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EXHIBIT 10 MATERIAL CONTRACTS
(ab) LEASE AGREEMENT
This Lease Agreement is made as of this 24th day of June 1993,
between Com-Lease, Inc., with its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Lessor"), and Anacomp, Inc.,
with its principal office at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Lessee"). The parties hereto do agree as follows:
1. LEASE
Lessor agrees to lease to Lessee, and Lessee agrees to lease from
Lessor, the equipment (the "Equipment") described in Equipment
Schedule(s) attached hereto. Lessee acknowledges that Lessor is
collaterally assigning its interest in this Lease to CIT Group/Equipment
Financing, Inc. ("CIT") to secure the repayment of a loan made this date
by CIT to Lessor. Any reference to "Lease" shall mean this Lease
Agreement, the Equipment Schedule(s) and any Rider(s) thereto, if any.
2. DEFINITIONS
The "Installation Date" means the date determined in accordance
with the Equipment Schedule.
3. TERM OF LEASE
The term of this Lease, as to all Equipment designated on any
Equipment Schedule, shall commence on the Installation Date for such
equipment, and shall continue for any initial period ending that number
of months from the Installation Date as is specified on the applicable
Equipment Schedule (the "Initial Term").
4. RENTAL
The monthly rental payable hereunder is as set forth in the
Equipment Schedule(s). Rental shall begin to accrue on the Installation
Date and shall be due and payable by Lessee in arrears on the 24th day
of each month. In addition to the monthly rental set forth in the
Equipment Schedule(s), Lessee shall pay all taxes, payable, however
designated, which are levied or based on the rental, on the Lease or on
the Equipment or its use, lease, operation, control or value (including,
without limitation, state and local privilege or excise taxes based on
gross revenue), any penalties or interest in connection therewith
(except any
This is Counterpart No. 2 of 3 manually executed counterparts.
Only the manually executed counterpart numbered 1 is sufficient to
transfer Lessor's interest, or to grant a security interest herein,
which Counterpart No. 1 has been delivered to The CIT Group/Equipment
Financing, Inc. such penalties or interest assessed as a result of the
negligence or intentional misconduct of Lessor) or taxes or amounts in
lieu thereof paid or payable by Lessor in respect of the foregoing, but
excluding taxes based on Lessor's income. Personal property taxes
assessed on the Equipment during the term hereof shall be paid by
Lessee. Lessor agrees to timely file all required property tax returns
and reports concerning the Equipment with all appropriate governmental
agencies. Lessor shall (i) notify Lessee promptly of any audit by any
taxing authority involving taxes Lessee has paid or reimbursed or may be
obligated to pay hereunder, and (ii) permit Lessee to participate in any
such audit at its expense.
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Interest on any past due payments shall accrue at the higher of 1-
1/2% per month or 2% over the prime rate of Chemical Bank as in effect
two days before such payment is due, or if such rate shall exceed the
maximum rate allowed by law, then at such maximum rate, and shall be
payable on demand. Charges for taxes, penalties and interest shall be
promptly paid by Lessee when invoiced by Lessor.
5. INSTALLATION, USE AND QUIET POSSESSION OF EQUIPMENT
(a) Lessee, at its own expense, shall provide the required
suitable electric current to operate the Equipment and appropriate
installation facilities as specified by the manufacturer.
(b) Any equipment, cards, disks, tapes or other items not
specified in the Equipment Schedule(s) which are used on or in
connection with Equipment must meet the specifications of the
manufacturer and shall be acquired by Lessee at its own expense.
(c) Lessee shall be entitled to unlimited usage of the Equipment
without extra charge by Lessor.
(d) Lessee shall at all times keep the Equipment in its sole
possession and control and shall provide Lessor with a quarterly
list of the location of each piece of Equipment. Lessee may move
the Equipment among the locations set forth in the Equipment
Schedules (the "Original Locations") without prior notice to
Lessor provided that any change is reflected on the next quarterly
list prepared by Lessee. In the event any Equipment is moved to a
location which is not one of the Original Locations, (i) Lessee
shall give Lessor 30 days prior written notice before moving the
Equipment, (ii) Lessee shall execute any additional UCC filings or
other documentation reasonably requested by Lessor, (iii) Lessee
shall provide Lessor with proof of insurance covering the
Equipment at the new location, (iv) Lessee shall pay any
additional filing fees and/or taxes associated with moving the
Equipment, (v) the new location of the Equipment shall be
reflected on the quarterly list prepared by Lessee pursuant to
this subsection, and (vi) such Equipment shall not be moved
outside the continental United States.
(e) After prior notice to Lessor, Lessee may, at its own
expense, make alterations in or add attachments to the Equipment,
which shall become the property of Lessee, provided that such
alteration or attachment (i) does not diminish the value of the
Equipment or interfere with the normal and satisfactory operation
and maintenance of the Equipment or with Lessee's ability to
obtain and maintain the maintenance contract required by Section
5(h) hereof or (ii) exceed $10,000 in value. If the value of any
alteration or attachment exceeds $10,000, Lessee shall obtain
Lessor's prior written consent before modifying any item of
Equipment, which consent will not be unreasonably withheld or
delayed. Lessor shall have the right to inspect the Equipment
subsequent to such alteration or attachment and such alteration or
attachment shall become the property of Lessee provided that the
standard set forth in clause (i) above is met. The manufacturer
or other organization selected by Lessee and approved in writing
by Lessor to maintain the Equipment ("Maintenance Organization")
may incorporate engineering changes or make temporary alterations
to the Equipment upon request of Lessee.
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(f) So long as Lessee is not in default hereunder, Lessor shall
not interfere with Lessee's use or possession of the Equipment
during the term of this Lease.
(g) Lessee shall, during the term of this Lease, at its expense,
keep the Equipment in good working order and condition and make
all necessary adjustments, repairs and replacements and shall not
use or permit the Equipment to be used in any manner or for any
purpose for which, in the opinion of the manufacturer, the
Equipment is not designed or reasonably suitable. Lessee may
replace any damaged or malfunctioning parts which cannot be
repaired at a cost deemed reasonable by Lessee. Lessee shall
notify Lessor immediately if an entire item of Equipment has been
replaced (the "Replacement Equipment"). Any Replacement Equipment
shall be of equal or greater value, utility and marketability to
the Equipment which is being replaced. Lessor shall have the
right to inspect such Replacement Equipment and, if such
Replacement Equipment is reasonably determined to be of lesser
value, utility and marketability, Lessor shall have the right to
require a partial prepayment of the Lease in an amount equal to
the product of the aggregate remaining lease payments multiplied
by a fraction, the numerator of which shall be the Lessor's
purchase price of the original item of Equipment replaced, as set
forth on the applicable Equipment Schedule, and the denominator of
which shall be the aggregate purchase price of all items of
Equipment subject to the Lease.
(h) Lessee shall, during the term of this Lease, at its expense,
enter into and maintain in force a contract with the manufacturer
or the Maintenance Organization covering at least prime shift
maintenance of each item of Equipment. Such contract shall
commence upon expiration of the manufacturer's warranty period, if
any, relating to such item. Lessee shall furnish Lessor with a
copy of such contract(s).
(i) At the termination of this Lease, Lessee shall, at its
expense, return the Equipment to Lessor (at the location
designated by Lessor within the continental United States) in the
same operating order, repair, condition and appearance as on the
Installation Date (subject to Section 5(e)), reasonable wear and
tear only excepted, with all engineering and safety changes
prescribed by the manufacturer or Maintenance Organization
incorporated therein. Lessee shall prior to such termination,
arrange and pay for any repairs and changes as are necessary for
the manufacturer or Maintenance Organization to accept the
Equipment under contract maintenance at its then standard rates.
6. OWNERSHIP AND INSPECTION
(a) Lessee shall have no interest in the Equipment pursuant to
this Lease other than the rights acquired as lessee hereunder and
the Equipment shall remain personalty regardless of the manner in
which it may be installed or attached. Lessee shall, at Lessor's
request, affix to the Equipment, tags, decals or plates furnished
by Lessor, indicating Lessor's ownership and the interest of
Lessor's lender, The CIT Group/Equipment Financing, Inc. ("CIT")
and Lessee shall not permit their removal or concealment.
(b) Lessee shall keep the Equipment free and clear of all liens
and encumbrances except liens or encumbrances arising through the
actions or omissions of Lessor. Lessee shall not assign or
otherwise encumber this Lease or any of its rights hereunder or
sublease the Equipment without the prior written consent of
Lessor, except that Lessee may assign this Lease or sublease the
Equipment to its parent or any subsidiary corporation without
Lessor's consent. No permitted assignment or sublease shall
relieve Lessee of any of its obligations hereunder, except as
shall be mutually agreed upon by Lessor, Lessor's assigns and
Lessee.
(c) Lessor or its agents shall have free access to the Equipment
and the books and records relating to the Equipment and
maintenance of the Equipment at all reasonable times for the
purpose of inspection and for any other purpose contemplated in
this Lease.
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(d) Lessee shall immediately notify Lessor of all details
concerning any non-repairable damage to, or loss of, the Equipment
arising out of any event or occurrence whatsoever.
(e) Notwithstanding the intent of the parties that the
transaction contemplated by this Lease shall be deemed a true
lease, in the event it should be determined that this Lease is a
secured transaction governed by Article 9 of the Uniform
Commercial Code, this Lease shall constitute a security agreement.
In order to secure the payment and performance by Lessee of all
obligations arising under this Lease, Lessee grants to Lessor a
continuing security interest in the Equipment.
7. NO WARRANTIES BY LESSOR
Lessee represents that, at the Installation Date set
forth in the applicable Equipment Schedule, it shall have (a)
thoroughly inspected the Equipment; (b) determined for itself that
all items of Equipment are of a size, design, capacity and
manufacture selected by it; and (c) satisfied itself that the
Equipment is suitable for Lessee's purposes. LESSOR SUPPLIES THE
EQUIPMENT AS IS AND NOT BEING THE MANUFACTURER OF THE EQUIPMENT,
THE MANUFACTURER'S AGENT OR THE SELLER'S AGENT, MAKES NO WARRANTY
OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE
EQUIPMENT'S MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
DESIGN, CONDITION, QUALITY, CAPACITY, MATERIAL OR WORKMANSHIP OR
AS TO PATENT INFRINGEMENT OR THE LIKE, it being agreed that all
such risks, as between Lessor and Lessee, are to be borne by
Lessee. Lessee agrees to look solely to the manufacturer or to
suppliers of the Equipment for any and all warranty claims and any
and all warranties made by the manufacturer or the supplier of
Lessor are hereby assigned to Lessee for the term of the
applicable Equipment Schedule. Lessee agrees that Lessor shall
not be responsible for the delivery, installation, maintenance,
operation or service of the Equipment or for delay or inadequacy
of any or all of the foregoing. Lessor shall not be responsible
for any direct or consequential loss or damage resulting from the
installation, operation or use of the Equipment or otherwise.
Lessee shall defend, indemnify and hold each of Lessor and CIT
harmless against any and all claims, demands and liabilities
arising out of or in connection with the design, manufacture,
possession or operation of the Equipment, if and for so long as
Lessee is the lessee of such Equipment.
8. RISK OF LOSS ON LESSEE
(a) Until the Equipment is returned to Lessor as provided in
this Lease, Lessee relieves Lessor of responsibility for all risks
of physical damage to or loss or destruction of the Equipment,
howsoever caused. During the term of this Lease as to any
Equipment Schedule, Lessee shall, at its own expense comply with
the insurance obligations contained in Section 15 of the CIT/COM-
Lease Loan and Security Agreement, dated as of June 24, 1993
between CIT and Lessor, as in effect on the date hereof. Evidence
of such insurance coverage shall be furnished to Lessor no later
than the Installation Date set forth in the Equipment Schedule(s)
and, from time to time, thereafter as Lessor may reasonably
demand. Such policies shall provide that no less than ten days
written notice shall be given to Lessor prior to cancellation of
such policies for any reason.
(b) If any item of Equipment is rendered unusable as a result of
any physical damage to, or destruction of, the Equipment, Lessee
shall give to Lessor immediate notice thereof and this Lease shall
continue in full force and effect without any abatement of rental.
Lessee shall determine, within fifteen (15) days after the date of
occurrence of such damage or destruction, whether such item of
Equipment can be repaired. In the event Lessee determines that
the item of Equipment cannot be repaired, Lessee, at its expense,
shall promptly replace such items of Equipment with Replacement
Equipment of equal or greater value, utility and marketability and
convey title to such Replacement Equipment to Lessor free and
clear of all liens and encumbrances, and this Lease shall continue
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in full force and effect as though such damage or destruction had
not occurred. Lessor shall have the right to inspect such
Replacement Equipment and, if such Replacement Equipment is
reasonably determined to be of lesser value, utility and
marketability, Lessor shall have the right to require a partial
payment of the Lease in an amount equal to the product of the
aggregate remaining lease payments multiplied by a fraction, the
numerator of which shall be the Lessor's purchase price of the
original item of Equipment replaced, as set forth on the
applicable Equipment Schedule, and the denominator of which shall
be the aggregate purchase price of all items of Equipment subject
to the Lease . With respect to any Replacement Equipment, Lessee
shall comply with clauses (ii), (iii) and (iv) of Section 5(d)
hereof. In the event Lessee determines that such item of
Equipment can be repaired, Lessee shall cause such item of
Equipment to be promptly repaired. All proceeds of insurance
received by Lessor or Lessee under the policy referred to in the
preceding paragraph of this Section shall be applied toward the
cost of any such repair or replacement.
9. EVENTS OF DEFAULT AND REMEDIES
The occurrence of any one of the following shall
constitute an Event of Default hereunder.
(a) Lessee fails to pay any installment of rent on or before the
fifth business day following the date such payment is due.
(b) Lessee attempts to remove, sell, transfer, encumber, sublet
or part with possession of the Equipment or any items thereof,
except as expressly permitted herein.
(c) Lessee or any of its subsidiaries shall (i) fail to pay when
due (after the expiration of any applicable grace period) any
principal or premium or interest on any obligations owing to CIT
and its affiliates, (ii) fail to pay any principal or premium or
interest on any obligation the aggregate outstanding principal
amount of which obligation is greater than or equal to $3,000,000,
or any event shall occur or condition shall exist which causes the
acceleration of such obligation before its stated maturity, or
(iii) fail to maintain insurance on the Equipment.
(d) A default or an event of default shall exist under Lessee's
Amended and Restated Master Agreement which results in the
Collateral Agent acting upon the collateral pledged pursuant to
the Company Security Agreement dated as of October 24, 1990
between Lessee and Citibank, N.A. as collateral agent, as amended
by Amendment No. 1 to the Company Security Agreement dated as of
March 22, 1993 by Lessee and Citibank, N.A., as collateral agent.
(e) Lessee shall fail to observe or perform any of the other
obligations required to be observed or performed by Lessee
hereunder and such failure shall continue uncured for ten (10)
business days after written notice thereof to Lessee by Lessor.
(f) Lessee ceases doing business as a going concern, makes an
assignment for the benefit of creditors, admits in writing its
inability to pay its debts as they become due, files a voluntary
petition in bankruptcy, is adjudicated a bankrupt or an insolvent,
files a petition seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution
or similar arrangement under any present or future statute, law or
regulation or files an answer admitting the material allegations
of a petition filed against it in any such proceeding, consents to
or acquiesces in the appointment of a trustee, receiver, or
liquidator of it or of all or any substantial part of its assets
or properties, or if it or its shareholders shall take any action
authorizing its dissolution or liquidation.
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(g) Within 30 days after the commencement of any proceedings
against Lessee seeking reorganization, arrangement, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation, such proceedings shall not have
been dismissed, or if within 30 days after the appointment without
Lessee's consent or acquiescence of any trustee, receiver or
liquidator of it or of all or any substantial part of its assets
and properties, such appointment shall not be vacated.
Upon the occurrence of an Event of Default, Lessor may at
its option do any or all of the following: (i) by notice to
Lessee terminate this Lease as to any or all Equipment Schedules;
(ii) whether or not this Lease is terminated as to any or all
Equipment Schedules, take possession of any or all of the
Equipment (including any software modifications) listed on any or
all Equipment Schedules, that are terminated, wherever situated,
and for such purpose, enter upon any premises without liability
for so doing or Lessor may cause Lessee and Lessee hereby agrees,
to return said Equipment to Lessor as provided in this Lease;
(iii) recover from Lessee, as liquidated damages for loss of a
bargain and not as a penalty, an amount equal to the present value
of all monies to be paid by Lessee during the remaining Initial
Term or any successive period then in effect, discounted at the
rate of six percent (6%), which payment shall become immediately
due and payable; (iv) sell, dispose of, hold, use or lease any
Equipment as Lessor in its sole discretion may determine (and
Lessor shall not be obligated to give a preference to the sale,
lease or other disposition of the Equipment over the sale, lease
or other disposition of similar equipment owned or leased by
Lessor). In any event, Lessee shall, without further demand, pay
to Lessor an amount equal to all sums due and payable for all
periods up to and including the date on which Lessor has declared
this Lease to be in default.
In the event that Lessee shall have paid to Lessor the
liquidated damages referred to in (iii) above, Lessor hereby
agrees to pay to Lessee, promptly after receipt thereof, all
rentals or proceeds received from the reletting or sale of the
Equipment during the balance of the Initial Term (after deduction
of all expenses incurred by Lessor), said amount never to exceed
the amount of the liquidated damages paid by Lessee. Lessee
agrees that Lessor shall have no obligation to sell the Equipment.
Lessee shall in any event remain fully liable for reasonable
damages provided by law and for all costs and expenses incurred by
Lessor on account of such default including but not limited to all
court costs and reasonable attorney's fees. Lessee hereby agrees
that, in any event, it shall be liable for any deficiency after
any sale, lease or other disposition by Lessor of Equipment that
has been repossessed by Lessor following an Event of Default. The
rights afforded Lessor hereunder shall not be deemed to be
exclusive, but shall be in addition to any rights or remedies
provided by law.
10. NET LEASE
Except as otherwise specifically provided in this Lease, it
is understood and agreed that this is a net lease, and that, as
between Lessor and Lessee, Lessee shall be responsible for all
costs and expenses of every nature whatsoever arising out of or in
connection with or related to this Lease or the Equipment
(including, but not limited to, transportation in and out,
rigging, drayage, packing, installation and disconnect charges).
Lessee hereby agrees that in the event that Lessee fails to pay or
perform any obligation under this Lease, Lessor may, at its
option, pay or perform said obligation and any payment made or
expense incurred by Lessor in connection therewith shall become
additional rent which shall be due and payable by Lessee upon
demand.
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11. ASSIGNMENT
Lessor may transfer or assign all or any part of Lessor's
right, title and interest in, under or to the Equipment and this
Lease and any or all sums due or to become due pursuant to any of
the above, to CIT without Lessee's consent or to any third party
(in either case, the "Assignee") only with Lessee's prior written
consent which shall not be unreasonably withheld or delayed.
Lessee agrees that upon receipt of written notice from Lessor of
such assignment, Lessee shall perform all of its obligations
hereunder for the benefit of Assignee and, if so directed by
Lessor, shall pay all sums due or to become due hereunder directly
to the Assignee or to any other party designated by the Assignee.
Lessee hereby covenants, represents and warrants as follows and
agrees that upon and following Lessee's receipt of the foregoing
notice the Assignee shall be entitled to rely on and shall be
considered a third party beneficiary of the following covenants,
representations and warranties: (i) Lessee's obligations to
Assignee hereunder are absolute and unconditional and are not
subject to any abatement, reduction, recoupment, defense, offset
or counterclaim available to Lessee for any reason whatsoever
including operation of law, defect in the Equipment, failure of
Lessor to perform any of its obligations hereunder or for any
other cause or reason whatsoever, whether similar or dissimilar to
the foregoing; (ii) Lessee shall not look to Assignee to perform
any of Lessor's obligations hereunder; (iii) Lessee shall not
amend or modify this Agreement without the prior written consent
of the Assignee; and (iv) Lessee shall send a copy to Assignee of
each notice which Lessee sends to Lessor.
Upon receipt of notice of such assignment, Lessee agrees to
execute and deliver to Lessor such documentation as Assignee may
reasonably require, including but not limited to (i) an
acknowledgment of, or consent to, assignment which may require
Lessee to make certain representations or reaffirmations as to
some of the basic terms and covenants contained in this Lease;
(ii) a certified copy of resolutions of Lessee; (iii) an opinion
of counsel for Lessee; and (iv) a Certificate of Delivery and
Acceptance. Nothing contained in such documentation required by
Assignee shall be in derogation of any of the rights granted to
Lessee hereunder. Notwithstanding such assignment: (i) Lessor
shall not be relieved of any of its obligations hereunder; and
(ii) the rights of Lessee hereunder shall not be impaired.
12. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE
(a) Lessee's obligations under this Lease, including the
obligation to pay rent and all other amounts payable by Lessee
hereunder, is absolute and unconditional and not subject to any
abatement, reduction, recoupment, defense, off-set, or
counterclaim whatsoever.
(b) Lessee is a corporation duly organized, validly existing and
in good standing under the laws of the State of Indiana.
(c) Lessee has full corporate power and authority to enter into
this Lease. The execution, delivery and performance of this Lease
by Lessee and the completion of the transactions contemplated
hereunder required to be completed by it, has been duly authorized
and approved by all necessary corporate action on the part of
Lessee, and when executed and delivered, this Lease and the
agreements of Lessee evidencing the transactions, contemplated
hereunder shall constitute, as to Lessee, valid and binding
obligations enforceable in accordance with their terms.
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(d) The execution and delivery of this Lease and the
consummation of the transactions contemplated herein will not, and
with notice or the lapse of time or both would not, in any
material respect (x) result in the breach of any of the terms or
conditions of, or constitute any default under, the Certificate of
Incorporation or By-Laws of Lessee, or any mortgage, bond,
indenture, agreement, lease, franchise or other instrument or
obligation to which Lessee is a party or by which it or its
properties or assets may be bound; or (y) violate any law,
regulation, judgment, award, order, writ, injunction or decree to
which Lessee is subject; or (z) require the consent, approval or
authorization of any party which consent, approval or
authorization has not been previously obtained.
(e) These are no pending or, to the knowledge of Lessee,
threatened actions or proceedings affecting Lessee that
individually or in the aggregate has a reasonable likelihood of
having a material adverse effect on Lessee.
(f) Lessee is not in default with respect to any contractual
obligation which has a reasonable likelihood of having a material
adverse effect on Lessee.
(g) During the term of this Lease, Lessee shall not (i) sell,
lease or transfer all or substantially all of its assets, (ii)
approve any plan or proposal for the dissolution or liquidation of
the Company, (iii) materially change its business, or (iv)
materially change its stock ownership such that any person or
controlling entity owns or controls over 50% of Lessee's voting
stock.
(h) Every item of Equipment covered by this Lease has at all
times been located and operated at one of Anacomp's data service
centers.
13. MISCELLANEOUS
(a) Neither this Lease or any consent or approval provided for
herein shall be binding upon Lessor unless signed on its behalf by
a duly authorized officer. This Agreement shall be deemed to have
been made in the state of New York and shall be governed in all
respects by, and construed and enforced in accordance with, the
laws of such State.
(b) This Lease constitutes the entire agreement between Lessee
and Lessor with respect to the Equipment, and no covenant,
condition or other term or provision may be waived or modified
orally.
(c) All notices hereunder shall be deemed given when received,
shall be in writing and shall be delivered in person or sent by
overnight courier or by registered or certified mail, postage
prepaid, to the address of the other party as set forth herein or
to such other address as such party shall have designated by
proper notice, with copies (in the case of the Lessee) to:
If to Lessor:
Com-Lease, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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If to Lessee:
Office of the Chairman
Anacomp, Inc.
One Buckhead Plaza,
Suite 1700
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with a copy to
Legal Department
Anacomp, Inc.
One Buckhead Plaza,
Suite 1700
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Any notice of any tax audit pursuant to Section 4 of this Lease
shall also be given to Lessee's Tax Department at its principal
office in Indianapolis, Indiana.
(d) This Lease shall be binding upon and inure to the benefit of
Lessor and Lessee and their respective successors and assigns
(including any subsequent assignee of Assignee).
(e) If any term or provision of this Lease or the application
thereof to any person is, to any extent, invalid or unenforceable,
the remainder of this Lease, or the application of such provision
to the person other than those to which it is invalid or
unenforceable, shall not be affected thereby, and each provision
of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
(f) No waiver of any of the terms and conditions hereof shall be
effective unless in writing and signed by the party against whom
such waiver is sought to be enforced. Any waiver of the terms
hereof shall be effective only in the specific instance and for
the specific purpose given.
(g) Lessor is hereby authorized by Lessee to cause this Lease or
other instruments, including Uniform Commercial Code Financing
Statements to be filed or recorded for the purposes of showing
Lessor's interest in the Equipment and Lessee agrees that Lessor
may execute such instruments for and on behalf of Lessee.
(h) Lessee shall operate the Equipment in compliance with all
applicable laws.
(i) In the event of any conflict between the terms and
conditions of this Lease Agreement and the terms and conditions of
any Equipment Schedule(s) or Rider(s) thereto, the terms and
conditions of such Equipment Schedule(s) or Rider(s) shall
prevail.
(j) Each year during the term of this Lease, Lessee hereby
agrees to deliver to Lessor (i) a copy of Lessee's annual audited
financial statements within 120 days after the end of Lessee's
fiscal year, (ii) a copy of Lessee's unaudited quarterly
financials certified by its chief financial officer within 90 days
after the end of each fiscal quarter of Lessee, and (iii) within
10 days after the same is delivered to Lessee's senior lenders, a
copy Lessee's covenant compliance letter.
(k) The obligations which Lessee and Lessor are required to
perform during the term of this Lease shall survive the expiration
or other termination of this Lease, but only to the extent that
such obligations remain unperformed as of the expiration or
termination of this Lease.
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IN WITNESS WHEREOF, the parties have caused this Lease
Agreement to be executed by their authorized representatives as of this
24th day of June , 1993.
LESSOR:
COM-LEASE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
LESSEE:
ANACOMP, INC.
By: /s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Title: Executive Vice
President and Chief Financial
Officer
This Lease, Rider Number 1 and each Equipment Schedule annexed to
the Lease have been assigned to The CIT Group/Equipment Financing, Inc.
This is Counterpart No. 2 of 3 manually executed counterparts.
Only the manually executed counterpart numbered 1 is sufficient to
transfer Lessor's interest, or to grant a security interest herein,
which Counterpart No. 1 has been delivered to The CIT Group/Equipment
Financing, Inc.
11
AMENDMENT NO. 1 TO LEASE AGREEMENT ("Amendment No. 1"),
dated as of October 19, 1994 between Com-Lease, Inc. (the "Lessor") and
Anacomp, Inc. (the ("Lessee").
W I T N E S S E T H
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement dated as of June 24, 1993 (the "Lease Agreement") (unless
otherwise defined herein, all capitalized terms used herein shall have
the same meanings set forth in the Lease Agreement);
WHEREAS, Lessor and Lessee desire to amend the Lease
Agreement to reflect the additional loan to be made by CIT on the date
hereof and the additional equipment schedules being added to the Lease
Agreement in connection therewith;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
AMENDMENTS TO LEASE AGREEMENT
The parties hereto hereby agree that, effective on the date
hereof, the Lease Agreement is hereby amended as follows:
1.1. Amendment to Section 1. Section 1 of the Lease
Agreement is hereby amended to read in its entirety as follows:
"1. Lease
Lessor agrees to lease to Lessee, and
Lessee agrees to lease from Lessor, the
equipment (the "Equipment") described in
equipment schedules numbered 1-7 executed on
June 24, 1993 and equipment schedules numbered
8-37, 43 and 44 executed on October 19, 1994,
attached hereto (collectively, the "Equipment
Schedule(s)"). Lessee acknowledges that Lessor
is collaterally assigning its interest in this
Lease to CIT Group/Equipment Financing, Inc.
("CIT") to secure the repayment of loans made on
June 24, 1993 and October 19, 1994 by CIT to
Lessor. Any reference to a "Lease" shall mean
this Lease Agreement, the Equipment Schedule(s)
and any Rider(s) thereto, if any."
1.2 Amendment to Section 4. The second sentence of
Section 4 of the Lease Agreement is hereby amended to read in
its entirety as follows:
12
"Rental shall begin to accrue on the Installation Date
and shall be due and payable by Lessee in arrears on the 24th day of
each month with respect to Equipment Schedules numbered 1-7 and the 19th
day of each month with respect to Equipment Schedules numbered 8-37, 43
and 44."
1.3 Amendment to Section 5(e). Section 5(e) is hereby
amended by adding the following at the end thereof:
"Notwithstanding the foregoing, any alterations or
attachments which over the Initial Term becomes part of Lessee's
"standard configuration" shall be deemed property of Lessor and subject
to the liens in favor of Lessor's lender arising hereunder."
1.4 Amendment to Section 5(i). Section 5(i) of the Lease
Agreement is hereby amended to read in its entirety as follows:
"At the termination of the applicable
lease term relating to Equipment leased
hereunder, Lessee shall, at its expense, return
the Equipment to Lessor (at the location
designated by Lessor within the continental
United States) in the same operating order,
repair, condition and appearance as on the
Installation Date (subject to Section 5(e)),
reasonable wear and tear only excepted, with all
engineering and safety changes prescribed by the
manufacturer or Maintenance Organization
incorporated therein. Lessee shall prior to
such termination, arrange and pay for any
repairs and changes as are necessary for the
manufacturer or Maintenance Organization to
accept the Equipment under contract maintenance
at its then standard rates."
1.5 Amendment to Section 9(d). Section 9(d) of the Lease
Agreement is hereby amended to read in its entirety as follows:
"A default or an event of default shall
exist under Lessee's Amended and Restated Master
Agreement, as amended or extended from time to
time (or any senior credit facility entered into
by Lessee to replace the Amended and Restated
Master Agreement) which results in the
Collateral Agent acting upon the collateral
pledged pursuant to the Company Security
Agreement dated as of October 24, 1990 between
Lessee and Citibank, N.A. as collateral agent,
as amended by Amendment No. 1 to the Company
Security Agreement dated as of March 22, 1993 by
Lessee and Citibank, N.A., as collateral agent."
13
ARTICLE II
REPRESENTATIONS
2.1. Representations. Lessee hereby warrants that the
representations of the Lessee contained in Section 12 of the Lease Agreement
are correct on and as of the date hereof as though made on and as of the
date hereof.
ARTICLE III
MISCELLANEOUS
3.1. Reference to and Effect on the Lease Agreement.
Except as specifically amended above, the Lease Agreement shall remain
and continue to be in full force and effect in accordance with its
terms, and the Lease Agreement is hereby ratified, confirmed and
acknowledged by each party thereto.
3.2 GOVERNING LAW. THIS AMENDMENT NO. 1 SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO
CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW YORK.
3.3. Section Titles. The Section titles contained in this
Amendment No. 1 are and shall be without substantive meaning or content
of any kind whatsoever and are not a part of the agreement between the
parties hereto.
3.4. Execution in Counterparts. This Amendment No. 1 may
be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
14
IN WITNESS WHEREOF, the parties have caused this Lease Agreement
to be executed by their authorized representatives as of this 17th day
of October, 1994.
LESSOR:
COM-LEASE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice
President
LESSEE:
ANACOMP, INC.
By: /s/ ▇▇▇▇ ▇'▇▇▇▇▇▇▇
Title: Executive Vice
President and
Chief Financial Officer
15
(ac) AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the
"Agreement") is made and entered into effective as of the 24th day of
September, 1995 (the "Effective Date"), by and between ANACOMP, INC., a
corporation organized and existing under the laws of the State of
Indiana and whose principal place of business is located at ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred
to as "Company"), and ▇. ▇▇▇▇ ▇▇▇▇▇ III, whose residence address is ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as
"Employee").
STATEMENT OF BACKGROUND
Company and Employee previously entered into that certain
Employment Agreement dated effective as of March 15, 1990, as amended on
December 17, 1990, September 30, 1992, and effective May 14, 1995,
governing the employment of Employee by Company as (most recently)
President, Chief Operating Officer and a member of Company's Board of
Directors (such Employment Agreement, as amended to date, is hereinafter
referred to as the "Original Employment Agreement"). Due to Employee's
promotion to Chief Executive Officer on the Effective Date, Company and
Employee now desire to enter into this Agreement, which shall amend and
restate the Original Employment Agreement in its entirety. Provisions
included in the Original Employment Agreement, which due to the passage
of time, changes in the course of dealings between the parties, or for
other reasons are no longer applicable, have been deleted from this
Agreement.
STATEMENT OF AGREEMENT
NOW, THEREFORE, for and in consideration of the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged and accepted, the parties hereto agree as follows:
1. Employment. Company hereby promotes Employee to
the positions of President and Chief Executive Officer of Company, and
Employee accepts such promotion and employment, all subject to the terms
and conditions hereinafter set forth.
2. Employment Term. The term of the Original
Employment Agreement commenced on October 1, 1989 and expired on the
Effective Date, at which time it was replaced by this Agreement. The
initial term of this Agreement is from the Effective Date until September
30, 1996 (the "Initial Term"). In addition to the Initial Term, this
Agreement shall be renewed for additional 1year periods ("Renewal
Terms"), ad infinitum, unless either party gives notice of non-renewal at
least sixty (60) days prior to the expiration of the Initial Term or then
current Renewal Term. Either the Initial Term or any Renewal Term may be
terminated pursuant to Section 8 hereof. If prior to the expiration of
the Initial Term or any Renewal Term, Company gives notice to Employee of
non-renewal of this Agreement, then upon the expiration of the Initial
16
Term or the then-current Renewal Term, this Agreement shall terminate and
Company shall immediately pay to Employee all benefits and payments due
him under this Agreement through such termination date, together with
severance in the form of a lump sum cash payment equal to the value of
the base salary and the incentive bonus payments that Employee received
during the twenty four (24) month period immediately preceding such
expiration. In addition, Company shall continue to provide to Employee
the insurance benefits described in Section 7.1 below, for a period
expiring twenty-four (24) months after the expiration of this Agreement
or until Employee obtains other employment with comparable insurance
benefits, whichever shall first occur. The lump sum cash payment and
insurance benefits described in this Section 2 which Employee shall
receive upon the expiration of this Agreement are hereinafter
collectively referred to as the "Severance Allowance."
3. Duties of Employee. Except as otherwise provided
in this Agreement, Employee shall have the duties set forth in this
Section 3 during the Initial Term and any Renewal Term of this Employment
Agreement. Company employs Employee as President and Chief Executive
Officer, reporting directly to Company's Chairman of the Board of
Directors. In such capacities, Employee is responsible for Company's
day-to-day business operations, including the direct supervision of
Company's operating divisions, strategic business units and subsidiaries.
Employee's responsibilities also include directing Company's
manufacturing, engineering, product sales and product marketing
activities, leading Company's business planning and research and
development activity and budgeting, and supervising Company's
administrative and corporate staff functions (including but not limited
to Company's investor relations function, internal legal staff, and
outside legal counsel). Employee will also have responsibility for
Company's accounting, controller, finance, treasury, tax and audit
functions, and Company's relations with its lenders. Employee is
responsible for establishing operational priorities, determining the
organizational structure for all of Company's operating divisions and
strategic business units, approving all Company compensation plans and
submitting such plans to Company's Board of Directors (if such submission
is required), and developing Company policies and procedures.
4. Compensation of Employee. Except as otherwise
provided in this Agreement, Company shall compensate Employee in the
manner set forth in this Section 4 for the duration of the term of this
Agreement. (As a result of Employee's May 14, 1995, promotion from the
positions of Senior Vice President and Magnetics Group President to the
positions of President and Chief Operating Officer, various of the
calculations in this Section 4 with respect to Employee's incentive bonus
compensation and the determination of Employee's stock option exercise
prices in Section 5 are made with reference to Sunday, May 14, 1995, and
the price at which Company's common stock traded on the first trading
date following that day.)
4.1 Base Salary. Employee shall receive a base salary
of Three Hundred Fifty Thousand Dollars ($350,000) per annum as
compensation for his services hereunder. The base salary shall be
payable in 26 installments, paid every other week in accordance with the
general payroll practices of Company. The amount of the base salary
shall be reviewed at the beginning of each fiscal year of the Company.
The Company, in its sole discretion, may increase the amount of
compensation provided in this Section 4.1 without the necessity of
amending this Agreement but the Company shall not decrease the base
salary at any time during the term of this Agreement. Any increase shall
not affect any of the other terms and conditions of this Agreement other
than determination of the Severance Allowance payable to Employee
hereunder.
17
4.2 Incentive Bonus.
(a) For purposes of this Section 4.2 and any
other provisions of this Agreement, "Pre-Tax Income" shall refer to
Company's consolidated income from continuing operations before income
taxes for the relevant period of time, calculated in accordance with
generally accepted accounting principles and audited by Company's
independent public accountants; provided, however, that until the end of
the fiscal quarter in which Company completes its capital restructuring,
any special charges incurred (including goodwill write-offs) shall not be
deducted for purposes of determining Company's Pre-Tax Income for the
relevant period of time. "Initial Period" shall refer to the period of
time beginning May 14, 1995, and ending September 30, 1995. "Subsequent
Period" shall refer to each twelve-month period of time beginning October
1 of each year and ending the following September 30, with the first such
Subsequent Period beginning October 1, 1995. "Base Price" shall be
$0.6875, which was the closing sales price of Company's common stock,
$.01 par value per share (the "Common Stock"), on May 15, 1995, the first
trading date immediately following Sunday, May 14, 1995. "Closing sales
price" shall refer to the closing sales price of Company's Common Stock
for the relevant day or days as reported in The Wall Street Journal, or
if not reported therein, then as reported in the "pink sheets" or other
mutually acceptable publication.
(b) During the Initial Period, Employee shall
only receive his base salary compensation set forth in Section 4.1 above
and shall not be entitled to receive any incentive bonus compensation.
(c) Following the Initial Period, in addition to
the base salary described in Section 4.1 above, Employee shall be
entitled to an annual incentive bonus, calculated in the following
manner: within ninety (90) days following the end of each Subsequent
Period during which this Agreement is in effect, Company shall calculate
its Pre-Tax Income for the relevant Subsequent Period and shall pay to
Employee an incentive bonus equal to one-half percent (0.005) of such
Pre-Tax Income, with payment to be made in the manner and on the date
specified in subsection (e) below. For example, if Pre-Tax Income is One
Million Dollars ($1,000,000) for the Subsequent Period, then the
incentive bonus payable to Employee pursuant to this Section 4.2(c) shall
be $5,000 ($1,000,000 x .005 = $5,000). The incentive bonus payable to
Employee pursuant to this Section 4.2(c) is hereinafter referred to as
the "Income-Based Bonus." If Company changes its fiscal year end while
this Agreement is in effect, then Company shall pay Employee his Income-
Based Bonus calculated upon the Pre-Tax Income generated during the stub
period that begins with the Subsequent Period then in effect and that
ends with Company's new fiscal year end, and all Subsequent Periods shall
thereafter coincide with Company's new fiscal year beginnings and
endings.
(d) In addition to the Income-Based Bonus
described in subsection (c) above that is based upon Company's Pre-Tax
Income, Employee shall be paid an additional incentive bonus in the
amount of $50,000 for each $1.00 increase in the closing sales price of
the Common Stock for the relevant period. Any incentive bonus payable to
Employee pursuant to this Section 4.2(d) is hereinafter referred to as
the "Stock-Based Bonus." The first relevant period shall be the period
beginning May 14, 1995, and ending September 30, 1996 (the "First
Period"), and the incentive bonus payable hereunder shall be based upon
18any increase from the Base Price in the closing sales price of the
Common
Stock during this First Period, with the price of the Common Stock at the
end of the First Period calculated based upon the average closing sales
price of the Common Stock for the ten (10) trading days ending upon the
last trading day of the First Period. This calculated price for the
Common Stock at the end of the First Period shall then become the "New
Base Price." (If the New Base Price at the end of the First Period is
less than the Base Price, then the first "New Base Price" shall be the
Base Price.) After the First Period, Employee's Stock-Based Bonus will
be based upon each increase in the New Base Price during the relevant
Subsequent Period, with the price of the Common Stock at the end of each
such Subsequent Period calculated based upon the average closing sales
price of the Common Stock for the ten (10) trading days ending upon the
last trading date of the relevant Subsequent Period. This calculated
price for the Common Stock at the end of each Subsequent Period shall
then become the New Base Price for the beginning of the next Subsequent
Period. (If the calculated price of the Common Stock at the end of any
Subsequent Period is less than the New Base Price in effect at the
beginning of that Subsequent Period, then the New Base Price for the
beginning of the next Subsequent Period shall be the same as that in
effect at the beginning of the last Subsequent Period.) The Stock-Based
Bonus shall be paid to Employee in the manner and on the date specified
in subsection (e) below. If during the relevant period the Base Price or
the New Base Price increases by more or less than a whole dollar, then
the StockBased Bonus payable to Employee shall be calculated by
multiplying $50,000 by the actual increase in the Base Price or the New
Base Price. For example, if the Base Price or the New Base Price is
$0.6875 and the calculated average closing sales price at the end of the
relevant period is $1.375, then the Stock-Base Bonus shall be $34,375
($1.375 less $0.6875, times $50,000 = $34,375). Similarly, if the Base
Price or the New Base Price is $0.6875 and the calculated average closing
sales price at the end of the relevant period is $2.00, then the Stock-
Based Bonus shall be $65,625 ($2.00 less $0.6875, times $50,000 =
$65,625).
(e) Company shall pay the Income-Based Bonus and
the Stock-Based Bonus (hereinafter collectively referred to as the
"Incentive Bonus") to Employee at the same time, which shall be on
Company's next regularly-scheduled pay date that follows the earlier to
occur of (i) ninety (90) days following the end of the relevant period
for which the Incentive Bonus is being paid, or (ii) Company's disclosure
to the general public of its Pre-Tax Income for such period (the earlier
to occur of (i) and (ii) being hereinafter referred to as the "Earnings'
Release Date"). Once the Incentive Bonus has been calculated, Company
shall reasonably determine the aggregate amount of all Federal (including
FICA), state and local taxes that Employee owes on such Incentive Bonus
and shall withhold such amount and forward it to the appropriate taxing
authorities. The remainder of the Incentive Bonus (the "Remaining
Bonus") shall be paid to Employee in shares of Common Stock issued under
and in accordance with the terms and conditions of Company's proposed
Stock Bonus Plan (1995) (the "1995 Plan") (which 1995 Plan shall be
reasonably acceptable to the Employee), with the number of shares
issuable to Employee calculated by dividing the Remaining Bonus by the
closing sales price of the Common Stock on the last trading day
immediately preceding the Earnings' Release Date (or on such other
trading date as the 1995 Plan requires). Employee shall be paid in cash
in lieu of receiving any fractional shares. Until such time that the
1995 Plan is in effect, any Incentive Bonuses to which Employee is
entitled and which have become due and payable shall be paid to Employee
in cash in lieu of shares of Common Stock.
5. Non-Qualified Stock Options.
5.1 Grant of New Options. Subject to the terms and
conditions set forth in Section 5.2 below, Company hereby grants to
Employee the following options to acquire additional shares of Common
Stock:
(a) An option to
acquire 145,000 shares of Common Stock, which option is immediately
vested in Employee;
19
(b) An option to acquire 105,000 shares of
Common Stock, which option shall vest and become exercisable with respect
to one-third of the total shares of Common Stock subject to the option
after each anniversary date of May 14, 1995, so that the option shall be
exercisable in full after the third anniversary date of May 14, 1995
(i.e. May 14, 1998); and
(c) An option to acquire 100,000 shares of
Common Stock, which option shall vest and become exercisable at the rate
of 20,000 shares for each $1.00 cumulative increase from the Base Price
in the closing sales price of the Common Stock.
5.2 Price and Terms of New Options. All of the options
described in Section 5.1 above shall be exercisable for shares of Common
Stock at an exercise price equal to the Base Price. All of such options
shall be incentive stock options, and shall be issued to Employee under
and in accordance with the terms and conditions of Company's 1986, 1987,
1988 and 1989 Stock Option Plans (including the anti-dilution provisions
contained in such Plans), depending upon under which of the Plans such
options are issued. As consideration for Company's grant of such options
to Employee, Employee has executed the Anacomp Confidentiality, Non-
Competition and Non-Disclosure Agreement attached hereto as Exhibit A.
5.3 Accelerated Vesting of Options. Notwithstanding
anything to the contrary in this Agreement or in Company's Stock Option
Plans, in the event of Employee's termination of employment with Company,
other than termination pursuant to Sections 8.1(b) (voluntary written
resignation by Employee) or 8.1(e) (termination with cause), all options
described in Section 5.1 above shall immediately vest and shall be fully
exercisable upon such termination and for ninety (90) days thereafter.
6. Business-Related Expenses. Upon presentation
in accordance with Company policies of itemized accounts of his
expenditures relating to his performance as an Employee, Company promptly
shall reimburse Employee for all reasonable and necessary travel expenses
and other disbursements incurred by Employee on behalf of Company in the
performance of his duties under this Agreement.
7. Employee Benefits.
7.1 Benefits Generally. Employee shall participate in
all employee benefit, bonus and similar programs of Company in which he
is a participant as of the date hereof and shall be eligible to
participate in all other incentive, pension, thrift, profit sharing,
stock option, deferred compensation, employee loan and insurance plans
and arrangements. Company may change, alter or modify any benefits or
benefit programs from time to time, provided Employee continues to
receive benefits equivalent to those received by Company's immediate-past
Chief Operating Officer, or other employee of similar status, and that
Employee participates in any benefit programs provided for employees
generally, for officers generally or for senior management personnel.
Any compensation received by Employee pursuant to any benefit programs
shall be in addition to the compensation described elsewhere in this
Agreement.
20
7.2 Insurance Benefits. Company shall provide for
Employee and his dependents life, medical, disability and dental
insurance coverage in keeping with the insurance benefits provided to
Company's immediate-past Chief Operating Officer, or other employee of
similar status and on the same expense sharing basis as Company's
immediate-past Chief Operating Officer or other employee of similar
status. Company may change, alter or modify any such insurance coverage
from time to time, provided that Employee and his dependents continue to
be provided such coverage equivalent to that provided to Company's
immediate-past Chief Operating Officer or other employee of similar
status.
7.3 Vacations. Employee shall be entitled to vacations
in accordance with Company policy, during which time his compensation
shall be paid in full; provided, however, Employee shall receive no less
than two (2) full weeks of vacation each year. If Employee is unable to
take any or all of his vacation during a year due to business reasons,
Employee, with the consent of Company's Board of Directors, may take that
paid vacation at a later time.
7.4 Other Fringe Benefits. Employee shall also be
entitled to any other fringe benefits, including regular holidays, that
are normally available to Company's immediate-past Chief Operating
Officer or other employee of similar status.
8. Termination.
8.1 Compensation and Benefits Upon Termination. This
Agreement may be terminated prior to the expiration of the Initial Term
or any Renewal Term by any of the following events:
(a) mutual written agreement expressed in a
single document signed by both the Company and Employee;
(b) voluntary written resignation by
Employee as
President and Chief Executive Officer of Company; provided, however, that
Employee shall be permitted to resign solely as a Director of Company at
any time, and such resignation shall not be deemed a termination
hereunder;
(c) death of Employee;
(d) written notice of termination without
cause as defined in Section 8.2;
(e) written notice of termination with cause
as defined in Section 8.3; or
21
(f) the occurrence of any of the events
specified in Section 8.4.1, which Employee elects to treat as a
termination under Section8.4.1; or
(g) the occurrence of any of the events
specified in Section 8.4.2, which Employee elects to treat as a
termination under Section 8.4.2.
Upon termination for any of the foregoing reasons,
Employee shall continue to render his services and shall be paid his
regular compensation and benefits up to the date of termination. If this
Agreement is terminated under Sections 8.1(b), 8.1(c) or 8.1(e), no
Severance Allowance shall be paid to Employee (except, with respect to
any termination pursuant to Section 8.1(e), as otherwise provided in
Section 8.3). If this Agreement is terminated under Sections 8.1(a),
8.1(d), 8.1(f) or 8.1(g), then the Company shall pay to Employee the
Severance Allowance. This Severance Allowance is in addition to the
regular compensation and benefits which Employee shall receive up to the
date of termination and shall be paid by the Company on the last date
that Employee actually reports to the Company's premises for full time
duties. In the event of such termination, this Agreement shall be deemed
terminated for all purposes except to the extent otherwise herein
provided.
8.2 Termination Without Cause. If Employee is unable,
as determined in good faith by the Company's Board of Directors, to
perform Employee's assigned duties on a full-time basis for any
continuous period of 120 days or a total of 180 days in any 12month
period, or if the Company otherwise concludes Employee's services are no
longer required, this Agreement may be terminated without cause by giving
Employee written notice thereof. The noninsurability of Employee, either
present or future, does not constitute grounds for termination under this
or any other section of this Agreement. If Employee is terminated under
this section, the Company shall pay the compensation, benefits and
Severance Allowance provided in Section 8.1 above.
8.3 Termination With Cause.
8.3.1 The Company may immediately terminate this
Agreement at any time with cause upon written notice to Employee
specifying the cause and the effective date of termination. For purposes
of this Agreement, "cause" shall mean only the following: (i) willful
breach of fiduciary duty or willful dishonesty, in either case involving
material personal profit and involving acts directed towards the Company,
and which acts have had a material adverse effect on the operation of the
Company, or (ii) criminal conduct of Employee against the Company which
results in a felony conviction of Employee with respect to which all
opportunities for appeal have expired. The Company agrees that in the
event that it shall allege that Employee engaged in willful breach of
fiduciary duty or willful dishonesty of the type for which the Company
believes that it has cause for Employee's termination, the Company shall
give notice to the Employee. If the Employee, following receipt of such
notice, shall maintain in good faith that any such alleged action was
unintentional, the Employee shall have the right to cure such action by
full reimbursement to the Company of any sums wrongfully received;
provided that such cure shall be permitted only if, with respect to any
single act or occurrence, the amount wrongfully received by Employee with
respect to such single act or occurrence was less than $5,000. The
agreement by Employee to return such sums shall constitute a cure, and
the Company shall not be entitled to terminate the Employee with cause
under this Section 8.3 for such act or occurrence. Termination with
cause shall be determined in good faith by Company's Board of Directors
after written notice to Employee and an opportunity for Employee to be
heard by Company's Board of Directors.
22 8.3.2 Employee agrees that in the event written
notice of termination is given under this Section 8.3, the Employee
agrees to treat the contents of said notice as privileged and Employee
shall have no action against Company or any of its officers, agents or
employees due to the contents of said notice unless the contents are
intentionally false and malicious. If Employee is terminated under this
Section 8.3, he shall receive no Severance Allowance at the time of such
termination. If Employee is given notice of termination under this
Section 8.3 and it is later established that no "cause" existed, Employee
shall be entitled to all compensation, benefits and allowances due him
for the period following such alleged termination and through the date of
such determination and shall be entitled to the Severance Allowance, plus
legal interest from the date of termination and all reasonable attorneys'
fees incurred by Employee in contesting the notice of termination.
8.4 Demotion, Transfer or Reduction in Compensation,
Merger, Transfer of Assets, Change in Control or Business
Discontinuation.
8.4.1 Demotion, Change in Employee's Management,
Transfer, Reduction in Compensation, or Business Interference. If any of
the following takes place:
(1) Employee is demoted, including for these
purposes (i) any change in the title or duties described in Section 3
hereof, (ii) any significant reduction or change by Company in the
functions, duties or responsibilities of Employee under this Agreement,
or (iii) the removal of Employee as a Director of Company without his
written consent,
(2) if Employee's functions are changed so that
Employee no longer directly reports to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as Company's
Chairman of the Board of Directors, or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ is replaced as
Company's Chairman of the Board of Directors by someone other than
Employee,
(3) a transfer of Employee to another location
outside of Metropolitan Atlanta not agreed to in writing by Employee,
23
(4) any reduction in annual compensation (but
not including a reduction in the Incentive Bonus received by Employee
resulting from a decrease in Pre-Tax Income earned by Company for the
relevant period or from a decrease in the price of Company's Common Stock
for the relevant period), or
(5) intentional interference by Company or any
person or entity directly or indirectly controlling Company with the
performance by Employee of the duties required of him hereunder,Employee
may, in his sole discretion, elect to treat any such occurrence as a
termination of this Agreement by giving written notice of such election
to the Company, entitling Employee to payment of the compensation,
benefits and Severance Allowance provided in Section 8.1 above. In the
event the Company disputes any election made by Employee pursuant to this
Section 8.4.1, the Company shall notify Employee in writing of such
dispute within ten (10) days of receiving Employee's written election.
If Company does not so notify Employee within the ten (10) day period,
the Company shall be deemed to have accepted Employee's election and
shall pay all compensation, benefits and Severance Allowance provided in
Section 8.1 above.
8.4.2 Merger, Transfer of Assets, Change in Control
or Business Discontinuation. In the event of any:
(a) merger or consolidation where Company is not
the consolidated or surviving company and the surviving or
resulting company does not expressly agree to be bound by and have
the benefits of the provisions of this Agreement, or
(b) transfer of all or substantially all of the
assets of Company and the transferee of Company's assets does not
expressly agree to be bound by and have the benefits of the
provisions of this Agreement, or
(c) change in control of Company of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934 as in effect on the day thereof (the "Exchange Act"),
provided that, without limitation, such a change in control shall be
deemed to have occurred if: (i) any person or persons acting in concert
(as such term is used in Section 13(d) and 14(d)(2) of the Exchange Act)
is or becomes the beneficial holder directly or indirectly of securities
of Company representing 25% or more of the combined voting power of
Company's then outstanding securities; (ii) during any period of two
consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute a majority
thereof, unless the election or nomination for election by Company's
shareholders of each new director was approved by a vote of at least 2/3
of the directors who were directors at the beginning of such period; or
(iii) transfer of all or substantially all of the stock of Company and
the transferee of Company's stock does not expressly agree to be bound by
and have the benefits of the provisions of this Agreement, or
24
(d) discontinuation of the business by
Company,then (i) Employee may, in his sole discretion, elect to treat any
such occurrence as a termination of this Agreement by giving written
notice of such election and immediate termination of his employment to
Company, and (ii) Company shall pay Employee within thirty (30) days of
Employee's election and termination of employment a payment equal to the
Severance Allowance. This Severance Allowance shall be in addition to
the regular compensation and benefits that Employee is entitled to
receive up to the date Employee's employment with Company terminates.
8.5 Return of Company Property. Employee agrees to
return all property of Company, including but not limited to, details of
equipment, prices, specifications, programs, customer and prospective
customer lists and any other proprietary data or objects acquired through
the Employee's employment with Company, within seven (7) days after
termination of employment, regardless of the reason therefor.
8.6 Failure to Pay Severance Allowance. In the event
that Company fails to timely pay to Employee any and all Severance
Allowance payments to which Employee is entitled pursuant to Sections
8.1, 8.2, 8.4.1 or 8.4.2 hereof, then the Anacomp Confidentiality, Non-
Competition and Non-Disclosure Agreement described in Section 5.2 above
shall be void and of no force and effect.
8.7 Waiver of Claims. All Severance Allowance payments
made by Company to Employee pursuant to Section 2 hereof or this Section
8 shall be in full and complete payment of any and all claims that
Employee may have against Company regarding his employment or the
termination thereof, and Employee hereby expressly waives all rights that
he may have to any other payments or to bring any other claims based upon
his employment or the termination thereof. Except for the qualification
with respect to employee benefits described in Section 2 above, all
Severance Allowance payments due from Company to Employee under this
Agreement are absolute, and shall not be diminished or otherwise affected
by virtue of Employee securing alternative employment.
8.8 Arbitration of Disputes. If a dispute arises
between the parties, including a dispute regarding an election Employee
makes under Section 8.4.1 hereof, then the parties agree that their
respective representatives shall meet and consult in good faith and
attempt to settle the dispute, within thirty (30) days of written notice
thereof, as a condition precedent to the initiation of arbitration
proceedings as set forth below.
Any dispute, controversy, or claim arising out of or
relating to this Agreement, the breach, termination or invalidity
thereof, or Employee's employment, including claims of tortious
interference or other tort or statutory claims, and including without
limitation any dispute concerning the scope of this arbitration clause,
shall be settled by arbitration in accordance with the Employment Dispute
Resolution Rules of the American Arbitrators Association then in effect.
The judgment on the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. The arbitration under this
Agreement shall be held in Atlanta, Georgia, or at such other place as
may be selected by mutual agreement of the parties. The arbitrator shall
be a former federal judge agreed to by the parties or, failing agreement,
appointed by the Chief Judge of the United States District Court
(Northern District of Georgia). The parties intend that the arbitrator
shall be independent and impartial. To this end, the arbitrator shall
disclose to the parties any professional, family, or social
relationships, past or present, with any party or counsel. Strict rules
of evidence shall not apply in any arbitration conducted pursuant to this
Agreement. The parties may offer such evidence as they desire and the
arbitrator shall accept such evidence as the arbitrator deems relevant to
the issues and accord it such weight as the arbitrator deems appropriate.
25
The arbitrator shall have the discretion to order a prehearing exchange
of information by the parties, including without limitation, production
of requested documents, exchange of summaries of testimony of proposed
witnesses, and examination by deposition of parties. No party shall be
allowed, however, to take more than one deposition of the opposing party
and no deposition shall last longer than six (6) hours. All disputes
regarding discovery shall be decided by the arbitrator. The arbitrator
award shall be in writing and shall specify the factual and legal bases
for the award. In rendering the award, the arbitrator shall determine
the respective rights and obligations of the parties according to the
laws of the State of Georgia or, if applicable, federal law. The
arbitrator shall have the authority to award any remedy or relief that a
federal or state court within the State of Georgia could order or grant.
Any provisional remedy that would be available from a court of law shall
be available from the arbitrator to the parties, pending the arbitrator's
determination of the merits of the parties' dispute. This shall include
orders of attachment, temporary restraining orders, injunctions, and
appointment of a receiver. If the arbitrator issues such an order, either
party may immediately apply to a court of competent jurisdiction for
enforcement of the order, even though the arbitrator may not have
rendered a final award. All fees and expenses of the arbitration,
including the fees of the arbitrator and the expense of each parties'
counsel, experts, witnesses and preparation and presentation of proofs,
shall be paid by Company. Unless legally required to do so, neither
party may disclose the existence, content, or results of any arbitration
under this Agreement without the prior written consent of the other
party, nor may the arbitrator disclose any such information without the
consent of both parties. This provision shall apply to all aspects of
the arbitration proceeding, including without limitation, discovery,
testimony, other evidence, briefs, and the award. It is the specific
intent of the parties that this arbitration clause be governed by the
Federal Arbitration Act, 9 U.S.C. Section 1, et seq. ("FAA"); however,
if this clause is unenforceable for any reason under the FAA, then the
parties intend that it be governed by the provisions of the Georgia
Arbitration Code, O.C.G.A. Sections 9-9-1, et seq. Both Employee and
Company represent and warrant they have read the foregoing Section 8.8
_____, that they have had an opportunity to consult with and receive
advice from legal counsel regarding the foregoing Section 8.8 _____, and
that they hereby forever waive all rights to assert that this Section 8.8
was the result of duress, coercion, or mistake of law or fact. _____
(Initial of both parties in each space.)
26
9. Indemnification. Company shall indemnify Employee
to the fullest extent permitted by Company's Articles of Incorporation,
Bylaws and applicable federal or state laws for all amounts (including,
without limitation, judgments, fines, settlement payments, expenses and
reasonable attorneys' fees) incurred or paid by Employee in connection
with any action, suit, investigation or proceeding arising out of or
relating to the performance by Employee of services for, or the acting by
Employee as a director, officer or employee of Company, any subsidiary of
Company or any other person or enterprise at Company's request. Expenses,
including but not limited to reasonable attorneys' fees and
disbursements, incurred in defending any action, suit, investigation or
proceeding, for which Employee may be entitled to indemnification under
this Section 9 upon final disposition of such action, shall be paid by
the Company in advance of the final disposition, to the maximum extent
permitted by applicable laws and regulations; provided, however, that
prior to making any such payments the Company shall receive an
undertaking by or on behalf of Employee to repay such amounts if it shall
ultimately be determined that he is not entitled to indemnification.
Subject to applicable laws and regulations, Company shall maintain in
full force and effect, to the extent available at reasonable cost, the
Directors' and Officers' Liability Insurance Policies in effect on the
date of this Agreement, or other policies or means of providing
substantially similar protection to Employee. The parties acknowledge
and agree that when used in this Agreement, "reasonable attorneys' fees"
shall be deemed to mean the normal billing rates of counsel of Employee's
choice.
10. Miscellaneous.
10.1 Governing Law. This Agreement is being made in
the state of Georgia and shall be construed and enforced in accordance
with the laws of that state, except to the extent that federal law
applies.
10.2 Time. Time is of the essence of this Agreement.
10.3 Board Approval. The Company represents and
warrants that the execution and delivery of this Agreement has been
approved by all requisite Board of Director or Committee action.
10.4 Severability. In the event that this
Agreement,or any paragraph or provision hereof, is declared invalid, void
or unenforceable by a Court of competent jurisdiction, the remaining
provisions shall nevertheless continue in full force and effect without
being impaired or invalidated in any way or to any extent.
10.5 Attorney's Fees and Costs.
Company shall pay all reasonable attorney's fees and expenses that
Employee may incur as a result of the Company's breaching or contesting
the validity or enforceability of this Agreement and Employee shall be
entitled to receive interest on any payment not timely made for the
period of any delay in payment from the date such payment was due at the
rate determined by adding 200 basis points to the six month Treasury ▇▇▇▇
rate prevailing from time to time over the period of nonpayment.
10.6 Waiver of Breach. Failure or delay
of either party to insist upon compliance with any provision hereof shall
not operate as, and is not to be construed as, a waiver or amendment of
such provision or the right of the aggrieved party to insist upon
compliance with such provision or to take remedial steps to recover
damages or other relief for noncompliance. Any express waiver of any
provision of this Agreement shall not operate and is not to be construed
as a waiver of any subsequent breach, whether
27
10.7 Notices. All notices, consents, request,
demands and other communications hereunder shall be in writing and shall
be deemed to have been duly given or delivered if (i) delivered
personally; or (ii) mailed by certified mail, return receipt request,
with proper postage prepaid; or (iii) delivered facsimile; or (iv)
delivered by recognized courier contracting for same day or next day
delivery:
(a) To Company:
Anacomp, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention : ▇▇▇▇▇▇ ▇▇▇▇▇▇
Corporate Counsel
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
(b ) To Employee:
▇. ▇▇▇▇ ▇▇▇▇▇▇ III
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the parties hereto shall have last
designated by notice to the other parties. Any item delivered
personally or by recognized courier contracting for the same day or next
day delivery shall be deemed delivered on the date of delivery.
Facsimile deliveries shall be deemed delivered on the date of
transmission by sender provided sender has evidence of successful
transmission. Any item mailed shall be deemed to have been delivered on
the date evidenced on the return receipt.
28
IN WITNESS WHEREOF, Company has caused this Agreement to be
executed and delivered by its duly authorized officers under seal and
its corporate seal to be affixed hereto, and Employee has executed and
delivered this Agreement and has hereunto affixed his hand and seal,
each on the date(s) set forth beside their respective signatures below,
with this Agreement to be effective as of the Effective Date.
COMPANY:
ANACOMP, INC.
DATED: By: (SEAL)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Senior Vice President,
Secretary and Chief Administrative Officer
EMPLOYEE:
DATED: By: (SEAL)
▇. ▇▇▇▇ ▇▇▇▇▇▇ III
29
(ad) FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") is made
and entered into the 30th day of November, 1995, by and between Anacomp,
Inc., an Indiana corporation (hereinafter referred to as the "Company"), and
▇. ▇▇▇▇ ▇▇▇▇▇▇ III, an individual resident of the State of Georgia
(hereinafter referred to as "Employee").
W I T N E S S E T H:
WHEREAS, Company and Employee are parties to that certain Amended and
Restated Employment Agreement dated effective September 24, 1995 (the
"Employment Agreement"), governing the employment of Employee by Company as
President and Chief Executive Officer; and
WHEREAS, Company and Employee are parties to that certain letter
agreement dated November 16, 1995 (the "Letter Agreement"), pursuant to
which Employee agreed to a temporary relocation to Company's Poway,
California facility, in accordance with the terms and conditions set forth
in the Letter Agreement; and
WHEREAS, Company desires to provide Employee a compensation increase in
connection with his promotion to Chief Executive Officer on October 1, 1995
and his temporary transfer to Poway; and
WHEREAS, Company intends to enter into discussions (the "Restructuring
Discussions") with its creditors regarding a possible restructuring of
Company's indebtedness; and
WHEREAS, Company believes that Employee's continued employment by
Company and Employee's participation in the Restructuring Discussions are
critical to the success of Company's business and maximizes the likelihood
that the restructuring can be completed; and
WHEREAS, in order to properly compensate Employee for the additional
duties and responsibilities he has undertaken, then Company has determined
to pay Employee an immediate retention bonus in accordance with the terms of
this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties to this
Amendment, intending to be legally bound, hereby agree as follows
(capitalized terms that are used in this Amendment and that are not defined
herein will have the same meanings set forth in the Employment Agreement):
30
1. In order to induce Employee to (i) serve as Chief Executive
Officer, (ii) accept the temporary transfer to Poway and (iii) continue
employment for one (1) year from October 1, 1995, Company agrees to pay to
Employee a retention bonus in the amount of Two Hundred Thousand Dollars
($200,000) (the "Retention Bonus").
2. In consideration of the payment of the Retention Bonus, Employee
agrees that he will not terminate his employment with Company pursuant to
Section 8.1(b) of the Employment Agreement for a one-year period commencing
on October 1, 1995, subject to the conditions set forth hereunder.
3. Except as set forth in this Paragraph 3, the Retention Bonus shall
be fully earned by Employee upon its receipt, shall be non-refundable and
shall not be disgorged to Company, in whole or in part, under any
circumstances whatsoever. If:
(a) Employee terminates his employment or is terminated at any
time after the date hereof and receives his Severance Allowance, in whole or
in part, then the amount of the Severance Allowance that Employee is
entitled to receive will first be offset against the Retention Bonus and
Employee will then be paid the remaining portion (if any) of his Severance
Allowance in cash;
(b) Employee at any time (and from time to time) receives an
Incentive Bonus in cash (as opposed to payment in shares of Company's Common
Stock), then the amount of the Incentive Bonus that Employee is entitled to
receive will first be offset against the Retention Bonus and Employee will
then be paid the remaining portion (if any) of his Incentive Bonus in cash.
4. Effective October 1, 1995, Employee's base salary as set forth in
Section 4.1 of the Employment Agreement has been increased to $450,000 per
annum.
5. In lieu of an additional $50,000 of base salary that Company's
Board of Directors also approved for payment to Employee, Company and
Employee agree that Company will pay Employee an incentive bonus in the
following manner: commencing with the month beginning October 1, 1995,
Company shall pay Employee a bonus equal to .0005 of Company's monthly
consolidated earnings before interest, taxes, depreciation and amortization
(commonly referred to as "EBITDA"). The incentive bonus will be calculated
within fifteen (15) days following the end of each month during which the
Employment Agreement shall remain in effect, and will be paid to Employee in
cash on the next regularly schedule Company pay date following each such 15-
day period.
6. All other provisions, terms and conditions of the Employment
Agreement shall remain unchanged. The Employment Agreement, as amended
hereby, shall remain in full force and effect until it is terminated in
accordance with its terms. Any further amendments or modifications to the
Employment Agreement shall be in writing mutually agreed to and executed by
both parties to the Employment Agreement.
[SIGNATURES ON NEXT PAGE]
31
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date and year set forth above.
COMPANY:
ANACOMP, INC.
By: _________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President,
Chief Administrative Officer
and Secretary
EMPLOYEE:
_______________________________(L.S.)
▇. ▇▇▇▇ ▇▇▇▇▇▇ III
32
(ae) Letter Agreement
November 16, 1995
VIA HAND DELIVERY
▇▇. ▇. ▇▇▇▇ ▇▇▇▇▇▇ III
President and Chief Executive Officer
Anacomp, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Amended and Restated Employment Agreement Dated Effective September 24,
1995 Between Anacomp, Inc. ("Anacomp") and ▇. ▇▇▇▇ ▇▇▇▇▇▇ III (the
"Agreement")
Dear ▇▇. ▇▇▇▇▇▇:
As you are aware, Section 8.4.1(3) of the above-referenced Agreement
provides that in the event that Anacomp transfers you to a location outside
of Atlanta without your written agreement, then you may elect to treat such
event as a termination under the Agreement and receive the severance
described therin.
In connection with Anacomp's financial and operational restructuring
efforts, you have agreed that you can best serve Anacomp by transferring to
Anacomp's Poway, California facility and residing in that locale, on a
temporary basis (the "Temporary Transfer"). This letter will serve as your
written agreement to accept such Temporary Transfer, subject to the
following terms and conditions.
1. You agree to transfer to the Poway facility no later than January 31,
1996 (the "Temporary Transfer Date"). Commencing upon the Temporary
Transfer Date, you will operate out of the Poway facility and reside in
that locale, and you will continue to do so through April 30, 1996 (the
"Transfer Termination Date"), unless you and Anacomp agree in writing to
extend the Transfer Termination Date on a month-by-month basis (but in
no event beyond September 30, 1996). Upon the Transfer Termination
Date, as such date may be extended, Anacomp will transfer you back to
Atlanta, Georgia Monroe Drive facility or another mutually agreeable
location.
2. Anacomp agrees to reimburse you for any and all travel and living
expenses that you and your family incur in connection with your
Temporary Transfer to the Poway facility and your return to the Monroe
Drive facility or another mutually agreeable location, with such
reimbursement to be made in accordance with Section 6 of the Agreement.
33
▇▇. ▇. ▇▇▇▇ ▇▇▇▇▇▇ III
November 16, 1995
Page -2-
3. In the event that Anacomp does not transfer you back to the Monroe Drive
facility or another mutually agreeable location on or before the
Transfer Termination Date, then you may at any time thereafter elect to
treat the Temporary Transfer as a breach of Section 8.4.1(3) of your
Agreement.
If the foregoing accurately sets forth your understanding with respect to
your Temporary Transfer to the Poway facility, please indicate your
agreement by executing this letter in the space below. I have enclosed an
extra copy of this letter for your files.
Very truly yours,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President, Chief Administrative Officer
and Secretary
AGREED TO AND ACCEPTED:
▇. ▇▇▇▇ ▇▇▇▇▇▇ III
Dated:
