the case may be, hereunder as each such default
occurs.
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MW 1997-1 Trust Guaranty Agreement
(b) This Agreement shall be a continuing, absolute and unconditional
guaranty of payment and performance as aforesaid and not of collection and
shall remain in full force and effect until each and all of the obligations
of the Lessee guaranteed hereunder shall have been fully and satisfactorily
discharged in accordance with the terms and provisions of the Operative
Agreements, and each Guarantor shall have fully and satisfactorily discharged
all of its obligations under this Agreement.
(c) This Agreement and the liability of each Guarantor hereunder shall
remain in full force and effect irrespective of:
(i) the legality, validity, regularity or enforceability of the
Operative Agreements, or any of them, or of any assignment, amendment,
modification, or termination of the Operative Agreements, or any of
them, or any subleasing or further subleasing of the Equipment, and
shall in no way be affected or impaired by (and no notice to any
Guarantor shall be required in respect of) any compromise, waiver,
settlement, release, renewal, extension, indulgence, amendment,
addition, deletion, change in, modification of, or release of any
security for, any of the obligations and liabilities of the Lessee under
the Operative Agreements, or any of them, or any redelivery,
repossession, sale, transfer or other disposition, surrender or
destruction of the Equipment, in whole or part; or
(ii) the transfer, assignment, subletting or mortgaging or the
purported transfer, assignment, subletting or mortgaging of all or any
part of the interest of the Lessor Trustee, any Certificate Holder or
the Lessee in the Equipment; or
(iii) any failure of title with respect to the Lessor Trustee's, any
Certificate Holder's or the Lessee's interest in the Equipment; or
(iv) any failure, neglect or omission on the part of the Lessor
Trustee, any Certificate Holder or any other Person to give any
Guarantor notice of the occurrence of any default or event of default by
the Lessee under the Operative Agreements, or any of them, or to realize
upon any obligations or liabilities of the Lessee, or to provide for any
insurance on the Equipment, or to establish or maintain the priority or
perfection of any interest in the Equipment or any other Property
included in the Lessor Trust Estate; or
(v) any defect in the compliance with specifications, condition,
design, operation or fitness for use of, or any damage to or loss or
destruction of, or any interruption or cessation in the use of the
Equipment or any portion thereof by the Lessee or any other Person for
any reason whatsoever (including, without limitation, any governmental
prohibition or restriction, condemnation, requisition, seizure or any
other act on the part of any governmental or military authority, or any
act of God or of the public enemy) regardless of the duration thereof
(even though such duration would otherwise constitute a frustration of
the Lease), whether or not without fault on the part of the Lessee, the
Lessor Trustee, any Certificate Holder or any other Person; or
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MW 1997-1 Trust Guaranty Agreement
(vi) any merger or consolidation of the Lessee or any Guarantor
into or with any other Person or any sale, lease or transfer of any of
the assets of the Lessee or any Guarantor to any other Person; or
(vii) any change in the ownership of any shares of capital stock of
any Guarantor or the Lessee; or
(viii) any other occurrence or circumstance whatsoever, whether
similar or dissimilar to the foregoing and any other circumstance that
might otherwise constitute a legal or equitable defense or discharge of
the liabilities of a guarantor or surety or that might otherwise limit
recourse against any Guarantor.
(d) The obligation and liability of each Guarantor hereunder shall not
be impaired, diminished, abated or otherwise affected (i) by any setoff or
counterclaim that the Lessee or such Guarantor or any other Person may have
or claim to have, at any time or from time to time, (ii) by any defense that
such Guarantor or any other Person may have or claim to have, at any time or
from time to time that is not available to the Lessee, PROVIDED that in no
event may a Guarantor assert any defense (A) arising from the bankruptcy or
insolvency of the Lessee, (B) based on the corporate status of the Lessee,
(C) based on the power, authority and capacity of the Lessee to enter into
and perform any of the Operative Agreements to which it is a party, (D) based
on the legal, valid and binding nature of the Lessee's obligations under the
Operative Agreements to which it is a party, or (E) expressly waived
hereunder, or (iii) by the commencement by or against the Lessee or such
Guarantor or any other Person of any proceedings under any bankruptcy or
insolvency law or laws relating to the relief of debtors, readjustment of
indebtedness, reorganizations, arrangements, compositions or extension or
other similar laws.
(e) It is the intent and purpose hereof that no Guarantor shall be
entitled to and each Guarantor does hereby waive, to the fullest extent
permitted by Applicable Law, any and all defenses available to guarantors,
sureties and other secondary parties at law or in equity. Without limiting
the generality of the foregoing, each Guarantor hereby waives notice of
acceptance of this Agreement and of the nonperformance by the Lessee,
diligence, presentment, protest, dishonor, demand for payment from the Lessee
or any other Person and notice of nonpayment or failure to perform on the
part of the Lessee and all other notices whatsoever. The guarantee hereunder
is a guarantee of payment, performance and compliance and not of
collectibility. In order to hold any Guarantor liable hereunder, there shall
be no obligation on the part of the Lessor Trustee or any Certificate Holder
at any time to demand or resort for payment or performance to the Lessee, to
any other Guarantor or to any other Person, its properties or assets or to
any security, property or other rights or remedies whatsoever, nor shall
there be any requirement that the Lessee or any other Person be joined as
parties to any proceeding for the enforcement of any provision of this
Agreement, and the Lessor Trustee, each Certificate Holder, and each other
Person entitled to receive payments or the benefit of performance guaranteed
hereunder shall have the right to enforce this Agreement irrespective of
whether or not legal proceedings or other enforcement efforts against the
Lessee are pending, seeking resort to or realization upon or from any of the
foregoing. Without limiting the foregoing, it is understood that repeated
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MW 1997-1 Trust Guaranty Agreement
and successive demands may be made and recoveries may be had hereunder as and
when, from time to time, the Lessee shall default under the terms of the
Operative Agreements, and that, notwithstanding recovery hereunder for or in
respect of any such default, this Agreement shall remain in force and effect
and shall apply to each and every subsequent default. Each Guarantor further
agrees that, without limiting the generality of this Agreement, if any Event
of Default shall have occurred and be continuing and the Lessor Trustee (or
any assignee thereof) is prevented by Applicable Law from exercising its
remedies under Section 16.2 of the Lease, the Lessor Trustee (or any assignee
thereof) shall be entitled to receive hereunder from such Guarantor, upon
demand therefor, the sums which would have otherwise been due from the Lessee
had such remedies been exercised. So long as the Lessee shall not have fully
paid, performed or discharged all of its obligations under the Operative
Agreements, any claim which any Guarantor shall have against the Lessee or
any other Person by reason of any payment to the Lessor Trustee, any
Certificate Holder or any other Person pursuant to this Agreement shall not
be asserted or enforced or collected as against (or to the detriment of) the
Lessee (including without limitation, any liquidator, trustee in bankruptcy,
assignee for the benefit of creditors or receiver of property or assets of
the Lessee), the Lessor Trustee, any Certificate Holder or such Person in any
action, suit or proceeding.
(f) No act or omission of any kind or at any time on the part of the
Lessor Trustee, any Certificate Holder or any other Person in respect of any
matter whatsoever including, without limitation, any omission in performance
of their respective obligations under the Operative Agreements, shall in any
way affect or impair the guarantee hereunder, save for an express written
waiver or variation of its terms, which shall be effective only with respect
to the Person granting the same and its successors and assigns.
(g) The guarantee hereunder shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the obligations hereunder or under the Operative Agreements is
rescinded or must otherwise be restored or returned by the Lessor Trustee or
any Certificate Holder upon the insolvency, bankruptcy or reorganization of
the Lessee, or otherwise, all as though such payment had not been made.
(h) If any Guarantor fails to pay any amount hereunder when due, such
Guarantor shall pay interest, on demand, on such amount at the Late Rate, to
the Person entitled thereto. Each Guarantor, jointly and severally, further
agrees to pay to any party hereto any and all reasonable out-of-pocket costs
and expenses, including legal fees, incurred by such party in connection with
enforcing its rights under this Agreement.
SECTION 3. SUBROGATION.
Each Guarantor hereby acknowledges and agrees that any rights of such
Guarantor hereunder, whether by way of subrogation or otherwise, may not be
enforced until all amounts due from the Lessee under the Operative Agreements
shall have been paid in full to the parties entitled thereto. Each Guarantor
agrees (i) not to take any action to hinder or delay the exercise of any
right or remedy granted under the Operative Agreements or any Applicable Law
to the Lessor Trustee in respect of the Equipment or any other Property
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MW 1997-1 Trust Guaranty Agreement
included in the Lessor Trust Estate or the guarantee hereunder or to the
Lessor Trustee or any Certificate Holder under the Operative Agreements or
the guarantee hereunder, and (ii) not to exercise or pursue any rights,
remedies, powers, privileges or benefits of any kind hereunder (whether
available to such Guarantor hereunder or at law or in equity) until such time
as all obligations owing from the Lessee under the Operative Agreements have
been paid in full to the parties entitled thereto.
SECTION 4. AFFIRMATIVE COVENANTS OF GUARANTY PARTIES.
Each Guaranty Party hereby covenants and agrees that:
SECTION 4.1. MAINTENANCE OF OWNERSHIP OF LESSEE. Unless otherwise
consented to in writing by the Lessor Trustee, Mail-Well will be and remain,
directly or indirectly, the owner of 100% of the shares of each and every
issued and outstanding class of voting capital stock of each of the Lessee or
any of its successors not prohibited under this Agreement or the Operative
Agreements (other than any shares held by Xxxxx X. Xxxxx, Xx. upon conversion
pursuant to a Plan of Reorganization and Stock Purchase Agreement dated June
20, 1997 by and among Mail-Well, the Lessee, Xxxxxx Envelope Holdings, Inc.,
Xxxxxx Envelope Corporation and the former shareholders of Xxxxxx Envelope
Corporation of shares he holds of Xxxxxx Envelope Corporation, provided that
such shares shall not exceed 20% of the shares of each such class of voting
capital stock of the Lessee or any such successors, and Mail-Well will keep
itself informed with respect to, and apprised of, the operations and
financial condition of the Lessee.
SECTION 4.2. FINANCIAL STATEMENTS. Mail-Well shall deliver to each
Certificate Holder, in form and detail satisfactory to such Certificate
Holder:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of Mail-Well, a copy of the audited consolidated
and consolidating balance sheets of Mail-Well and its Subsidiaries as at
the end of such year and the related consolidated and consolidating
statements of income or operations, shareholders' equity and cash flows
for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of
a nationally recognized independent public accounting firm ("INDEPENDENT
AUDITOR") which report shall state that such consolidated and
consolidating financial statements present fairly the financial position
for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years, and together with SEC Form 10Ks for each
Subsidiary of Mail-Well required to file such form with the SEC. The
Independent Auditor's opinion shall not be qualified or limited because
of a restricted or limited examination by the Independent Auditor of any
material portion of Mail-Well's or any such Subsidiary's records; and
(b) as soon as available and in any event within 45 days after the
end of each fiscal quarter of Mail-Well, a copy for the immediately
preceding fiscal quarter of the unaudited consolidated balance sheets of
Mail-Well and its Subsidiaries as of the end of such quarter and the
related consolidated statements of income, shareholders' equity
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MW 1997-1 Trust Guaranty Agreement
and cash flows for the period commencing on the first day and ending on
the last day of such quarter, and certified by a Responsible Officer as
fairly presenting, in accordance with GAAP (subject to ordinary, good
faith year-end audit adjustments), the financial position and the
results of operations of Mail-Well and its Subsidiaries, together with
SEC Form 10Qs for each Subsidiary of Mail-Well required to file such
form with the SEC.
SECTION 4.3. CERTIFICATES; OTHER INFORMATION. Mail-Well shall furnish
to each Certificate Holder:
(a) concurrently with the delivery of the financial statements
referred to in Sections 4.2(a) and (b), a Compliance Certificate
executed by a Responsible Officer of Mail-Well;
(b) except for SEC Forms 10K and 10Q to be delivered pursuant to
Sections 4.2(a) and (b), promptly, and in any event no later than 10
days after the same is made available to Mail-Well's or any of its
Subsidiaries' shareholders or is filed with the SEC, copies of all
financial statements and reports that Mail-Well or any Subsidiary of
Mail-Well sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports that Mail-Well or
any Subsidiary of Mail-Well may make to, or file with, the SEC;
(c) upon the request from time to time of the Lessor Trustee, the
Swap Termination Values, together with a description of the method by
which such values were determined, relating to any then-outstanding Swap
Contracts to which Mail-Well or any of its Subsidiaries is party;
(d) at any time when the Lessee is not subject to Section 13 or
15(d) of the Exchange Act and is not exempt from reporting pursuant to
Rule 12g3-2(b) under the Exchange Act, upon the request of a Certificate
Holder, the Lessee shall promptly furnish or cause to be furnished Rule
144A Information to such Certificate Holder, to a prospective purchaser
of such Trust Certificate designated by such Certificate Holder or to
the Lessor Trustee for delivery to such Certificate Holder or a
prospective purchaser designated by such Certificate Holder, as the case
may be, in order to permit compliance by such Certificate Holder with
Rule 144A under the Securities Act in connection with the resale of such
Trust Certificate by such Certificate Holder; and
(e) promptly, such additional information regarding the business,
operations, assets, properties or financial or corporate affairs of
Mail-Well, the Lessee or any Subsidiary or relating to the ability of
Mail-Well, the Lessee or any of its Subsidiaries to perform their
respective obligations under the Operative Agreements as any Certificate
Holder, may from time to time reasonably request.
SECTION 4.4. NOTICES. The Guaranty Parties shall promptly notify the
Lessor Trustee and each Certificate Holder of:
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(a) the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeably
will become a Default or Event of Default;
(b) any matter that has resulted or could reasonably result in a
Material Adverse Effect on Mail-Well and its Subsidiaries, including:
(i) breach or non-performance of, or any default under, a Contractual
Obligation of any Guaranty Party or any Subsidiary of a Guaranty Party;
(ii) any dispute, litigation, investigation, proceeding or suspension
between any Guaranty Party or any Subsidiary of a Guaranty Party and any
Governmental Authority; (iii) the commencement of, or any material
development in, any litigation or proceeding affecting any Guaranty
Party or any Subsidiary of a Guaranty Party, including pursuant to any
applicable Environmental Laws; or (iv) the imposition of any fine or
penalty by any Governmental Authority against or with respect to any
facility or plants of any Guaranty Party or any Subsidiary of a Guaranty
Party;
(c) the occurrence of any of the following events affecting any
Guaranty Party or any ERISA Affiliate (but in no event more than 10 days
after such event), and deliver to the Lessor Trustee and each
Certificate Holder a copy of any notice with respect to such event that
is filed with a Governmental Authority and any notice delivered by a
Governmental Authority to any Guaranty Party or any ERISA Affiliate with
respect to such event:
(i) an ERISA Event;
(ii) an increase in the Unfunded Pension Liability of any Pension
Plan, including as a result of the adoption of any amendment to a Plan
subject to Section 412 of the Code, that could reasonably be likely to
cause or result in an Event of Default under Section 16.1(k) of the Lease;
or
(iii) the adoption of, or the commencement of contributions to,
any Plan subject to Section 412 of the Code by any Guaranty Party or any
ERISA Affiliate other than any such Plan in effect and receiving
contributions as of the Closing Date.
(d) any Acquisition, or incurrence of any Contractual Obligations
with respect to any Acquisition, by the Lessee or any Subsidiary of the
Lessee, if the aggregate cash and noncash consideration (including
assumption of liabilities and including all Contingent Obligations) in
connection with such Acquisition is (or could reasonably be expected to
become) $10,000,000 or more; and
(e) any Change in Control or any event or circumstance that is
reasonably likely to result in any Change in Control; and
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating
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what action any Guarantor, the Lessee or any affected Subsidiary of any
Guaranty Party proposes to take with respect thereto and at what time. Each
notice under Section 4.4(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Operative Agreement that
have been (or foreseeably will be) breached or violated.
SECTION 4.5. PRESERVATION OF CORPORATE AND PARTNERSHIP EXISTENCE, ETC.
Each Guaranty Party (other than Mail-Well) shall, and shall cause each of its
Subsidiaries to:
(a)(i) preserve and maintain in full force and effect (A) its
corporate or partnership existence, as the case may be, and good
standing under the laws of its state or jurisdiction of incorporation or
organization, and (B) all governmental rights, privileges,
qualifications, permits, licenses and franchises necessary or desirable
in the normal conduct of its business; and (ii) use reasonable efforts,
in the ordinary course of business, to preserve its business
organization and goodwill; PROVIDED HOWEVER, that the foregoing shall
not prevent any transaction permitted by Section 5.2 or 5.3, or the
termination of the existence of any Subsidiary of Mail-Well (other than
the Lessee) if, in the opinion of the Board of Directors of Mail-Well,
such termination is in the best interest of the Lessee and is not
otherwise prohibited by this Agreement; and
(b) preserve or renew and maintain all of its registered patents,
trademarks, trade names and service marks and other intellectual
property assets, the nonpreservation or nonmaintenance of which could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.6. MAINTENANCE OF PROPERTY. Each Guaranty Party (other than
Mail-Well) shall maintain, and shall cause each of its Subsidiaries to
maintain and preserve all its property which is used or useful in its
business in good working order and condition, ordinary wear and tear excepted
and make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect. Each Guaranty Party (other than Mail-Well) shall
use the standard of care typical in the industry in the operation and
maintenance of its facilities.
SECTION 4.7. INSURANCE. Each Guaranty Party shall maintain, and shall
cause each of its Subsidiaries to maintain, with financially sound and
reputable independent insurers, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business of such types and in such
amounts as are customarily carried under similar circumstances by such other
Persons.
SECTION 4.8. PAYMENT OF OBLIGATIONS. Each Guaranty Party (other than
Mail-Well) shall, and shall cause each of its Subsidiaries to, pay and
discharge as the same shall become due and payable, all their respective
material obligations and liabilities, including:
(a) all material tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same
are being contested in good faith by
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appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by such Guaranty Party or such Subsidiary;
(b) all lawful material claims which, if unpaid, would by law
become a Lien upon its property; and
(c) all Indebtedness, as and when due and payable (but subject to
any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness), unless contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by such Guaranty Party or such Subsidiary, except
to the extent that the nonpayment thereof would not result in or
reasonably be expected to result in a Material Adverse Effect.
SECTION 4.9. COMPLIANCE WITH LAWS. Each of the Guaranty Parties shall
comply, and shall cause each of its Subsidiaries to comply, in all respects
with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business or properties (including the Federal
Fair Labor Standards Act), unless such noncompliance is being contested in
good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by such Guaranty Party or such Subsidiary with
respect thereto, except to the extent any such noncompliance, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.10. INSPECTION OF PROPERTY AND BOOKS AND RECORDS. Each of
the Guaranty Parties (other than Mail-Well) shall maintain and shall cause
each of its Subsidiaries to maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP shall be made of
all financial transactions and matters involving the assets and business of
such Guaranty Party and such Subsidiary. Each of the Guaranty Parties shall
permit, and shall cause each of its Subsidiaries to permit, representatives
and independent contractors of the Lessor Trustee or any Certificate Holder
to visit and to inspect any of their respective properties, to examine their
respective corporate, financial and operating records, and to make copies
thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and
independent public accountants at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to such Guaranty Parties; PROVIDED, HOWEVER, when an Event of
Default exists the Lessor Trustee or any Certificate Holder may do any of the
foregoing at the expense of such Guaranty Parties at any time during normal
business hours and without advance notice.
SECTION 4.11. ENVIRONMENTAL LAWS. Each Guaranty Party shall, and shall
cause each of its Subsidiaries to, conduct its operations and keep and
maintain its property in compliance with all Environmental Laws, if any
noncompliance, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
SECTION 4.12. ADDITIONAL GUARANTORS. It is contemplated that, pursuant
to Section 20.1 of the Lease, each Person which becomes a Material Subsidiary
shall promptly enter into this Guaranty Agreement and, to effect the same,
shall execute an acknowledgment in the form
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of Annex 1 attached hereto. Thereupon such Person shall be treated as a
Guarantor for all purposes of this Guaranty Agreement and shall be jointly
and severally liable for all Obligations guaranteed pursuant to the terms
hereof.
SECTION 4.13. CREDIT FACILITY DOCUMENTS. The Lessee agrees that, not
later than five Business Days following the execution and delivery of the
Credit Facility Documents, it shall deliver, or cause to be delivered, to the
Lessor Trustee and each Certificate Holder true and correct copies of each of
the Credit Facility Documents. If the Lessor Trustee determines that the
Credit Facility Documents contain covenants, defaults, remedies or other
terms that are more restrictive than the covenants, defaults, remedies and
other terms contained in the Operative Agreements, the Guaranty Parties agree
that, not later than 30 days following a request of the Lessor Trustee, they
shall amend the Operative Agreements so that the covenants, defaults,
remedies and other terms contained in the Operative Agreements are no less
restrictive than those contained in the Credit Facility Documents.
SECTION 5. NEGATIVE COVENANTS OF THE GUARANTY PARTIES.
Each Guarantor Party hereby covenants and agrees that:
SECTION 5.1. LIMITATION ON LIENS. The Guaranty Parties (other than
Mail-Well) shall not, and shall not suffer or permit any of their
Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("PERMITTED
LIENS"):
(a) any Lien existing on property of any of such Guaranty Party or
any of its respective Subsidiaries on the Closing Date securing
Indebtedness outstanding on the Closing Date and disclosed in
Schedule 5.1(a);
(b) any Lien created under any Operative Agreement, the Accounts
Receivable Securitization Facility Documents and the Equipment Lease
Facility Documents;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the
extent that nonpayment thereof is permitted by Section 4.8(a), PROVIDED
that no notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of
business which are not delinquent or remain payable without penalty or
which are being contested in good faith and by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of
the property subject thereto;
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(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation;
(f) Liens on the property of any such Guaranty Party or its
Subsidiaries securing (i) the nondelinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations,
(ii) contingent obligations on surety and appeal bonds, and (iii) other
nondelinquent obligations of a like nature; in each case, incurred in the
ordinary course of business;
(g) Liens consisting of judgment or judicial attachment liens,
PROVIDED that the enforcement of such Liens is effectively stayed and all
such liens in the aggregate at any time outstanding for the Guaranty
Parties and their respective Subsidiaries do not exceed $2,500,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the businesses of the Guaranty
Parties and their respective Subsidiaries;
(i) Liens on assets acquired after the date of this Agreement as
permitted by Section 5.4(e); PROVIDED, HOWEVER, that such Liens existed at
the time the respective assets were acquired and were not created in
anticipation thereof;
(j) purchase money security interests on any property acquired or
held by any of the Guaranty Parties or their respective Subsidiaries in the
ordinary course of business, securing Indebtedness incurred or assumed for
the purpose of financing all or any part of the cost of acquiring such
property; PROVIDED that (i) any such Lien attaches to such property
concurrently with or within 20 days after the acquisition thereof,
(ii) such Lien attaches solely to the property so acquired in such
transaction, (iii) the principal amount of the Indebtedness secured thereby
does not exceed 100% of the cost of such property, and (iv) the principal
amount of the Indebtedness secured by any and all such purpose money
security interests shall not at any time exceed, together with Indebtedness
permitted under Section 5.5(c), $15,000,000;
(k) Liens securing obligations in respect of Capital Leases on assets
subject to such leases, PROVIDED that such Capital Leases are otherwise
permitted hereunder;
(l) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights
and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; PROVIDED that (i) such deposit account is
not a dedicated cash collateral account and is not
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subject to restrictions against access by any of the Guaranty Parties in
excess of those set forth by regulations promulgated by the FRB, and
(ii) such deposit account is not intended by any of the Guaranty Parties
or any of their respective Subsidiaries to provide collateral to the
depository institution; and
(m) Liens arising pursuant to Section 412(n) of the Code or
Section 4069(a) of ERISA if (i) the delinquent payments to which the Lien
relates are made within ten (10) days after any Guaranty Party or any
Subsidiary of any Guaranty Party learns of the failure to make payment or
(ii) the obligation to make such payments is being contested in good faith
and by appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of the Guaranty Party in accordance with GAAP.
SECTION 5.2. DISPOSITION OF ASSETS. The Guaranty Parties (other than
Mail-Well) shall not, and shall not suffer or permit any of their
Subsidiaries to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any property (including accounts and notes receivable, with or without
recourse) or enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to
the purchase price of such replacement equipment;
(c) sales or assignments of undivided percentage interests in certain
accounts receivable pursuant to the Accounts Receivable Securitization
Documents, so long as the aggregate financing amount payable from such
accounts receivable does not exceed $150,000,000; and
(d) dispositions not otherwise permitted hereunder which are made
for fair market value (including sales pursuant to sale-leaseback
transactions); PROVIDED that (i) at the time of any disposition, no
Default or Event of Default shall exist or shall result from such
disposition, (ii) the aggregate sales price from such disposition shall
be paid in cash, and (iii) the aggregate value of all assets so sold by
the Guaranty Parties and their respective Subsidiaries, together, shall
not exceed in any 12-month period ten percent (10%) of Consolidated
Total Assets as of the end of the immediately preceding fiscal year of
the Lessee.
SECTION 5.3. CONSOLIDATIONS AND MERGERS. The Guaranty Parties (other
than Mail-Well) shall not, and shall not suffer or permit any of their
Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except:
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(a) any Subsidiary of the Lessee may merge with (i) the Lessee,
PROVIDED that the Lessee shall be the continuing or surviving corporation,
or (ii) any one or more Subsidiaries of the Lessee, PROVIDED that if any
transaction shall be between a Subsidiary of the Lessee and a Wholly Owned
Subsidiary of the Lessee, the Wholly Owned Subsidiary of the Lessee shall
be the continuing or surviving corporation; and
(b) any Subsidiary of the Lessee may merge with any other Person
(other than the Lessee or a Wholly Owned Subsidiary of the Lessee),
PROVIDED that (i) such Subsidiary shall be the continuing or surviving
corporation and (ii) immediately prior to and immediately after giving
effect to such transaction, no Default shall have occurred, whether as a
result of such consolidation or merger or otherwise; and
(c) any Subsidiary of the Lessee may sell all or substantially all of
its assets (upon voluntary liquidation or otherwise), to the Lessee.
SECTION 5.4. LOANS AND INVESTMENTS. The Guaranty Parties (other than
Mail-Well) shall not purchase or acquire, or suffer or permit any of their
Subsidiaries to purchase or acquire, or make any commitment therefor, any
capital stock, equity interest, or any obligations or other securities of, or
any interest in, any Person, or make or commit to make any Acquisitions, or
make or commit to make any advance, loan, extension of credit or capital
contribution to or any other investment in, or joint venture with, any Person
including any Affiliate of any of the Guaranty Parties (together,
"INVESTMENTS") except for:
(a) Investments held by a Guaranty Party or its Subsidiaries in the
form of cash equivalents or short term marketable securities;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in the
ordinary course of business of a Guaranty Party or its Subsidiaries;
(c) Investments not otherwise prohibited by this Agreement or any of
the other Operative Agreements by a Guaranty Party or its Subsidiaries in a
Guaranty Party (other than Mail-Well) or its Subsidiaries;
(d) extensions of credit by a Guaranty Party or its Subsidiaries to
any of their respective Wholly Owned Subsidiaries, or by any of such Wholly
Owned Subsidiaries to another such Wholly Owned Subsidiary;
(e) Investments not otherwise permitted pursuant to subsections (a),
(b), (c) or (d) of this Section in, or acquisitions of, Persons or the
assets of Persons engaged in other lines of business substantially similar
or related to the lines of business of the Lessee or its Subsidiaries,
PROVIDED that at the time of any such Investment or acquisition and at the
time that the Lessee, or any Subsidiary incurs any Contractual Obligation
with respect to any such Investment or acquisition:
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(i) no Default or Event of Default shall have occurred and be
continuing or result therefrom; and
(ii) recalculations are made by the Lessee (based on audited financial
statements (or unaudited financial statements in the case of acquired
entities which are divisions of public companies with audited consolidated
financial statements) from the acquired entities confirming the historical
results with adjustments to exclude certain non-recurring expenses (such as
owners' salaries) of the acquired company as determined by the Lessor
Trustee) of compliance with the covenants contained in Section 5.13, 5.14
and 5.15 for the calculation period on a pro forma basis as if the
respective acquisition had occurred on the first day of such calculation
period, and such recalculations shall show that all such covenants would
have been complied with throughout the calculation period if the
acquisition had occurred on the first day of such calculation period.
(f) Investments constituting Permitted Swap Obligations or payments
or advances under Swap Contracts relating to Permitted Swap Obligations;
and
(g) additional Investments after the Closing Date not to exceed, on
any date of determination, an amount equal to $40,000,000 plus 50% of the
increase in the Consolidated Net Worth of the Lessee and its Subsidiaries
from December 31, 1997 to the last day of the fiscal quarter of the Lessee
then ended for which financial statements have been delivered to the Lessor
Trustee; PROVIDED that no Default or Event of Default shall have occurred
and be continuing or result therefrom.
SECTION 5.5. LIMITATION ON INDEBTEDNESS. The Guaranty Parties (other
than Mail-Well) shall not, and shall not suffer or permit any Subsidiary to,
create, incur, assume, suffer to exist, or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to the Operative Agreements;
(b) Indebtedness existing on the Closing Date and set forth in
Schedule 5.5(b) and any extensions and renewals of such Indebtedness on
terms otherwise permitted pursuant to this Agreement, so long as the
principal amount is not increased, additional collateral is not given and
unsecured Indebtedness is not made secured Indebtedness;
(c) Indebtedness secured by Xxxxx permitted by Section 5.1(j) in an
aggregate amount outstanding not to exceed $15,000,000;
(d) Indebtedness owing by any Guaranty Party to any other Guaranty
Party (other than Mail-Well) (including Intercompany Subordinated Debt)
that is not otherwise prohibited by this Agreement or any of the other
Operative Agreements;
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(e) Indebtedness arising as a consequence of Investments permitted
pursuant to Section 5.4(d);
(f) Indebtedness of the Lessee and its Subsidiaries owing under
the Senior Subordinated Note Documents;
(g) Indebtedness owing under the Accounts Receivable
Securitization Facility Documents and permitted under Section 5.2(c);
(h) Indebtedness incurred pursuant to the Credit Facility
Documents in an aggregate amount not to exceed $300,000,000; and
Indebtedness incurred pursuant to the Equipment Lease Facility
Documents, PROVIDED THAT the aggregate amount of all Indebtedness
incurred pursuant to the Equipment Lease Facility Documents and all
Indebtedness permitted under Section 5.6(a) does not exceed $60,000,000;
(i) liabilities of the Lessee in respect of unfunded vested
benefits under any Plan to the extent that the existence of such
liabilities will not constitute, cause or result in a Default or Event
of Default;
(j) Indebtedness owing under any seller financing arrangements to
the extent otherwise permitted under Sections 5.1 and 5.8; and
(k) additional unsecured Indebtedness, so long as no Default or
Event of Default exists or arises as a result of borrowing thereunder.
SECTION 5.6. TRANSACTIONS WITH AFFILIATES. The Guaranty Parties (other
than Mail-Well) shall not, and shall not suffer or permit any of their
Subsidiaries to, enter into any transaction with any Affiliate of such
Guaranty Party, except upon fair and reasonable terms no less favorable to
such Guaranty Party or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of such Guaranty
Party or such Subsidiary.
SECTION 5.7. USE OF PROCEEDS. The Lessee shall not, and shall not
suffer or permit any Subsidiary to, use any portion of the Advances, directly
or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Lessee or any Subsidiary or others
incurred to purchase or carry Margin Stock, or (iii) to extend credit for the
purpose of purchasing or carrying any Margin Stock.
SECTION 5.8. CONTINGENT OBLIGATIONS. The Guaranty Parties (other than
Mail-Well) shall not, and shall not suffer or permit any Subsidiary of a
Guaranty Party to, create, incur, assume or suffer to exist any Contingent
Obligations except:
(a) endorsements for collection or deposit in the ordinary course
of business;
(b) Permitted Swap Obligations;
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(c) Guaranty Obligations of the Guaranty Parties incurred with
respect to any Indebtedness of any other Guaranty Party or its
Subsidiaries, PROVIDED THAT such Guaranty Obligation is otherwise
permitted under Section 5.5;
(d) Contingent Obligations with respect to Surety Instruments
incurred in the ordinary course of business and which otherwise
constitute Indebtedness permitted pursuant to Section 5.5; and
(e) Guaranty Obligations incurred in the ordinary course of
business which otherwise constitute Indebtedness permitted pursuant to
Section 5.5 and which do not exceed in aggregate principal amount
$20,000,000.
SECTION 5.9. RESTRICTED PAYMENTS. The Lessee shall not declare or make
any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any shares of any class of
its capital stock, or purchase, redeem or otherwise acquire for value any
shares of its capital stock or any warrants, rights or options to acquire
such shares, now or hereafter outstanding; except that the Lessee may (as
long as the Lessee is in PRO FORMA compliance with this Agreement):
(a) declare and make dividend payments or other distributions
payable solely in its common stock;
(b) purchase, redeem or otherwise acquire shares of its common
stock or warrants or options to acquire any such shares with the
proceeds received from the substantially concurrent issue of new shares
of its common stock;
(c) declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire shares of its capital stock or
warrants, rights or options to acquire any such shares for cash,
PROVIDED that, immediately after giving effect to such proposed action,
no Default or Event of Default would exist; and
(d) declare or pay cash dividends to pay its operating expenses
incurred in the ordinary course of business and other corporate overhead
costs and expenses.
SECTION 5.10. ERISA. The Guaranty Parties (other than Mail-Well) shall
not, and shall not suffer or permit any of its ERISA Affiliates to: (a)
engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan; (b) cause or permit any Plan
which is qualified under subsection 401(a) of the Code to lose such
qualification; or (c) fail to make all required contributions to any Plan
subject to subsection 412 of the Code; but only to the extent that any such
act or failure to act, separately or together with all other such acts or
failure to act, in any of the foregoing clauses (a), (b) or (c) has resulted
or could reasonably be expected to result in liability of the Guaranty
Parties in an aggregate amount in excess of $1,000,000; or (d) engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
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SECTION 5.11. CHANGE IN BUSINESS. Except as permitted pursuant to
Section 5.4, the Lessee shall not, and shall not suffer or permit any of its
Subsidiaries to, engage in any material line of business substantially
different from those lines of business carried on by the Lessee and its
respective Subsidiaries on the date hereof, including as a consequence of any
Acquisition.
SECTION 5.12. CHANGE IN FISCAL YEAR. Mail-Well shall not change its
fiscal year or the fiscal year of any of its consolidated Subsidiaries.
SECTION 5.13. MINIMUM CONSOLIDATED NET WORTH. The Lessee shall not
permit, as of the last day of any fiscal quarter of the Lessee, Consolidated
Net Worth to be less than the sum of:
(a) 85% of Consolidated Net Worth as of September 30, 1997, PLUS
(b) 50% of Consolidated Net Income from September 30, 1997 through
the end of each fiscal quarter of the Lessee thereafter, determined
quarterly on a consolidated basis and not reduced by any Consolidated
Net Loss, PLUS
(c) 75% of the Net Securities Proceeds arising on or after
September 30, 1997 to the date of determination.
As used herein, "NET SECURITIES PROCEEDS" means, with respect to any sale or
issuance of equity securities (whether common or preferred, options, warrant
or capital appreciation rights, but excluding any sales or issuances of stock
pursuant to employee stock purchase plans, employee stock option plans or
other employee benefit plans), the excess of (A) the gross cash and, to the
extent acceptable to the Lessor Trustee and the Certificate Holders, noncash
proceeds received or receivable by the Lessee or any of its Subsidiaries from
such disposition MINUS (B) the sum of (i) all reasonable Attorney Costs and
underwriting and accounting fees and disbursements and government fees
actually paid (or reasonably expected to be paid during the fiscal year of
the Lessee in which such sale or issuance occurs) in connection with such
sale or issuance which are not payable to Lessee or to any Affiliate of
Lessee or any of its Subsidiaries; and (ii) all taxes actually paid in
connection with such sale or issuance.
SECTION 5.14. MAXIMUM LEVERAGE RATIO. The Lessee shall not permit, as
of the last day of any fiscal quarter of the Lessee, the Leverage Ratio to
exceed 3.75 to 1:00; PROVIDED, HOWEVER, the Leverage Ratio shall be reduced
to 3.25 to 1.00 on the earlier to occur of (a) the fourth anniversary of the
Closing Date or (b) the repayment of any portion of the principal on the
Intercompany Subordinated Debt or the making of any restricted payment
permitted pursuant to Section 5.9 (other than restricted payments pursuant to
clause (d) thereof).
SECTION 5.15. MINIMUM INTEREST COVERAGE RATIO. The Lessee shall not
permit, as of the last day of any fiscal quarter of the Lessee, the ratio of
(a) EBIT, measured for the period consisting of the four consecutive fiscal
quarters of the Lessee ending on such day, to
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(b) the sum of Interest Expense, measured for such period, which were
deductible in determining Consolidated Net Income or Consolidated Net Loss
for such period, to be less than 2.00 to 1.00. For purposes of calculating
compliance with this Section 5.15, amounts that would be included in either
EBIT or Interest Expense on account of any Acquisitions made by any of the
Lessee or its Subsidiaries after September 30, 1997 will be excluded unless
the Lesser Trustee and the Certificate Holders have been provided with
independent verification of such historical results.
SECTION 5.16. LIMITATION ON MODIFICATIONS OF SENIOR SUBORDINATED NOTES;
MODIFICATION OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN OTHER
AGREEMENTS; ETC. The Lessee shall not and shall not permit any of its
Subsidiaries to (i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value of,
or any prepayment or redemption as a result of any asset sale, change of
control or similar event of, any Senior Subordinated Notes (other than such
payments which are funded by equity contributions from Mail-Well) or amend or
modify, or permit the amendment or modification of, any provision of the
Senior Subordinated Notes or any agreement (including, without limitation,
any Senior Subordinated Note Document) relating thereto, (ii) amend, modify
or change the Equipment Lease Facility Documents, the Credit Facility
Documents or the Accounts Receivable Securitization Facility Documents or
(iii) amend, modify or change its Certificate of Incorporation (including
without limitation, by the filing or modification of any certificate of
designation) or By-Laws, other than any amendments, modifications or changes
pursuant to this clause (iii) which do not in any way adversely affect the
interest of the Certificate Holders.
SECTION 5.17. LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The
Lessee will not and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any Subsidiary which is not
a Material Subsidiary to (a) pay dividends or make any other distributions on
its capital stock or any other interest or participation in its profits owned
by the Lessee or any of its Subsidiaries, or pay any Indebtedness owed to the
Lessee or any Subsidiary of the Lessee, (b) make loans or advances to the
Lessee for any Subsidiary of the Lessee or (c) transfer any of its properties
or assets to the Lessee, except for such encumbrances or restrictions
existing under or by reason of (i) Applicable Law, (ii) customary provisions
restricting subletting or assignment of any lease governing a leasehold
interest of the Lessee or a Subsidiary of the Lessee and (iii) customary
provisions restricting assignment of any licensing agreement entered into by
the Lessee or a Subsidiary of the Lessee in the ordinary course of business.
SECTION 6. DEFINITIONS.
SECTION 6.1. DEFINITIONS. For purposes of this Agreement the following
terms shall have the respective meanings assigned thereto:
"ACCOUNTS RECEIVABLE SECURITIZATION FACILITY DOCUMENTS" means that
certain (a) Pooling and Servicing Agreement dated as of November 15, 1996,
among MTRC, the Lessee and Norwest Bank Colorado, National Association
("NORWEST"), as Trustee, (b)
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Series 1996-1 Supplement to Pooling and Servicing Agreement dated as of
November 15, 1996, among MTRC, the Lessee and Norwest, as Trustee, (c) Series
1996-1 Asset Purchase Agreement dated as of November 15, 1996, among
Corporate Receivables Corporation, the "Liquidity Providers" specified
therein, Citicorp North America, Inc., Banque Paribas, New York Branch and
Norwest, as Trustee, (d) Series 1996-1 Certificate Purchase Agreement dated
as of November 15, 1996, among MTRC, Corporate Receivables Corporation,
Norwest, as Trustee, and the Lessee, (e) Purchase and Contribution Agreement
dated as of November 15, 1996, between the Lessee, Wisco Envelope Corp.,
Xxxxx Envelope and Tag Corp., Mail-Well West, Inc., Wisco II, L.L.C.,
Mail-Well Canada Holdings, Inc., Graphic Arts Center, Inc., Wisco III,
L.L.C., Supremex Inc., Innova Envelope Inc. and MTRC, (f) Accounts Receivable
Securitization Facility Intercreditor Agreement, and (g) any and all
agreements, documents and instruments executed or delivered pursuant to or in
connection with the agreements referred to in clauses (a) through (f)
preceding.
"ACQUISITION" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a)
the acquisition of all or substantially all of the assets of a Person, or of
any business or division of a Person, (b) the acquisition of in excess of 50%
of the capital stock, partnership interests, membership interests or equity
of any Person, or otherwise causing any Person to become a Subsidiary, (c)
the power to elect, appoint, or cause the election or appointment of at least
a majority of the members of the board of directors or similar governing body
of such Person, or (d) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary) PROVIDED that
the Lessee or its Subsidiary is the surviving entity.
"ATTORNEY COSTS" means and includes all fees and disbursements of
any law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"CHANGE OF CONTROL" means the occurrence of either of the
following: (a) any "person" or "group" (as such terms are used in
subsections 13(d) and 14(d) of the Exchange Act and the regulations
thereunder), is or becomes the "beneficial owner" (as such term is used in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 30% or more of the
then outstanding voting capital stock of the Lessee, (b) the Continuing
Directors shall cease to constitute at least a majority of the directors
constituting the board of directors of the Lessee.
"COMPLIANCE CERTIFICATE" means a certificate of Mail-Well setting
forth (i) the information (including detailed calculations) required in order
to establish whether the Lessee was in compliance with the requirements of
Section 5.3 through 5.15, exclusively during the quarterly or annual period
covered by the statements then being furnished (including with respect to
each such Section, where applicable, the calculations of the maximum or
minimum amount, ratio or percentage, as the case may be, permissible under
the terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and (ii) a statement that such officer has
reviewed the relevant terms of the Lease
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and has made, or caused to be made, under his or her supervision, a review of
the transactions and conditions of Mail-Well and its Subsidiaries from the
beginning of the quarterly or annual period covered by the statements then
being furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default or, if any such condition
or event existed or exists, specifying the nature and period of existence
thereof and what action Mail-Well and its Subsidiaries shall have taken or
propose to take with respect thereto.
"CONSOLIDATED FUNDED DEBT" means, as of any date of determination,
all Funded Debt of the Lessee and its Subsidiaries, determined on a
consolidated basis eliminating intercompany items.
"CONSOLIDATED NET INCOME" and "CONSOLIDATED NET LOSS" mean,
respectively, for any period, the aggregate net income or loss for such
period of the Lessee and its Subsidiaries on a consolidated basis but without
giving effect to any extraordinary noncash items; PROVIDED that,
recalculations are made by the Lessee (based on audited financial statements
(or unaudited financial statements in the case of acquired entities which are
divisions of public companies with audited consolidated financial statements)
of acquired entities confirming the historical results for the net income or
loss of such entities with adjustments to exclude certain non-recurring
expenses (such as owner's salaries) of the acquired entity as determined by
the Lessor Trustee) of compliance with the covenants contained in Section
5.13, 5.14 and 5.15 for the calculation period on a PRO FORMA basis as if the
respective acquisition had occurred on the first day of such calculation
period.
"CONSOLIDATED NET WORTH" means, as of any date of determination,
Consolidated Total Assets MINUS Consolidated Total Liabilities.
"CONSOLIDATED TOTAL ASSETS" means, as of any date of determination,
the total assets of the Lessee and its Subsidiaries on a consolidated basis.
"CONSOLIDATED TOTAL LIABILITIES" means, as of any date of
determination, the total liabilities of the Lessee and its Subsidiaries on a
consolidated basis.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the "PRIMARY OBLIGATIONS") of another Person (the
"PRIMARY OBLIGOR"), including any obligation of that Person (i) to purchase,
repurchase or otherwise acquire such primary obligations or any security
therefor, (ii) to advance or provide funds for the payment or discharge of
any such primary obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency or
any balance sheet item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of any such primary
obligation against loss
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in respect thereof (each, a "GUARANTY OBLIGATION"); (b) with respect to any
Surety Instrument issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings or payments; (c) to
purchase any materials, supplies or other property from, or to obtain the
services of, another Person if the relevant contract or other related
document or obligation requires that payment for such materials, supplies or
other property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered; or (d) in respect
of any Swap Contract. The amount of any Contingent Obligation shall, in the
case of Guaranty Obligations, be deemed equal to the stated or determinable
amount of the primary obligation in respect of which such Guaranty Obligation
is made or, if not stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof, and in the case of other Contingent
Obligations other than in respect of Swap Contracts, shall be equal to the
maximum reasonably anticipated liability in respect thereof and, in the case
of Contingent Obligations in respect of Swap Contracts, shall be equal to the
Swap Termination Value.
"CONTINUING DIRECTORS" means, as of any date, the collective
reference to all members of the board of directors of the Lessee as of
December 31, 1997 and those members who assumed office after such date and
whose appointment or nomination for election by the Xxxxxx's shareholders was
approved by a vote of at least 50% of the Continuing Directors in office
immediately prior to such appointment or nomination.
"CONTRACTUAL OBLIGATIONS" means, as to any Person, any provision of
any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its
property is bound.
"CREDIT FACILITY DOCUMENTS" means (i) the Credit Agreement to be
entered into among the Guaranty Parties, Bank of America National Trust and
Savings Association, as Administrative Agent, the Documentation Agent and
Co-Agents specified therein, and the Banks (as defined therein), and (ii) the
other Loan Documents, as specified therein, pursuant to which such Banks
shall provide a revolving loan to the Lessee and certain letters of credit as
described therein.
"EBIT" means, for any period, Consolidated Net Income or
Consolidated Net Loss, as the case may be, for such period, PLUS the sum of
(a) Interest Expense, and (b) income tax expense, which were deductible in
determining Consolidated Net Income or Consolidated Net Loss of the Lessee
and its Subsidiaries on a consolidated basis for such period.
"EBITDA" means, for any period, EBIT for such period, PLUS the sum
of (a) depreciation expense, (b) amortization expense and (c) noncash items,
which were deductible in determining Consolidated Net Income or Consolidated
Net Loss of the Lessee and its Subsidiaries on a consolidated basis for such
period.
"ENVIRONMENTAL LAWS" means all federal, state, local or foreign
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative
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orders, directed duties, licenses, authorizations and permits of, and
agreements with, any Governmental Authorities, in each case relating to
environmental, health, safety and land use matters.
"EQUIPMENT LEASE FACILITY DOCUMENTS" means equipment lease
documents for additional equipment leases which are otherwise permitted
hereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Lessee or any Subsidiary of the
Lessee with the meaning of subsection 414(b) or (c) of the Code (and Sections
414(m) and (o) of the Code for purposes of provisions relating to Section 412
of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Lessee or any Subsidiary of the Lessee
or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Lessee or any Subsidiary of the Lessee or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably
be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Lessee or any Subsidiary of the Lessee or any
ERISA Affiliate.
"FRB" means the Board of Governors of the Federal Reserve System,
and any Governmental Authority succeeding to any of its principal functions.
"FUNDED DEBT" of any Person means, as of the end of each fiscal
quarter of such Person, (a) all Indebtedness of such Person for borrowed
money; (b) all noncontingent reimbursement or payment obligations of such
Person with respect to Surety Instruments; (c) all obligations with respect
to capital and off-balance sheet leases (including, without limitation, the
Lease Balance); (d) the current portion of all obligations of such Person
arising with respect to preferred stock that is mandatorily redeemable by
such Person; (e) all indebtedness referred to in clauses (a) through (d)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such Indebtedness; and (f) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (d); and (g) all Indebtedness in excess of $100,000,000 in connection
with the Accounts Receivables Securitization Facility Documents.
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"GUARANTY OBLIGATION" has the meaning specified in the definition
of "Contingent Obligation."
"GUARANTY PARTY" means the Guarantors and the Lessee.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business on ordinary
terms); (c) all noncontingent reimbursement or payment obligations with
respect to Surety Instruments; (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or
businesses; (e) all indebtedness created or arising under any conditional
sale or other title retention agreement, or incurred as financing, in either
case with respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all
obligations with respect to capital leases; (g) all indebtedness referred to
in clauses (a) through (f) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon or in property (including accounts and contracts rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; and (h) all Guaranty Obligations
in respect of indebtedness or obligations of others of the kinds referred to
in clauses (a) through (g) above.
For all purposes of this Agreement, the Indebtedness of any Person
shall include all recourse Indebtedness of any partnership or joint venture
or limited liability company in which such Person is a general partner or a
joint venturer or a member.
"INTERCOMPANY SUBORDINATED DEBT" means intercompany indebtedness of
the Lessee to Mail-Well in the amount of $150,000,000 on terms and conditions
satisfactory to the Lessee, the Lessor Trustee and the Certificate Holders.
"LEVERAGE RATIO" means, as of any date of determination, the ratio
of (a) Consolidated Funded Debt to (b) EBITDA for the period of four
consecutive fiscal quarters of the Lessee ending on such date.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"MTRC" means Mail-Well Trade Receivables Corporation.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Lessee or any Subsidiary of the
Lessee or any ERISA Affiliate sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 406(a) of ERISA) has made
contributions at any time during the immediately preceding five (5) plan
years.
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"PERMITTED SWAP OBLIGATIONS" means all obligations (contingent or
otherwise) of any Guaranty Party or any Subsidiary existing or arising under
Swap Contracts, PROVIDED that each of the following criteria is satisfied:
(a) such obligations are (or were) entered into by such Person in the
ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments or assets held or reasonably
anticipated by such Person, or changes in the value of securities issued by
such Person in conjunction with a securities repurchase program not otherwise
prohibited hereunder, and not for purposes of speculation or taking a "market
view"; and (b) such Swap Contracts do not contain (i) any provision
("walk-away" provision) exonerating the nondefaulting party from its
obligation to make payments on outstanding transactions to the defaulting
party, or (ii) any provision creating or permitting the declaration of an
event of default, termination event or similar event upon the occurrence of
an Event of Default hereunder (other than an Event of Default under Section
16.1(a)).
"REPORTABLE EVENT" means, any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder, other than any such event of
which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means the Senior Subordinated
Notes, the Senior Subordinated Note Indenture and all other documents
executed and delivered with respect to the Senior Subordinated Notes or
Senior Subordinated Note Indenture.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated as
of February 24, 1994 between Mail-Well, Xxxxx Envelope and Tag Corp. and
Shawmut Bank, National Association.
"SENIOR SUBORDINATED NOTES" means Mail-Well's (i) 10 1/2% Senior
Subordinated Notes due 2004 and (ii) 10 1/2% Series B Senior Subordinated
Notes due 2004, issued pursuant to the Senior Subordinated Note Indenture.
"SURETY INSTRUMENTS" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"SWAP CONTRACT" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or bill option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
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"SWAP TERMINATION VALUE" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or
after the date such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a) the amount(s)
determined as the mark-to-market value(s) for such Swap Contracts, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Contracts (which
may include any Certificate Holder).
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"WHOLLY OWNED SUBSIDIARY" means any corporation in which (other
than directors' qualifying shares required by law) 100% of the capital stock
of each class having ordinary voting power, and 100% of the capital stock of
every other class, in each case, at the time as of which any determination is
being made, is owned, beneficially and of record, by the Lessee or any
Subsidiary of the Lessee, or by one or more of the other Wholly Owned
Subsidiaries, or both.
SECTION 6.2. INTERPRETATION. Unless the context otherwise requires,
(i) references to Agreements shall be deemed to mean and include such
Agreements as the same may be amended and supplemented from time to time, and
(ii) references to parties to Agreements shall be deemed to include the
successors and permitted assigns of such parties.
SECTION 6.3. ACCOUNTING PRINCIPLES. Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP; PROVIDED, THAT if any change in GAAP
results in a change in the operation or calculation of any of Sections 5.13,
5.14, or 5.15 or any of the defined terms used therein, the Lessee shall
promptly notify the Lessor Trustee thereof and, upon notice to the Lessee by
the Lessor Trustee on behalf of the Certificate Holders, compliance with any
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice
is withdrawn upon instruction from the Certificate Holders or such covenant
is amended in a manner satisfactory to the Lessee and the Certificate Holders.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF GUARANTORS.
Each Guarantor hereby represents and warrants as follows:
(a) Such Guarantor and each of its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, is duly qualified to do business
as a foreign corporation and is in good standing in all jurisdictions in
which failure to be so qualified would have a
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materially adverse effect on such Guarantor's and Subsidiaries' business
or, in the case of such Guarantor, the performance of its obligations
under this Agreement, and has full corporate power and authority and all
necessary licenses and permits to carry on its present business and
operations, to own or lease its Properties and, in the case of such
Guarantor, to enter into and perform its obligations under this
Agreement.
(b) This Agreement has been duly authorized, executed and
delivered by such Guarantor and constitutes the legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms.
(c) The execution and delivery of this Agreement and compliance by
such Guarantor with all of the provisions thereof do not and will not
contravene any law, governmental rule or regulation or any order of any
court or governmental authority or agency applicable to or binding on
such Guarantor or contravene the provisions of, or constitute a default
under, or result in the creation of any Lien upon the Property of such
Guarantor under, its Articles of Incorporation or Certificate of
Incorporation, as the case may be, or By-laws or any indenture,
mortgage, contract or other agreement or instrument to which such
Guarantor is a party or by which it or any of its Properties may be
bound or affected.
(d) There are no proceedings pending or, to the knowledge of such
Guarantor, threatened, and to the knowledge of such Guarantor there is
no existing basis for any such proceedings, against or affecting such
Guarantor or any of its Subsidiaries in any court or before any
governmental authority or arbitration board or tribunal which, if
adversely determined, might individually or in the aggregate materially
and adversely affect the Properties, business, profits or condition
(financial or otherwise) of such Guarantor or its Subsidiaries or impair
the ability of such Guarantor to perform its obligations under this
Agreement. Such Guarantor is not in default with respect to any order
of any court or governmental authority or arbitration board or tribunal.
(e) Neither the nature of such Guarantor, or of any of its
businesses or Properties, nor any relationship between such Guarantor
and any other Person, nor any circumstance in connection with the
execution and delivery of this Agreement, nor the consummation of any of
the transactions by such Guarantor contemplated by this Agreement, is
such as to require a consent, approval or authorization of, or filing,
registration or qualification with, any governmental authority on the
part of such Guarantor in connection with the execution, delivery and
performance of this Agreement.
(f) Neither such Guarantor nor any of its Subsidiaries is or, but
for the passage of time, will be in violation in any material respect of
any term of any charter instrument, by-law or other material agreement
or instrument to which it is a party or by which it may be bound. Such
Guarantor and each of its Subsidiaries is in compliance with all laws,
ordinances, governmental rules and regulations to which it is subject,
the failure to comply with which would have a material and adverse
effect on
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its operations or condition, financial or otherwise, or would impair the
ability of such Guarantor to perform its obligations under this
Agreement, and has obtained all licenses, permits, franchises and other
governmental authorizations material to the conduct of its business.
(g) The consolidated financial statements provided to the Trust
Certificate Purchasers by Mail-Well, and the related consolidated
statements of income and retained earnings, were prepared in accordance
with GAAP and fairly present the consolidated financial condition of
Mail-Well with respect to its assets, liabilities, and operations.
Mail-Well has no contingent liabilities for Taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses from any
unfavorable commitments which could have a Material Adverse Effect on it
or any of its Subsidiaries. No event has caused a Material Adverse
Effect on Mail-Well or any of its Subsidiaries since the date of the
audited financial statements last delivered to the Trust Certificate
Purchasers.
(h) The representations and warranties of the Lessee contained in
Section 3.2 of the Participation Agreement are true and correct.
SECTION 8. MISCELLANEOUS.
SECTION 8.1. ACTIONS AND PROCEEDINGS. Any legal action or proceeding
against any Guaranty Party with respect to this Agreement may be brought in
such of the courts of competent jurisdiction of the State of New York in the
City of New York or in the United States District Court for the Southern
District of New York as the Lessor Trustee, any Certificate Holder or their
respective successors and assigns, as the case may be, may elect, and by
execution and delivery of this Agreement each Guaranty Party irrevocably
submits to the nonexclusive jurisdiction of such courts for purposes of legal
actions and proceedings hereunder and, in the case of any such legal action
or proceeding brought in the above-named New York courts, hereby irrevocably
consents, during such time, to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered mail, postage prepaid, to such Guaranty Party at
its address as provided in Section 8.8 hereof, or by any other means
permitted by Applicable Law. If it becomes necessary for the purpose of
service of process out of any such courts, each Guaranty Party shall take all
such action as may be required to authorize a special agent to receive, for
and on behalf of it, service of process in any such legal action or
proceeding, and shall take all such action as may be necessary to continue
said appointment in full force and effect so that such Guaranty Party will at
all times have an agent for service of process for the above-purposes in New
York, New York. To the extent permitted by law, final judgment (a certified
copy of which shall be conclusive evidence of the fact and of the amount of
any indebtedness of each Guaranty Party to the Lessor Trustee or any
Certificate Holder, as the case may be) against such Guaranty Party in any
such legal action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on an unsatisfied judgment. Each Guaranty Party
hereby irrevocably waives and agrees not to assert, by way of motion, as a
defense, or otherwise, in any legal action or proceeding brought hereunder in
any of the above-named courts, (i) that it or any of its property is
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immune from the above described legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution, or
otherwise), (ii) that such action or proceeding is brought in an inconvenient
forum, that venue for the action or proceeding is improper or that this
Agreement or any other Operative Agreement may not be enforced in or by such
courts, or (iii) any defense that would hinder or delay the levy, execution
or collection of any amount to which any party hereto is entitled pursuant to
a final judgment of any court having jurisdiction. Nothing in these
provisions shall limit any right of the Lessor Trustee or any Certificate
Holder to bring actions, suits or proceedings in the courts of any other
jurisdiction.
SECTION 8.2. BINDING EFFECT. This Agreement and every part hereof
shall be binding upon each Guaranty Party and its successors and assigns, and
shall inure to the benefit of, and to the extent provided herein shall be
directly enforceable by, the Lessor Trustee and each Certificate Holder and
their respective successors and assigns.
SECTION 8.3. WAIVERS; CUMULATIVE EFFECT. A waiver by the Lessor
Trustee or any Certificate Holder of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Lessor Trustee or such Certificate Holder would otherwise have had on any
future occasion with regard to any subsequent breach. No failure to exercise
nor any delay in exercising on the part of the Lessor Trustee or any
Certificate Holder any right, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided are cumulative and may be exercised singlely or concurrently,
and are not exclusive of any rights and remedies provided by law.
SECTION 8.4. AMENDMENTS; WAIVERS. None of the terms or provisions of
this Agreement may be amended, waived, altered, modified or terminated except
by an instrument in writing signed by all parties hereto. The invalidity,
illegality or unenforceability of any provision of this Agreement shall not
affect the validity, legality or enforceability of any other provision of
this Agreement.
SECTION 8.5. SECTION HEADINGS. The section headings in this Agreement
are for convenience of reference only and shall neither be deemed to be a
part of this Agreement nor modify, define, expand or limit any of the terms
or provisions hereof. All references herein to numbered sections, unless
otherwise indicated, are to sections of this Agreement.
SECTION 8.6. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or any
provision in any other Operative Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 8.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
warranties, representations and covenants made by any Guaranty Party herein,
in the Lease or in any
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certificate or other instrument delivered on the Closing Date by it or on its
behalf under this Agreement or any of the other Operative Agreements shall be
considered to have been relied upon by the Lessor Trustee and each
Certificate Holder and shall survive the execution and delivery of this
Agreement, regardless of any investigation made by the Lessor Trustee or such
Certificate Holder or on their behalf. All statements in any such
certificate or other instrument shall constitute warranties and
representations by such Guaranty Party hereunder. Except for the warranties,
representations and covenants referred to above, no Guaranty Party has made
any further or other warranties, representations or covenants upon which any
of the parties has relied upon in entering into the transactions contemplated
by the Operative Agreements.
SECTION 8.8. NOTICES. All communications and notices required or
permitted hereunder shall be given in the manner specified in Section 10.2 of
the Participation Agreement and, if to any Guarantor, to such Guarantor at 00
Xxxxxxxxx Xxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, Attention:
President, Telecopy: 000-000-0000, or such other address as such Guarantor
may designate by notice to the other parties duly given in accordance with
this Section.
SECTION 8.9. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 8.10. FURTHER ASSURANCES. Each Guaranty Party hereby agrees to
execute and deliver all such instruments and take all such action as the
Lessor Trustee or any Certificate Holder may from time to time reasonably
request in order to fulfill the purposes of this Agreement.
SECTION 8.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year set forth below.
GUARANTORS MAIL-WELL, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
GRAPHIC ARTS CENTER, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
XXXXXXX ENVELOPE INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
MAIL-WELL WEST, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
XXXXXX ENVELOPE CORPORATION
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
MW 1997-1 Trust Guaranty Agreement
XXXXXXX XXXXXXX COMMUNICATIONS
CORPORATION
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
WISCO ENVELOPE CORP.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
WISCO II, L.L.C.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
WISCO III, L.L.C.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
MW 1997-1 Trust Guaranty Agreement
LESSEE MAIL-WELL I CORPORATION
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Its Vice President-Treasurer
ORIGINAL TRUST CERTIFICATE KEYBANK NATIONAL ASSOCIATION
PURCHASER - SERIES A
By /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Its Vice President
ORIGINAL TRUST CERTIFICATE KEY CORPORATE CAPITAL INC.
PURCHASER - SERIES B
By /s/ Xxxx X. Xxxxxxxx
-----------------------------------
Its Vice President
LESSOR TRUSTEE KEYBANK NATIONAL ASSOCIATION,
individually and as trustee under a
Lessor Trust Agreement dated as of
December 15, 1997
By /s/ Xxxx Xxxxxxxxxx
-----------------------------------
Its Vice President
