United States
Securities and Exchange Commission
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(D) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 1996
Commission file numbers: United Stationers Inc.: 0-10653
United Stationers Supply Co.: 33-59811
UNITED STATIONERS INC.
UNITED STATIONERS SUPPLY CO.
(Exact name of Registrant as specified in its charter)
United Stationers Inc.: Delaware 36-3141189
United Stationers Supply Co.: Illinois 36-2431718
(State or otherjurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2200 East Golf Road
Des Plaines, Illinois 60016-1267
(847) 699-5000
(Address, including zip code and telephone number, including
area code, of registrant's executive offices)
United Stationers Inc. and United Stationers Supply Co.
Item 5. Other Events.
On November 4, 1996, United Stationers Inc., a Delaware
corporation announced that on October 31, 1996 its
subsidiary, United Stationers Supply Co., an Illinois
corporation completed the acquisition of all of the capital
stock of Lagasse Bros., Inc., a rapidly growing $80 million
wholesaler of janitorial and sanitary supplies.
On October 31, 1996, United Stationers Supply Co., completed
an amendment to its Senior Credit Agreement and increased
the amount to $540 million. The purpose was to finance the
acquisition of Lagasse Bros., Inc. and to provide lower
interest rates which reflect United's strong financial
performance to date as well as to take advantage of the
current favorable conditions in the bank market.
Item 7. Exhibits.
Exhibit 99.1
Stock Purchase Agreement between United
Stationers Supply Co. ("Purchaser") and Lagasse Bros., Inc.
("Company") and Kevin C. Lagasse, Cynthia Lagasse, David C.
Lagasse, Linette Lagasse Abadie, Clinton G. Lagasse, Raymond
J. Lagasse and Rickey Lagasse being all of the shareholders
of the Company (the "Shareholders").
Exhibit 99.2
Amended and Restated Credit Agreement
dated October 31, 1996 (amending and restating the Credit
Agreement dated as of March 30, 1995).
Exhibit 99.3
Press release issued by United Stationers
Inc. on November 4, 1996.
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
be signed on its behalf by the undersigned thereunto duly
authorized.
United Stationers Inc.
United Stationers Supply Co.
Dated: November 5, 1996 By: /s/ Daniel H. Bushell
Daniel H. Bushell
Executive Vice President and
Chief Financial Officer
Exhibit 99.1
STOCK PURCHASE AGREEMENT
between
UNITED STATIONERS SUPPLY CO.
an Illinois corporation
("Purchaser")
and
LAGASSE BROS., INC.
a Louisiana corporation
("Company")
and
KEVIN C. LAGASSE, CYNTHIA LAGASSE,
DAVID C. LAGASSE, LINETTE LAGASSE ABADIE,
CLINTON G. LAGASSE, RAYMOND J. LAGASSE
and RICKEY LAGASSE
being all of the shareholders of the Company
(the "Shareholders")
This STOCK PURCHASE AGREEMENT ("Agreement") is made as of
October 1, 1996, by United Stationers Supply Co., an Illinois
corporation ("Purchaser"), Lagasse Bros., Inc., a Louisiana
corporation (the "Company"), and Kevin C. Lagasse, Cynthia
Lagasse, David C. Lagasse, Linette Lagasse Abadie, Clinton G.
Lagasse, Raymond J. Lagasse and Rickey Lagasse, being all of
the shareholders of the Company (the "Shareholders").
RECITALS
The Shareholders own Two Thousand Eighty-eight (2,088)
shares of common stock that constitute all of the issued and
outstanding shares (the "Shares") of capital stock of the
Company;
The Shareholders desire to sell to Purchaser, and
Purchaser desires to purchase from Shareholders, all of the
issued and outstanding shares of common stock of the Company,
in accordance with the terms and conditions hereinafter set
forth;
AGREEMENT
In consideration of the mutual representations,
warranties, covenants, and agreements contained herein, the
parties, intending to be legally bound, agree as follows:
1. Definitions
"Adjustment Amount" - as defined in Section 2.5
"Applicable Contract" - any Contract (a) under which the
Company has or may acquire any rights, (b) under which
the Company has or may become subject to any obligation
or liability, or (c) by which the Company or any of the
assets owned or used by it is or may become bound.
"Best Efforts" - the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to
ensure that such result is achieved as expeditiously as
possible.
"Breach" - a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any
instrument delivered pursuant to this Agreement will be
deemed to have occurred if there is or has been (a) any
inaccuracy in or breach of, or any failure to perform or
comply with, such representation, warranty, covenant,
obligation, or other provision, or (b) any claim (by any
Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty,
covenant, obligation, or other provision, and the term
"Breach" means any such inaccuracy, breach, failure,
claim, occurrence, or circumstance.
"Claims Period" - The one-year period beginning on the Closing
Date and ending on the first anniversary thereof, within
which any assertable claim to be made by either party
with regard to the breach of any representation,
warranty, covenant, obligation, or indemnity set forth
herein must be so asserted.
"Closing" - as defined in Section 2.3.
"Closing Date" - the date and time as of which the Closing
actually takes place.
"Closing Date Balance Sheet" - the Balance Sheet to be
prepared by the Company as of the Closing Date and
delivered to Purchaser at Closing, prepared in accordance
with generally accepted accounting principles applied on
a basis consistent in form with the balance sheet of the
Company as of December 31, 1995.
"Consent" - any approval, consent, ratification, waiver, or
other authorization (including any Governmental
Authorization).
"Contemplated Transactions" - all of the transactions
contemplated by this Agreement, including:
(a) the sale of Shares by the Shareholders to Purchaser;
(b) the execution, delivery and performance of the
Employment Agreements, the Noncompetition
Agreements, the Shareholders' Releases, and the
Escrow Agreement;
(c) the performance by Purchaser, the Company and the
Shareholders of their respective covenants and
obligations under this Agreement; and
(d) Purchaser's acquisition and ownership of the Shares
and exercise of control over the Company.
"Contract" - any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express
or implied) that is legally binding.
"Damages" - as defined in Section 10.2.
"Disclosure Letter" - the disclosure letter delivered by the
Company and the Shareholders to Purchaser concurrently
with the execution and delivery of this Agreement, as
Exhibit 1 to this Agreement.
"Employment Agreements" - as defined in Section 2.4(a)(iii).
"Encumbrance" - any charge, claim, community property
interest, condition, equitable interest, lien, option,
pledge, security interest, easement, right of way, right
of first refusal, or restriction of any kind, including
any restriction on use, voting, transfer, receipt of
income, or exercise of any other attribute of ownership.
"Environment" - soil, land surface or subsurface strata,
surface waters (including navigable waters, ocean waters,
streams, ponds, drainage basins, and wetlands)
groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal
life, and any other environmental medium or natural
resource.
"Environment, Health and Safety Liabilities" - any cost,
damages, expense, liability, obligation, or other
responsibility arising from or under Environmental Law or
Occupational Safety and Health Law and consisting of or
relating to:
(a) any environmental, health, or safety matters or
conditions (including on-site or off-site
contamination, occupational safety and health, and
regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements,
legal or administrative proceedings, damages,
losses, claims, demands and response, investigative,
remedial, or inspection costs and expenses arising
under Environmental Law or Occupational Safety and
Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs
or corrective action, including any investigation,
cleanup, removal, containment, or other remediation
or response actions ("Cleanup") required by
applicable Environmental Law or Occupational Safety
and Health Law (whether or not such Cleanup has been
required or requested by any Governmental Body or
any other Person) and for any natural resource
damages; or
(d) any other compliance, corrective, investigative, or
remedial measures required under Environmental Law
or Occupational Safety and Health Law.
The terms "removal", "remedial", and "response
action," include the types of activities covered by the
United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et
seq., as amended ("CERCLA").
"Environmental Law" - any Legal Requirement that requires or
relates to:
(a) advising appropriate authorities, employees, and the
public of intended or actual releases of pollutants
or hazardous substances or materials, violations of
discharge limits, or other prohibitions and of the
commencements of activities, such as resource
extraction or construction, that could have
significant impact on the Environment;
(b) preventing or reducing to acceptable levels the
release of pollutants or hazardous substances or
materials into the Environment;
(c) reducing the quantities, preventing the release, or
minimizing the hazardous characteristics of wastes
that are generated;
(d) assuring that products are designed, formulated,
packaged, and used so that they do not present
unreasonable risks to human health or the
Environment when used or disposed of;
(e) protecting resources, species, or ecological
amenities;
(f) reducing to acceptable levels the risks inherent in
the transportation of hazardous substances,
pollutants, oil, or other potentially harmful
substances;
(g) cleaning up pollutants that have been released,
preventing the threat of release, or paying the
costs of such clean up or prevention; or
(h) making responsible parties pay private parties,
or groups of them, for damages done to their health
or the Environment, or permitting self-appointed
representatives of the public interest to recover
for injuries done to public assets.
"ERISA" - the Employee Retirement Income Security Act of 1974,
as amended, and regulations and rules issued pursuant to
that Act.
"Escrow Agreement" - as defined in Section 3.13.
"Facilities" - any real property, leaseholds, or other
interests currently or formerly owned or operated by the
Company and any buildings, structures or equipment
(including motor vehicles and rolling stock) currently or
formerly owned or operated by the Company.
"Financial Statements" - Company's financial statements,
prepared in accordance with generally accepted accounting
principles, consistently applied, that present a
complete, true and accurate statement of the Company's
financial condition for the periods covered therein.
"GAAP" - generally accepted United States accounting
principles, applied on a basis consistent with the basis
on which the Balance Sheet and other financial statements
referred to in Section 3.4(b) were prepared.
"Governmental Authorization" - any approval, consent, license,
permit, waiver, or other authorization issued, granted,
given, or otherwise made available by or under the
authority of any Governmental Body or pursuant to any
legal Requirement.
"Governmental Body" - any:
(a) nation, state, county, city, village, town, district
or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other
government;
(c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch,
department, official or entity and any court or
other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of
any nature.
"Hazardous Activity" - the distribution, generation, handling,
importing, management, manufacturing, processing,
production, refinement, Release, storage, transfer
transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous
Materials in, on, under, about, or from the Facilities or
any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger,
or risk of danger, or poses an unreasonable risk of harm
to persons or property on or off the Facilities, or that
may affect the value of the Facilities or the Company.
"Hazardous Materials" - any waste or other substance that is
listed, defined, designated, or classified as, or
otherwise determined to be, hazardous, radioactive or
toxic or a pollutant or a contaminant under or pursuant
to any Environmental Law, including any admixture or
solution thereof, and specifically including petroleum
and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"HSR Act" - the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.
"Indemnified Persons" - as defined in Section 10.2.
"Intellectual Property Assets" - as defined in Section 3.22.
"Interim Balance Sheet" - as defined in Section 3.4.
"IRC" - the Internal Revenue Code of 1986 or any successor
law, and regulations issued by the IRS pursuant to the
Internal Revenue Code or any successor law.
"IRS" - the United States Internal Revenue Service and, to the
extent relevant, the United States Department of the
Treasury.
"Knowledge" - an individual will be deemed to have "Knowledge"
of a particular fact or other matter if:
(a) such individual is actually aware of such fact or
other matter; or
(b) a prudent individual could be expected to discover
or otherwise become aware of such fact or other
matter in the course of conducting a reasonably
comprehensive investigation concerning the existence
of such fact or other matter.
A Person (other than an individual) will be
deemed to have "Knowledge" of a particular fact or other
matter if any individual who is serving, or who has at
any time served, as a director, officer, or branch
manager of the Company or as a director, officer,
partner, executor, or trustee of such other Person (or in
any similar capacity) has, or at any time had, Knowledge
of such fact or other matter.
"Legal Requirement" - any federal, state, local, municipal,
foreign, international, multinational, or other
administrative order, constitution, law, ordinance,
principal of common law, regulation, statute, or treaty.
"Noncompetition Agreements" - as defined in Section
2.4(a)(iv).
"Occupational Safety and Health Law" - any Legal Requirement
designed to provide safe and healthful working conditions
and to reduce occupational safety and health hazards, and
any program, whether governmental or private (including
those promulgated or sponsored by industry associations
and insurance companies), designed to provide safe and
healthful working conditions.
"Order" - any award, decision, judgment, order, ruling,
subpoena, or verdict entered, issued, made or rendered by
any court, administrative agency, or Governmental Body or
by any arbitrator.
"Ordinary Course of Business" - an action taken by a Person
will be deemed to have been taken in the "Ordinary Course
of Business" only if:
(a) such action is consistent with the best practices of
such Person and is taken in the ordinary course of
the normal day-to-day operations of such Person;
(b) such action is not required to be authorized by the
board of directors of such Person (or by any Person
or group of Persons exercising similar authority)
and is not required to be specifically authorized by
the parent company (if any) of such Person; and
(c) such action is similar in nature and magnitude to
actions customarily taken, without any authorization
by the board of directors (or by any Person or group
of Persons exercising similar authority), in the
ordinary course of the normal day-to-day operations
of other Persons that are in the same line of
business as such Person.
"Organizational Documents" - (a) the articles or certificate
of incorporation and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of
a general partnership; (c) the limited partnership
agreement and the certificate of limited partnership of a
limited partnership; (d) any charter or similar document
adopted or filed in connection with the creation,
formation, or organization of a Person; and (e) any
amendment to any of the foregoing.
"Person" - any individual, corporation (including any not-for-
profit corporation), general or limited partnership,
limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity
or Governmental Body.
"Plan" - as defined in Section 3.13.
"Proceeding" - any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal)
commenced, brought, conducted or heard by or before, or
otherwise involving, any Governmental Body or arbitrator.
"Real Estate" - all real property, and all leasehold interests
in estates and real property, of every kind and
description, and all buildings, structures, and
improvements of every nature located thereon, owned or
held by the Company and used or usable in the conduct of
the Company's business, together with any additions or
improvements made thereto.
"Related Person" - with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled
by such individual or one or more members of such
individual's Family;
(c) each Person that serves as a director, officer,
partner, executor, or trustee of such specified
Person (or in a similar capacity);
(d) any Person in which such specified Person holds a
Material Interest;
(e) any Person with respect to which such specified
Person serves as a general partner or a trustee (or
in a similar capacity); and
(f) any Related Person of any individual described in
clause (b) or (c).
For purposes of this definition, (a) the "family" of
an individual includes (i) the individual, (ii) the
individual's spouse [ and former spouses], (iii) any
other natural person who is related to the
individual or the individual's spouse within the
second degree, and (iv) any other natural person who
resides with such individual, and (b) "Material
Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of voting
securities or other voting interests representing at
least 5% of the outstanding voting power of a Person
or equity securities or other equity interests
representing at least 5% of the outstanding equity
securities or equity interests in a Person.
"Release" - any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other
releasing into the Environment, whether intentional or
unintentional.
"Representative" - with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor,
or other representative of such Person, including legal
counsel, accountants, and financial advisors.
"Securities Act" - the Securities Act of 1933 or any successor
law, and regulations and rules issued pursuant to that
Act or any successor law.
"Shares" - as defined in the recitals of this Agreement.
"Shareholders' Releases" - as defined in Section 2.4.
"Tax" - any tax (including any income tax, capital gains tax,
value-added tax, sales tax, use tax, payroll tax,
property tax, gift tax, or estate tax), levy, assessment,
tariff, duty (including any customs duty), deficiency, or
other fee, and any related charge or amount (including
any fine, penalty, interest, or addition to tax),
imposed, assessed, or collected by or under the authority
of any Governmental Body or payable pursuant to any tax-
sharing agreement or any other Contract relating to the
sharing or payment of any such tax, levy, assessment,
tariff, duty, deficiency, or fee.
"Tax Return" - any return (including any information return),
report, statement, schedule, notice, form, or other
document or information filed with or submitted to, or
required to be filed with or submitted to, any
Governmental Body in connection with the determination,
assessment, collection, or payment of any Tax or in
connection with the administration, implementation, or
enforcement of or compliance with any Legal Requirement
relating to any Tax.
"Threat of Release" - a substantial likelihood of a Release
that may require action in order to prevent or mitigate
damage to the Environment that may result from such
Release.
"Threatened" - a claim, Proceeding, dispute, action, or other
matter will be deemed to have been "Threatened" if any
demand or statement has been made (orally or in writing)
or any notice has been given (orally or in writing), or
if any other event has occurred or any other
circumstances exist, that would lead a prudent Person to
conclude that such a claim, Proceeding, dispute, action,
or other matter is likely to be asserted, commenced,
taken, or otherwise pursued in the future.
2. SALE AND TRANSFER OF SHARES: CLOSING
2.1 Shares
Subject to the terms and conditions of this Agreement, at the
Closing, the Shareholders will sell and transfer the Shares to
Purchaser, and Purchaser will purchase the Shares from the
Shareholders, free and clear of any adverse claims or
Encumbrances.
2.2 Purchase Price
The purchase price (the "Purchase Price") for the Shares will
be Forty-four Million One Hundred Thousand Dollars ($
44,100,000.00) plus or minus the Adjustment Amount.
2.3 Closing
The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of the Company,
1525 Kuebel Street, Harahan, Louisiana, at 10:00 a.m. (local
time) on the later of (i) October 31, 1996, (ii) the date
that is two business days following the termination of the
applicable waiting period under the HSR Act, (iii) the date
that is two business days following the complete fulfillment
or waiver of the conditions set forth in Sections 7 and 8, or
at such other time and place as the parties may agree.
Subject to the provisions of Section 9, failure to consummate
the purchase and sale provided for in this Agreement on the
date and time and at the place determined pursuant to this
Section 2.3 will not result in the termination of this
Agreement and will not relieve any party of any obligation
under this Agreement.
2.4 Closing Obligations
At the Closing:
(a) Shareholders will deliver to Purchaser:
(i) certificates representing the Shares, duly
endorsed (or accompanied by duly executed
stock powers), with signatures guaranteed by
a commercial bank or by a member firm of the
New York Stock Exchange, for transfer to
Purchaser;
(ii) releases in the form of Exhibit 2.4(a)(ii)
executed by Shareholders (collectively,
"Shareholders' Releases");
(iii) employment agreements in the form of
Exhibit 2.4(a)(iii), executed by certain
Shareholders (collectively, "Employment
Agreements");
(iv) noncompetition agreements in the form of
Exhibit 2.4(a)(iv), executed by those
Shareholders not executing Employment
Agreements (collectively, the "Noncompetition
Agreements"); and
(v) a certificate executed by the Company and
Shareholders representing and warranting to
Purchaser that each of the Company's and
Shareholders' representations and warranties in
this Agreement was accurate in all respects as
of the date of this Agreement and is accurate
in all respects as of the Closing Date as if
made on the Closing Date (giving full effect to
any supplements to the Disclosure Letter that
were delivered by the Company or Shareholders
to Purchaser prior to the Closing Date in
accordance with Section 5.5); and
(b) Purchaser will deliver to or on behalf of the
Shareholders:
(i) the sum of $ 4,500,000.00, plus an amount equal
to the estimated Adjustment Amount, to the
escrow agent referred to in Section 2.4(c) by
bank cashier's or certified check;
(ii) amounts equal to the Shareholders' legal and
accounting fees and expenses, and any
reimbursable expenses of Legacy Capital, as
determined at Closing;
(iii) the balance of the Purchase Price, less
the amounts referred to in (i) and (ii) above,
by bank cashier's or certified checks payable
in equal amounts to the order of, or by wire
transfer to accounts specified by, each of the
Shareholders;
(iv) a certificate executed by the Purchaser to
the effect that, except as otherwise stated in
such certificate, each of the Purchaser's
representations and warranties in this
Agreement was accurate in all respects as of
the date of this Agreement and is accurate in
all respects as of the Closing Date as if made
on the Closing Date; and
(v) the Employment Agreements, executed by the
Company.
(c) Purchaser and the Shareholders will enter into an
escrow agreement in the form of Exhibit 2.4(c) (the
"Escrow Agreement") with and escrow agent to be
agreed between the parties.
2.5 Adjustment Amount
The Adjustment Amount (which may be a positive or
negative number) will be equal to (a) the stockholder's equity
of the Company as of the Closing Date determined in accordance
with GAAP, but not to exceed $6,700,000.00, minus (b)
$5,700,000.00.
2.6 Adjustment Procedure
(a) The Company, at its expense, will prepare and will
cause LaPorte, Sehrt, Romig & Hand, the Company's
certified public accountants, to audit consolidated
financial statements ("Closing Financial
Statements") of the Company as of the Closing Date
and for the period from December 31, 1995 through
the Closing Date, including a computation of
Shareholders' equity as of the Closing Date. The
Shareholders will deliver the Closing Financial
Statements to Purchaser within sixty days after the
Closing Date. If within thirty days following
delivery of the Closing Financial Statements,
Purchaser has not given the Shareholders notice of
its objection to the Closing Financial Statements
(such notice must contain a statement of the basis
of Purchaser's objection), then the Shareholders'
equity reflected in the Closing Financial Statements
will be used in computing the Adjustment Amount. If
Purchaser gives such notice of objection, then the
issues in dispute will be submitted to a "big six"
accounting firm with an office in New Orleans
mutually acceptable to the Shareholders and
Purchaser (the "Accountants"), for resolution. If
issues in dispute are submitted to the Accountants
for resolution, (i) each party will furnish to the
Accountants such workpapers and other documents and
information relating to the disputed issues as the
Accountants may request and are available to that
party (or its independent public accountants), and
will be afforded the opportunity to present to the
Accountants any material relating to the
determination and to discuss the determination with
the Accountants; (ii) the determination by the
Accountants, as set forth in a notice delivered to
both parties by the Accountants, will be binding and
conclusive on the parties; and (iii) Purchaser and
Shareholders will each bear 50% of the fees of the
Accountants for such determination.
(b) On the tenth business day following the final
determination of the Adjustment Amount, if the
Adjustment Amount is equal to or greater than the
estimated Adjustment Amount deposited pursuant to
Section 2.4(b)(i), the escrow agent, upon written
direction from Purchaser and a representative of
Shareholders, will distribute the amount of the
estimated Adjustment Amount to Shareholders and
Purchaser will pay the difference, if any, to the
Shareholders. If the Purchase Price is less than
the estimated Adjustment Amount, the escrow agent,
upon written direction from Purchaser and a
representative of Shareholders, will pay the
difference between the estimated Adjustment Amount
and the Adjustment Amount as finally determined to
Purchaser. In addition, at the time of distribution
of said difference to Shareholders or Purchaser, the
escrow amount shall be reduced to Three Million
Dollars ($3,000,000) for the remainder of the escrow
period. All payments will be made together with
interest at the rate earned by the escrow,
compounded daily beginning on the Closing Date and
ending on the date of payment. Payments must be
made in immediately available funds. Payments to the
Shareholders must be made in the manner and will be
allocated equally between the Shareholders.
Payments to Purchaser must be made by wire transfer
to such bank account as Purchaser will specify.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND
SHAREHOLDERS
The Company and Shareholders jointly and severally
represent, warrant and covenant as follows:
3.1 Organization and Good Standing
(a) Part 3.1 of the Disclosure Letter contains a
complete and accurate list for the Company of its
name, its jurisdiction of incorporation, other
jurisdictions in which it is authorized to do
business, and its capitalization (including the
identity of each shareholder and the number of
shares held by each). The Company is a corporation
duly organized, validly existing, and in good
standing under the laws of its jurisdiction of
incorporation, with full corporate power and
authority to conduct its business as it is now being
conducted, to own or use the properties and assets
that it purports to own or use, and to perform all
its obligations under Applicable Contracts. Except
as disclosed in the Disclosure Letter, the Company
is duly qualified to do business as a foreign
corporation and is in good standing under the laws
of each state or other jurisdiction in which either
the ownership or use of the properties owned or used
by it, or the nature of the activities conducted by
it, requires such qualification.
(b) Shareholders have delivered to Purchaser copies of
the Organizational Documents of the Company, as
currently in effect.
3.2 Authority; No Conflict
(a) This Agreement constitutes the legal, valid, and
binding obligation of the Shareholders, enforceable
against the Shareholders in accordance with its
terms, subject to bankruptcy laws and laws affecting
the rights of creditors generally. Upon the
execution and delivery by the Shareholders of the
Escrow Agreement, the Employment Agreements, the
Shareholders' Releases, and the Noncompetition
Agreements (collectively, "Shareholders' Closing
Documents"), the Shareholders' Closing Documents
will constitute the legal, valid, and binding
obligations of the Shareholders, enforceable against
the Shareholders in accordance with their respective
terms, subject to bankruptcy laws and laws affecting
the rights of creditors generally. Each of the
Shareholders has the absolute and unrestricted
right, power, authority, and capacity to execute and
deliver this Agreement and the Shareholders' Closing
Documents and to perform their obligations under
this Agreement and the Shareholders' Closing
Documents.
(b) Except as set forth in Part 3.2 of the Disclosure
Letter, neither the execution and delivery of this
Agreement nor the consummation or performance of any
of the Contemplated Transactions will, directly or
indirectly (with or without notice or lapse of
time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the
Organizational Documents of the Company, or (B)
any resolution adopted by the board of
directors or the Shareholders of the Company;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or
other Person the right to challenge any of the
Contemplated Transactions or to exercise any
remedy or obtain any relief under, any Legal
Requirement or any Order to which the Company
or any Shareholder, or any of the assets owned
or used by the Company, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements
of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate,
or modify, any Governmental Authorization that
is held by the Company or that otherwise
relates to the business of, or any of the
assets owned or used by, the Company;
(iv) contravene, conflict with, or result in a
violation or breach of any provision of, or
give any Person the right to declare a default
or exercise any remedy under, or to accelerate
the maturity or per-formance of, or to cancel,
terminate, or modify, any Applicable Contract;
or
(vii) result in the imposition or creation of
any Encumbrance upon or with respect to any of
the assets owned or used by the Company.
Except as set forth in Part 3.2 of the Disclosure
Letter, no Shareholder or the Company is or will be
required to give any notice to or obtain any Consent from
any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of
any of the Contemplated Transactions.
3.3 Capitalizations
The authorized equity securities of the Company consist
of 10,000 shares of no par value common stock, of which 4,176
shares are issued, 2,088 shares are held as treasury shares,
and 2,088 shares are issued and outstanding and constitute the
Shares. The Shareholders are and will be on the Closing Date
the record and beneficial owners and holders of the Shares,
free and clear of all Encumbrances. The Shares are owned by
the Shareholders as follows:
Cynthia Lagasse 298.286 Shares
Rickey Lagasse 298.286 Shares
Kevin C. Lagasse 298.286 Shares
Linette Lagasse Abadie 298.286 Shares
Clinton G. Lagasse 298.286 Shares
David C. Lagasse 298.286 Shares
Raymond J. Lagasse 298,286 Shares
Except for restrictions on transferability, which each
Shareholder waives, and restrictions regarding applicable
securities laws, no legend or other reference to any purported
Encumbrance appears upon any certificate representing equity
securities of the Company. All of the outstanding equity
securities of the Company have been duly authorized and
validly issued and are fully paid and nonassessable. There
are no Contracts relating to the issuance, sale, or transfer
of any equity securities or other securities of the Company.
To the best of Shareholders' Knowledge, none of the
outstanding equity securities or other securities of the
Company was issued in violation of the Securities Act or any
other Legal Requirement. The Company does not own, or have
any Contract to acquire, any equity securities or other
securities of any Person, or any direct or indirect equity or
ownership interest in any other business.
3.4 Financial Statements
Shareholders have delivered to Purchaser:
(a) audited balance sheets of the Company as at December
31 in each of the years 1992 through 1995 , and the
related statements of income, changes in
Shareholders' equity, and cash flow for each of the
fiscal years then ended, together with the report
thereon of LaPorte, Sehrt, Romig & Hand, independent
certified public accountants (the "Audited
Statements"),
(b) an unaudited balance sheet of the Company as at
August 31, 1996 (the "Interim Balance Sheet") and
the related unaudited statements of income, changes
in Shareholders' equity, and cash flow for the
months then ended.
The financial statements reflect no information
known or believed by the Company or any Shareholder to be
false, and fairly present the financial condition and the
results of operations, changes in Shareholders' equity,
and cash flow of the Company as at the respective dates
of and for the periods referred to in such financial
statements, all in accordance with GAAP, subject, in the
case of interim financial statements, to normal recurring
year-end adjustments (the effect of which will not,
individually or in the aggregate, be materially adverse),
the absence of taking physical inventories, and the
absence of notes (that, if presented, would not differ
materially from those included in the Audited
Statements). The financial statements referred to in this
Section 3.4 reflect the consistent application of such
accounting principles throughout the periods involved,
except as disclosed in the notes to such financial
statements. No financial statements of any Person other
than the Company are required by GAAP to be included in
the financial statements of the Company.
3.5 Books and Records
The Company has provided copies of the minutes of meetings of
the directors of the Company which fairly reflect all meetings
held of, and corporate action taken by, , the Board of
Directors of the Company, and no meeting of any such Board of
Directors has been held for which minutes have not been
prepared and have not been provided to Purchaser. At or prior
to Closing, the Company and Shareholders will provide
Purchaser with appropriate minutes, and/or unanimous consents
in lieu of minutes, reflecting the due elections of directors
and officers of the Company.
3.6 Title to Properties; Encumbrances
Part 3.6 of the Disclosure Letter contains a complete and
accurate list of all real property, leaseholds, or other
interests therein owned by the Company. The Company has
delivered or made available to Purchaser copies of the deeds
and other instruments (as recorded) by which the Company
acquired such real property and interests, and copies of all
title insurance policies, opinions, abstracts, and surveys in
the possession of the Company and relating to such property or
interests. The Company owns (with good and marketable title in
the case of real property, subject only to the matters
permitted by the following sentence) all the properties and
assets (whether real, personal, or mixed and whether tangible
or intangible) that it purports to own located in the
facilities owned or operated by the Company or reflected as
owned in the books and records of the Company, including all
of the properties and assets reflected in the Interim Balance
Sheet (except for assets held under capitalized leases
disclosed or not required to be disclosed in Part 3.6 of the
Disclosure Letter and personal property sold since the date of
the Interim Balance Sheet, as the case may be, in the Ordinary
Course of Business). All material properties and assets
reflected in the Interim Balance Sheet are free and clear of
all Encumbrances and are not, in the case of real property,
subject to any rights of way, building use restrictions,
exceptions, variances, reservations, or limitations of any
nature except, with respect to all such properties and assets,
(a) mortgages or security interests shown on the Interim
Balance Sheet as securing specified liabilities or
obligations, with respect to which no default (or event that,
with notice or lapse of time or both, would constitute a
default) exists, (b) mortgages or security interests incurred
in connection with the purchase of property or assets after
the date of the Interim Balance Sheet (such mortgages and
security interests being limited to the property or assets so
acquired), with respect to which no default (or event that,
with notice or lapse of time or both, would constitute a
default) exists, (c) liens for current taxes not yet due, and
(d) with respect to real property, (i) minor imperfections of
title, if any, none of which is substantial in amount,
materially detracts from the value or impairs the use of the
property subject thereto, or impairs the operations of the
Company, and (ii) zoning laws and other land use restrictions
that do not impair the present or anticipated use of the
property subject thereto. All buildings, plants, and
structures owned by the Company lie wholly within the
boundaries of the real property owned by the Company and do
not encroach upon the property of, or otherwise conflict with
the property rights of, any other Person.
3.7 Condition and Sufficiency of Assets
The buildings, plants, structures, and equipment of the
Company are structurally sound, are in good operating
condition and repair, and are adequate for the uses to which
they are being put, and none of such buildings, plants,
structures, or equipment is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are
not material in nature or cost. The building, plants,
structures, and equipment of the Company are sufficient for
the continued conduct of the Company's business after the
Closing in substantially the same manner as conducted prior to
the Closing.
3.8 Accounts Receivable
All accounts receivable of the Company that are reflected
on the Interim Balance Sheet or on the accounting records of
the Company as of the Closing Date (collectively, the
"Accounts Receivable") represent or will represent valid
obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. The
respective reserves shown on the Interim Balance Sheet or on
the accounting records of the Company as of the Closing Date
are adequate and calculated consistent with past practice and,
in the case of the reserve as of the Closing Date, will not
represent a material adverse change in the composition of such
Accounts Receivable in terms of aging). There is no contest,
claim, or right of set-off, other than returns in the Ordinary
Course of Business, under any Contract with any obligor of an
Accounts Receivable relating to the amount or validity of such
Accounts Receivable. Part 3.8 of the Disclosure Letter
contains a complete and accurate list of all Accounts
Receivable as of the date of the Interim Balance Sheet, which
list sets forth the aging of such Accounts Receivable.
3.9 Inventory
All inventory of the Company, whether or not reflected in
the Balance Sheet or the Interim Balance Sheet, consists of a
quality and quantity usable and salable in the Ordinary Course
of Business, except for obsolete items and items of below-
standard quality, all of which have been written off or
written down to net realizable value in the Interim Balance
Sheet or on the accounting records of the Company as of the
Closing Date, as the case may be. All inventories not written
off have been priced at the lower of cost or market on a first
in, first out basis. Neither Company nor Shareholders have any
information or reasonable grounds to believe that such
inventory will not be as salable in the future as it was on
August 31, 1996.
3.10 No Undisclosed Liabilities
Except as set forth in Part 3.10 of the Disclosure Letter, the
Company has no liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued,
contingent, or otherwise) except for liabilities or
obligations reflected or reserved against in the Interim
Balance Sheet or the Closing Financial Statement, and current
liabilities incurred in the Ordinary Course of Business since
the date thereof.
3.11 Taxes
(a) The Company has filed or caused to be filed (on a
timely basis) all Tax Returns that are or were
required to be filed by or with respect to it,
pursuant to applicable Legal Requirements. The
Shareholders have delivered to Purchaser copies of,
and Part 3.11 of the Disclosure Letter contains a
complete and accurate list of, all such Tax Returns
filed since December 31, 1991. The Company has
paid, or made provision for the payment of, all
Taxes that have or may have become due pursuant to
those Tax Returns or otherwise, or pursuant to any
assessment received by the Company or the
Shareholders, except such Taxes, if any, as are
listed in Part 3.1 1 of the Disclosure Letter and
are being contested in good faith and as to which
adequate reserves (determined in accordance with
GAAP) have been provided in the Balance Sheet and
the Interim Balance Sheet.
(b) The United States federal and state income Tax
Returns of the Company have been audited by the IRS
or relevant state tax authorities or are closed by
the applicable statute of limitations for all
taxable years through 1992. Part 3.11 of the
Disclosure Letter contains a complete and accurate
list of all audits of all such Tax Returns,
including a reasonably detailed description of the
nature and outcome of each audit. All deficiencies
proposed as a result of such audits have been paid,
reserved against, settled, or, as described in Part
3.11 of the Disclosure Letter, are being contested
in good faith by appropriate proceedings. There have
been no adjustments to the United States federal
income Tax Returns filed by the Company. Except as
described in Part 3.11 of the Disclosure Letter, no
Shareholder or the Company has given or been
requested to give waivers or extensions (or is or
would be subject to a waiver or extension given by
any other Person) of any statute of limitations
relating to the payment of Taxes of the Company or
for which the Company may be liable.
(c) The charges, accruals, and reserves with respect to
Taxes on the Closing Financial Statement will be at
least equal to the Company's liability for Taxes.
There exists no proposed tax assessment against the
Company except as disclosed in the Balance Sheet or
in Part 3.11 of the Disclosure Letter. No consent
to the application of Section 341(f)(2) of the IRC
has been filed with respect to any property or
assets held, acquired, or to be acquired by the
Company. All Taxes that the Company is or was
required by Legal Requirements to withhold or
collect have been duly withheld or collected and, to
the extent required, have been paid to the proper
Governmental Body or other Person.
(d) All Tax Returns filed by the Company are, to the
best of the Company's and Shareholders' knowledge
and belief, true, correct, and complete. There is
no tax sharing agreement that will require any
payment by the Company after the date of this
Agreement. The Company is not, nor within the five-
year period preceding the Closing Date has been, an
"S" corporation.
3.12 No Material Adverse Change
Since the date of the Interim Balance Sheet, there has
not been any material adverse change in the business,
operations, properties, prospects, assets, or condition of the
Company, and, to the best of the Company's and Shareholder's
knowledge and belief, no event has occurred or circumstance
exists that may result in such a material adverse change.
3.13 Employee Benefits
(a) As used in this Section 3.13, the following terms
have the meanings set forth below.
"Company Other Benefit Obligation" means an Other Benefit
Obligation owed, adopted, or followed by the Company
or an ERISA Affiliate of the Company.
"Company Plan" means all Plans of which the Company or an
ERISA Affiliate of the Company is or was a Plan
Sponsor, or to which the Company or an ERISA
Affiliate of the Company otherwise contributes or
has contributed, or in which the Company or an ERISA
Affiliate of the Company otherwise participates or
has participated. All references to Plans are to
Company Plans unless the context requires otherwise.
"ERISA Affiliate" means, with respect to the Company, any
other person that, together with the Company, would
be treated as a single employer under IRC 414.
"Multi-Employer Plan" has the meaning given in ERISA
3(37)(A).
"Other Benefit Obligations" means all obligations,
arrangements, or customary practices, whether or not
legally enforceable, to provide benefits, other than
salary, as compensation for services rendered, to
present or former directors, employees, or agents,
other than obligations, arrangements, and practices
that are Plans. Other Benefit Obligations include
consulting agreements under which the compensation
paid does not depend upon the amount of service
rendered, sabbatical policies, severance payment
policies, and fringe benefits within the meaning of
IRC 132.
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Pension Plan" has the meaning given in ERISA 3(2)(A).
"Plan" has the meaning given in ERISA 3(3).
"Plan Sponsor" has the meaning given in ERISA 3(1
6)(B).
"Qualified Plan" means any Plan that meets or purports
to meet the requirements of IRC 401(a).
"Title IV Plans" means all Pension Plans that are
subject to Title IV of ERISA, 29 U.S.C. 1301 et
seq., other than Multi-Employer Plans.
"VEBA" means a voluntary employees' beneficiary
association under IRC 501(c)(9).
"Welfare Plan " has the meaning given in ERISA 3(1).
(b) (i) Part 3.13(i) of the Disclosure Letter
contains a complete and accurate list of all
Company Plans and Company Other Benefit
Obligations, and identifies as such all Company
Plans that are (A) defined benefit Pension
Plans, (B) Qualified Plans, (C) Title IV Plans,
or (D) Multi-Employer Plans.
(ii) Part 3.13(ii) of the Disclosure Letter
contains a complete and accurate list of (A)
all ERISA Affiliates of the Company, and (B)
all Plans of which any such ERISA Affiliate is
or was a Plan Sponsor, in which any such ERISA
Affiliate participates or has participated, or
to which any such ERISA Affiliate contributes
or has contributed.
(iii) Part 3.13(iii) of the Disclosure Letter
sets forth the financial cost of all
obligations owed under any Company Plan or
Company Other Benefit Obligation that is not
subject to the disclosure and reporting
requirements of ERISA.
(c) The Company has delivered to Purchaser, or will
deliver to Purchaser within ten days of the date of
this Agreement:
(i) all documents that set forth the terms of each
Company Plan or Company Other Benefit
Obligation, and of any related trust, including
(A) all plan descriptions and summary plan
descriptions of Company Plans for which the
Shareholders or the Company are required to
prepare, file, and distribute plan descriptions
and summary plan descriptions, and (B) all
summaries and descriptions furnished to
participants and beneficiaries regarding
Company Plans and Company Other Benefit
Obligations for which a plan description or
summary plan description is not required;
(ii) all personnel, payroll, and employment
manuals and policies;
(iii) a written description of any Company Plan
or Company Other Benefit Obligation that is not
otherwise in writing;
(iv) all insurance policies purchased by or to
provide benefits under any Company Plan;
(v) all contracts with third party administrators,
actuaries, investment managers, consultants,
and other independent contractors that relate
to any Company Plan or Company Other Benefit
Obligation;
(vi) all reports submitted within the four
years preceding the date of this Agreement by
third party administrators, actuaries,
investment managers, consultants, or other
independent contractors with respect to any
Company Plan or Company Other Benefit
Obligation;
(vii) all notifications to employees of their
rights under ERISA 601 et seq. and IRC
4980B within the three-year period preceding
the date of this Agreement;
(viii) the Form 5500 filed in each of the most
recent three plan years with respect to each
Company Plan, including all schedules thereto
and the opinions of independent accountants;
and
(ix) with respect to Qualified Plans, the most
recent determination letter for each Plan of
the Company that is a Qualified Plan.
(d) Except as set forth in Part 3.13(d) of the
Disclosure Letter:
(i) The Company has performed all of its
obligations under all Company Plans and Company
Other Benefit Obligations. The Company has
made appropriate entries in their financial
records and statements for all obligations and
liabilities under such Company Plans and
Obligations that have accrued but are not due.
(ii) No statement, either written or oral, has
been made by the Company to any Person with
regard to any Company Plan or Company Other
Benefit Obligation that was not in accordance
with the Plan or Other Benefit Obligation and
that could have an adverse economic consequence
to the Company or to Purchaser.
(iii) The Company, with respect to all Company
Plans and Company Other Benefits Obligations
is, and each Company Plan and Company Other
Benefit Obligation is, in full compliance with
ERISA, the IRC, and other applicable Laws
including the provisions of such Laws expressly
mentioned in this Section 3.13.
(A) No transaction prohibited by ERISA 406
and no "prohibited transaction" under IRC
4975(c) have occurred with respect to
any Company Plan.
(B) No Shareholder or the Company has any
liability to the IRS with respect to any
Plan, including any liability imposed by
Chapter 43 of the IRC.
(C) No Shareholder or the Company has any
liability to the PBGC with respect to any
Plan or has any liability under ERISA
502 or 4071.
(D) Except for the filing of Form 5500 for
1995, which is presently under authorized
extension and will be filed prior to
Closing, all filings required by ERISA and
the IRC as to each Company Plan have been
timely filed, and all notices and
disclosures to participants required by
either ERISA or the IRC have been timely
provided.
(E) All contributions and payments made or
accrued with respect to all Company Plans
and Company Other Benefit Obligations are
deductible under IRC 162 or 404. No
amount, or any asset of any Company Plan
is subject to tax as unrelated business
taxable income.
(iv) Since July 1, 1996, there has been no
establishment or amendment of any Company Plan
or Company Other Benefit Obligation.
(v) No event has occurred or circumstance exists
that could result in a material increase in
premium costs of Company Plans and Company
Other Benefit Obligations that are insured, or
a material increase in benefit costs of such
Company Plans and Company Other Benefit
Obligations that are self-insured.
(vi) Other than claims for benefits submitted
by participants or beneficiaries, no claim
against, or legal proceeding involving, any
Company Plan or Company Other Benefit
Obligation is pending or, to the Company's or
Shareholders' Knowledge, is Threatened.
(vii) No Company Plan is a stock bonus or
pension plan within the meaning of IRC
401(a).
(viii) Each Qualified Plan of the Company is
qualified in form and operation under IRC
401(a); each trust for each such Plan is exempt
from federal income tax under IRC 501(a). No
event has occurred or circumstance exists that
will or could give rise to disqualification or
loss of tax-exempt status of any such Plan or
trust.
(ix) The Company and each ERISA Affiliate of
the Company has met the minimum funding
standard, and has made all contributions
required, under ERISA 302 and IRC 402.
(x) No Company Plan is subject to Title IV of
ERISA.
(xi) Neither the Company nor any ERISA
Affiliate of the Company has filed a notice of
intent to terminate any Plan or has adopted any
amendment to treat a Plan as terminated.
(xii) Neither the Company nor any ERISA
Affiliate of the Company has ever established,
maintained, or contributed to or otherwise
participated in, or had an obligation to
maintain, contribute to, or otherwise
participate in, any Multi-Employer Plan.
(xii) Neither the Company nor any ERISA
Affiliate of the Company is a sponsor of or is
required to make any contribution to any VEBA,
including any VEBA where members may include
employees of the Company or any ERISA Affiliate
of the Company.
(xiii) Neither the Company nor any ERISA
Affiliate of the Company has made contributions
or incurred obligations (including both pension
and welfare benefits) or is obligated to make
any contribution or provide any benefit under
any collective bargaining agreement.
(xiv) Except to the extent required under ERISA
601 et seq. and IRC 4980B, the Company
provides no health or welfare benefits for any
retired or former employee or is obligated to
provide health or welfare benefits to any
active employee following such employee's
retirement or other termination of service.
(xv) The Company has the right to modify and
terminate benefits to retirees (other than
pensions) with respect to both retired and
active employees.
(xvi) The Company has complied with the
provisions of ERISA 601 et seq. and IRC
4980B.
(xvii) No payment that is owed or may become due
to any director, officer, employee, or agent of
the Company will be non-deductible to the
Company or subject to tax under IRC 280G or
4999; nor will the Company be required to
"gross up" or otherwise compensate any such
person because of the imposition of any excise
tax on a payment to such person.
(xviii) The consummation of the Contemplated
Transactions will not result in the payment,
vesting, or acceleration of any benefit.
3.14 Compliance With Legal Requirements; Governmental
Authorizations
(a) Except as set forth in Part 3.14 of the Disclosure
Letter:
(i) the Company is, and at all times since December
31, 1991, has been, in full compliance with
each Legal Requirement that is or was
applicable to it or to the conduct or operation
of its business or the ownership or use of any
of its assets, except where any noncompliance
does not have a material adverse effect on the
operations or assets of the Company;
(ii) except where violations or failure would
not have a material adverse effect on the
operations or assets of the Company, no event
has occurred or circumstance exists that (with
or without notice or lapse of time) (A) may
constitute or result in a violation by the
Company of, or a failure on the part of the
Company to comply with, any Legal Requirement,
or (B) may give rise to any obligation on the
part of the Company to undertake, or to bear
all or any portion of the cost of, any remedial
action of any nature; and
(iii) the Company has not received, at any time
since December 31, 1991, any notice or other
communication (whether oral or written) from
any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply
with, any Legal Requirement, or (B) any actual,
alleged, possible, or potential obligation on
the part of the Company to undertake, or to
bear all or any portion of the cost of, any
remedial action of any nature.
(b) Part 3.14 of the Disclosure Letter contains a
complete and accurate list of each Governmental
Authorization that is held by the Company or that
otherwise relates to the business of, or to any of
the assets owned or used by, the Company. Each
Governmental Authorization listed or required to be
listed in Part 3.14 of the Disclosure Letter is
valid and in full force and effect. Except as set
forth in Part 3.14 of the Disclosure Letter:
(i) the Company is, and at all times since December
31, 1991 has been, in material compliance with
all of the terms and requirements of each
Governmental Authorization identified or
required to be identified in Part 3.14 of the
Disclosure Letter;
(ii) no event has occurred or circumstance
exists that may (with or without notice or
lapse of time) (A) constitute or result
directly or indirectly in a violation of or a
failure to comply with any term or requirement
of any Governmental Authorization listed or
required to be listed in Part 3.14 of the
Disclosure Letter, or (B) result directly or
indirectly in the revocation, withdrawal,
suspension, cancellation, or termination of, or
any modification to, any Governmental
Authorization listed or required to be listed
in Part 3.14 of the Disclosure Letter;
(iii) the Company has not received, at any time
since December 31, 1991, any notice or other
communication (whether oral or written) from
any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply
with any term or requirement of any
Governmental Authorization, or (B) any actual,
proposed, possible, or potential revocation,
withdrawal, suspension, cancellation,
termination of, or modification to any
Governmental Authorization; and
(iv) all applications required to have been
filed for the renewal of the Governmental
Authorizations listed or required to be listed
in Part 3.14 of the Disclosure Letter have been
duly filed on a timely basis with the
appropriate Governmental Bodies, and all other
filings required to have been made with respect
to such Governmental Authorizations have been
duly made on a timely basis with the
appropriate Governmental Bodies.
The Governmental Authorizations listed in Part 3.14 of
the Disclosure Letter collectively constitute all of the
Governmental Authorizations necessary to permit the Company to
lawfully conduct and operate its businesses in the manner it
currently conducts and operates such business and to permit
the Company to own and use its assets in the manner in which
it currently owns and uses such assets, except where the
failure to obtain such Governmental Authorization does not or
will not have a material adverse effect on the operations or
assets of the Company.
3.15 Legal Proceedings; Orders
(a) Except as set forth in Part 3 .15 of the
Disclosure Letter, there is no pending Proceeding:
(i) that has been commenced by or against the
Company or that otherwise relates to or may
affect the business of, or any of the assets
owned or used by, the Company; or
(ii) that challenges, or that may have the
effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the
Contemplated Transactions.
To the Knowledge of Shareholders and the Company, (1) no
such Proceeding has been Threatened, and (2) no event has
occurred or circumstance exists that may give rise to or serve
as a basis for the commencement of any such Proceeding.
Shareholders have delivered to Purchaser copies of all
pleadings, correspondence, and other documents relating to
each Proceeding listed in Part 3.15 of the Disclosure Letter.
The Proceedings listed in Part 3.15 of the Disclosure Letter
will not have a material adverse effect on the business,
operations, assets, condition, or prospects of the Company.
(b) Except as set forth in Part 3.15 of the Disclosure
Letter:
(i) there is no Order to which the Company, or any
of the assets owned or used by the Company, is
subject;
(ii) no Shareholder is subject to any Order
that relates to the business of, or any of the
assets owned or used by, the Company; and
(iii) no officer, director, agent, or employee
of the Company is subject to any Order that
prohibits such officer, director, agent, or
employee from engaging in or continuing any
conduct, activity, or practice relating to the
business of the Company.
(c) Except as set forth in Part 3.15 of the Disclosure
Letter:
(i) the Company is, and at all times since December
31, 1991 has been, in full compliance with all
of the terms and requirements of each Order to
which it, or any of the assets owned or used by
it, is or has been subject;
(ii) no event has occurred or circumstance
exists that may constitute or result in (with
or without notice or lapse of time) a violation
of or failure to comply with any term or
requirement of any Order to which the Company,
or any of the assets owned or used by the
Company, is subject; and
(iii) the Company has not received, at any time
since December 31, 1991, any notice or other
communication (whether oral or written) from
any Governmental Body or any other Person
regarding any actual, alleged, possible, or
potential violation of, or failure to comply
with, any term or requirement of any Order to
which the Company, or any of the assets owned
or used by the Company, is or has been subject.
3.16 Absence of Certain Changes and Events
Except as set forth in Part 3.16 of the Disclosure
Letter, since the date of the Audited Financial Statements,
the Company has conducted its business only in the Ordinary
Course of Business and there has not been any:
(a) change in the Company's authorized or issued capital
stock; grant of any stock option or right to
purchase shares of capital stock of the Company;
issuance of any security convertible into such
capital stock; grant of any registration rights;
purchase, redemption, retirement, or other
acquisition by the Company of any shares of any such
capital stock; or declaration or payment of any
dividend or other distribution or payment in respect
of shares of capital stock;
(b) amendment to the Organizational Documents of the
Company;
(c) payment or increase by the Company of any bonuses,
salaries, or other compensation to any shareholder,
director, officer, or (except in the Ordinary Course
of Business) employee or entry into any employment,
severance, or similar Contract with any director,
officer, or employee;
(d) adoption of, or increase in the payments to or
benefits under, any profit sharing, bonus, deferred
compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or
with any employees of the Company;
(e) damage to or destruction or loss of any asset or
property of the Company, whether or not covered by
insurance, materially and adversely affecting the
properties, assets, business, financial condition,
or prospects of the Company, taken as a whole;
(f) entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship,
dealer, sales representative, joint venture, credit,
or similar agreement, or (ii) any Contract or
transaction involving a total remaining commitment
by or to the Company of at least $100,000.00;
(g) sale (other than sales of inventory in the Ordinary
Course of Business), lease, or other disposition of
any asset or property of the Company or mortgage,
pledge, or imposition of any lien or other
encumbrance on any material asset or property of the
Company, including the sale, lease, or other
disposition of any of the Intellectual Property
Assets;
(h) cancellation or waiver of any claims or rights with
a value to the Company in excess of $100,000.00;
(i) material change in the accounting methods used by
the Company; or
(j) agreement, whether oral or written, by the Company
to do any of the foregoing.
3.17 Contracts; No Defaults
(a) Part 3 . l 7(a) of the Disclosure Letter contains a
complete and accurate list, and Shareholders have
delivered to Purchaser true and complete copies, of:
(i) each Applicable Contract that involves
performance of services or delivery of goods or
materials by the Company of an amount or value
in excess of $ 15,000.00;
(ii) each Applicable Contract that involves
performance of services or delivery of goods or
materials to the Company of an amount or value
in excess of $ 15,000.00;
(iii) each Applicable Contract that was not
entered into in the Ordinary Course of Business
and that involves expenditures or receipts of
the Company in excess of $ 15,000.00
(iv) each lease, rental or occupancy agreement,
license, installment and conditional sale
agreement, and other Applicable Contract
affecting the ownership of, leasing of, title
to, use of, or any leasehold or other interest
in, any real or personal property (except
personal property leases and installment and
conditional sales agreements having a value per
item or aggregate payments of less than
$10,000.00 and with terms of less than
one year);
(v) each licensing agreement or other Applicable
Contract with respect to patents, trademarks,
copyrights, or other intellectual property,
including agreements with current or former
employees, consultants, or contractors
regarding the appropriation or the
nondisclosure of any of the Intellectual
Property Assets;
(vi) each collective bargaining agreement and
other Applicable Contract to or with any labor
union or other employee representative of a
group of employees;
(vii) each joint venture, partnership, and other
Applicable Contract (however named) involving a
sharing of profits, losses, costs, or
liabilities by the Company with any other
Person;
(viii) each Applicable Contract containing
covenants that in any way purport to restrict
the business activity of the Company or any
Affiliate of the Company or limit the freedom
of the Company or any Affiliate of the Company
to engage in any line of business or to compete
with any Person;
(ix) each Applicable Contract providing for
payments to or by any Person based on sales,
purchases, or profits, other than direct
payments for goods;
(x) each power of attorney that is currently
effective and outstanding;
(xi) each Applicable Contract entered into
other than in the Ordinary Course of Business
that contains or provides for an express
undertaking by the Company to be responsible
for consequential damages;
(xii) each Applicable Contract for capital
expenditures, including any Contract for
computer and telephone systems hardware and
software, and any other Contract in excess of
$15,000.00;
(xiii) each written warranty, guaranty, and or
other similar undertaking with respect to
contractual performance extended by the Company
other than in the Ordinary Course of Business;
and
(xiv) each amendment, supplement, and
modification (whether oral or written) in
respect of any of the foregoing. Part 3.17(a)
of the Disclosure Letter sets forth reasonably
complete details concerning such Contracts,
including the parties to the Contracts, the
amount of the remaining commitment of the
Company under the Contracts, and the Company's
office where details relating to the Contracts
are located.
(b) Except as set forth in Part 3.17(b) of the
Disclosure Letter:
(i) no Shareholder (and no Related Person of any
Shareholder) has or may acquire any rights
under, and no Shareholder has or may become
subject to any obligation or liability under,
any Contract that relates to the business of,
or any of the assets owned or used by, the
Company; and
(ii) no officer, director, agent, employee,
consultant, or contractor of the Company is
bound by any Contract that purports to limit
the ability of such officer, director, agent,
employee, consultant, or contractor to (A)
engage in or continue any conduct, activity, or
practice relating to the business of the
Company, or (B) assign to the Company or to any
other Person any rights to any invention,
improvement, or discovery.
(c) Except as set forth in Part 3.17(c) of the
Disclosure Letter, each Contract identified or
required to be identified in Part 3.17(a) of the
Disclosure Letter is in full force and effect and is
valid and enforceable in accordance with its terms.
(d) Except as set forth in Part 3.17(d) of the
Disclosure Letter:
(i) the Company is, and at all times since December
31,1991 has been, in full compliance with all
applicable terms and requirements of each
Contract under which the Company has or had any
obligation or liability or by which the Company
or any of the assets owned or used by the
Company is or was bound;
(ii) each other Person that has or had any
obligation or liability under any Contract
under which the Company has or had any rights
is, and at all times since December 31, 1991
has been, in full compliance with all
applicable terms and requirements of such
Contract;
(iii) no event has occurred or circumstance
exists that (with or without notice or lapse of
time) may contravene, conflict with, or result
in a violation or breach of, or give the
Company or other Person the right to declare a
default or exercise any remedy under, or to
accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable
Contract; and
(iv) the Company has not given to or received
from any other Person, at any time since
December 31, 1991, any notice or other
communication (whether oral or written)
regarding any actual, alleged, possible, or
potential violation or breach of, or default
under, any Contract.
(e) There are no renegotiations of, attempts to
renegotiate, or outstanding rights to renegotiate
any material amounts paid or payable to the Company
under current or completed Contracts with any Person
and no such Person has made written demand for such
renegotiation.
(f) The Contracts relating to the sale, design,
manufacture, or provision of products or services by
the Company have been entered into in the Ordinary
Course of Business and have been entered into
without the commission of any act alone or in
concert with any other Person, or any consideration
having been paid or promised, that is or would be in
violation of any Legal Requirement.
3.18 Insurance
(a) Shareholders have delivered to Purchaser:
(i) true and complete copies of all policies of
insurance to which the Company is a party or
under which the Company, or any director of the
Company, is or has been covered at any time
within the five years preceding the date of
this Agreement;
(ii) true and complete copies of all pending
applications for policies of insurance; and
(iii) any statement by the auditor of the
Company's financial statements with regard to
the adequacy of such entity's coverage or of
the reserves for claims.
(b) Part 3.18(b) of the Disclosure Letter describes:
(i) any self-insurance arrangement by or affecting
the Company, including any reserves established
thereunder;
(ii) any contract or arrangement, other than a
policy of insurance, for the transfer or
sharing of any risk by the Company; and
(iii) all obligations of the Company to third
parties with respect to insurance (including
such obligations under leases and service
agreements) and identifies the policy under
which such coverage is provided.
(c) Part 3.18(c) of the Disclosure Letter sets forth, by
year, for the current policy year and each of the 3
preceding policy years:
(i) a summary of the loss experience under each
policy;
(ii) a statement describing each claim under an
insurance policy for an amount in excess of $
, which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer,
type of insurance, and period of coverage;
and
(C) the amount and a brief description of the
claim; and
(iii) a statement describing the loss experience
for all claims that were self-insured,
including the number and aggregate cost of such
claims.
(d) Except as set forth on Part 3.18(d) of the
Disclosure Letter:
(i) All policies to which the Company is a party or
that provide coverage to any Shareholder, the
Company, or any director or officer of the
Company:
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is
financially sound and reputable;
(C) taken together, provide adequate insurance
coverage for the assets and the operations
of the Company for all risks normally
insured against by a Person carrying on
the same business or businesses as the
Company;
(D) are sufficient for compliance with all
Legal Requirements and Contracts to which
the Company is a party or by which it is
bound;
(E) will continue in full force and effect
following the consummation of the
Contemplated Transactions; and
(F) do not provide for any retrospective
premium adjustment or other experienced-
based liability on the part of the
Company.
(ii) No Shareholder or the Company has received
(A) any refusal of coverage or any notice that
a defense will be afforded with reservation of
rights, or (B) any notice of cancellation or
any other indication that any insurance policy
is no longer in full force or effect or will
not be renewed or that the issuer of any policy
is not willing or able to perform its
obligations thereunder.
(iii) The Company has paid all premiums due, and
has otherwise performed all of its obligations,
under each policy to which the Company is a
party or that provides coverage to the Company
or any officer or director thereof.
(iv) The Company has given notice to the
insurer of all claims that may be insured
thereby.
3.19 Environmental Matters
Except as set forth in part 3.19 of the disclosure
letter:
(a) the Company is, and at all times has been, in full
compliance with, and has not been and is not in
violation of or liable under, any Environmental Law.
No Shareholder or the Company has any basis to
expect, nor has any of them or any other Person for
whose conduct they are or may be held to be
responsible received, any actual or Threatened
order, notice, or other communication from (I) any
Governmental Body or private citizen acting in the
public interest, or (ii) the current or prior owner
or operator of any Facilities, of any actual or
potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any
Environmental, Health, and Safety Liabilities with
respect to any of the Facilities or any other
properties or assets (whether real, personal, or
mixed) in which Shareholders or the Company has had
an interest, or with respect to any property or
Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred,
imported, used, or processed by Shareholders, the
Company, or any other Person for whose conduct they
are or may be held responsible, or from which
Hazardous Materials have been transported, treated,
stored, handled, transferred, disposed, recycled, or
received.
(b) There are no pending or, to the Knowledge of
Shareholders and the Company, Threatened claims,
Encumbrances, or other restrictions of any nature,
resulting from any Environmental, Health, and Safety
Liabilities or arising under or pursuant to any
Environmental Law, with respect to or affecting any
of the Facilities or any other properties and assets
(whether real, personal, or mixed) in which
Shareholders or the Company has or had an interest.
(c) No Shareholder or the Company has Knowledge of any
basis to expect, nor has any of them or any other
Person for whose conduct they are or may be held
responsible, received, any citation, directive,
inquiry, notice, Order, summons, warning, or other
communication that relates to Hazardous Activity,
Hazardous Materials, or any alleged, actual, or
potential violation or failure to comply with any
Environmental Law, or of any alleged, actual, or
potential obligation to undertake or bear the cost
of any Environmental, Health, and Safety Liabilities
with respect to any of the Facilities or any other
properties or assets (whether real, personal, or
mixed) in which Shareholders or the Company had an
interest, or with respect to any property or
facility to which Hazardous Materials generated,
manufactured, refined, transferred, imported, used,
or processed by Shareholders, the Company, or any
other Person for whose conduct they are or may be
held responsible, have been transported, treated,
stored, handled, transferred, disposed, recycled, or
received.
(d) No Shareholder or the Company, or any other Person
for whose conduct they are or may be held
responsible, has any Environmental, Health, and
Safety Liabilities with respect to the Facilities or
with respect to any other properties and assets
(whether real, personal, or mixed) in which
Shareholders or the Company (or any predecessor),
has or had an interest, or at any property
geologically or hydrologically adjoining the
Facilities or any such other property or assets.
(e) There are no Hazardous Materials present on or in
the Environment at the Facilities or at any
geologically or hydrologically adjoining property,
including any Hazardous Materials contained in
barrels, above or underground storage tanks,
landfills, land deposits, dumps, equipment (whether
moveable or fixed) or other containers, either
temporary or permanent, and deposited or located in
land, water, sumps, or any other part of the
Facilities or such adjoining property, or
incorporated into any structure therein or thereon.
No Shareholder, the Company, any other Person for
whose conduct they are or may be held responsible,
or any other Person, has permitted or conducted, or
is aware of, any Hazardous Activity conducted with
respect to the Facilities or any other properties or
assets (whether real, personal, or mixed) in which
Shareholders or the Company has or had an interest
except in full compliance with all applicable
Environmental Laws.
(f) There has been no Release or, to the Knowledge of
Shareholders and the Company, Threat of Release, of
any Hazardous Materials at or from the Facilities or
at any other locations where any Hazardous Materials
were generated, manufactured, refined, transferred,
produced, imported, used, or processed from or by
the Facilities, or from or by any other properties
and assets (whether real, personal, or mixed) in
which Shareholders or the Company has or had an
interest, or any geologically or hydrologically
adjoining property, whether by Shareholders, the
Company, or any other Person.
(g) Shareholders have delivered to Purchaser true and
complete copies and results of any reports, studies,
analyses, tests, or monitoring possessed or
initiated by Shareholders or the Company pertaining
to Hazardous Materials or Hazardous Activities in,
on, or under the Facilities, or concerning
compliance by Shareholders, the Company, or any
other Person for whose conduct they are or may be
held responsible, with Environmental Laws.
3.20 Employees
(a) The Company has provided Purchaser a list of
employees and their current pay rates, as well as W-
2 forms for each employee for 1995. Part 3.20 of
the Disclosure Letter contains a complete and
accurate list of the following additional
information for each employee of the Company;
vacation accrued; and service credited for purposes
of vesting and eligibility to participate under any
Company profit-sharing, severance pay, insurance,
medical, welfare, or vacation plan, or any other
employee benefit plan.
(b) No employee or director of the Company is a party
to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality,
noncompetition, or proprietary rights agreement,
between such employee or director and any other
Person ("Proprietary Rights Agreement") that in any
way adversely affects or will affect (i) the
performance of his duties as an employee or director
of the Company, or (ii) the ability of the Company
to conduct its business, including any Proprietary
Rights Agreement with Shareholders or the Company by
any such employee or director. To Shareholders'
Knowledge, no director, officer, or other key
employee of the Company intends to terminate his
employment with the Company.
(c) Part 3.20 of the Disclosure Letter also contains a
complete and accurate list of the following
information for each retired employee or director of
the Company, or their dependents, receiving benefits
or scheduled to receive benefits in the future:
name, pension benefit, pension option election,
retiree medical insurance coverage, retiree life
insurance coverage, and other benefits.
(d) Part 3.20 of the Disclosure Letter contains a
complete and accurate list of each employment
agreement between the Company and any officer or
employee.
3.21 Labor Relations; Compliance
The Company has not been or is a party to any collective
bargaining or other labor Contract. Since December 31, 1991,
there has not been, there is not presently pending or
existing, and there is not Threatened, (a) any strike,
slowdown, picketing, work stoppage, or employee grievance
process, (b) any Proceeding against or affecting the Company
relating to the alleged violation of any Legal Requirement
pertaining to labor relations or employment matters, including
any charge or complaint filed by an employee or union with the
National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable Governmental Body,
organizational activity, or other labor or employment dispute
against or affecting the Company or its premises, or (c) any
application for certification of a collective bargaining
agent. To the Company's and Shareholders' Knowledge no event
has occurred or circumstance exists that could provide the
basis for any work stoppage or other labor dispute. There is
no lockout of any employees by the Company, and no such action
is contemplated by the Company. The Company has complied in
all respects with all Legal Requirements relating to
employment, equal employment opportunity, nondiscrimination,
immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational
safety and health, and plant closing. The Company is not
liable for the payment of any compensation, damages, taxes,
fines, penalties, or other amounts, however designated, for
failure to comply with any of the foregoing Legal
Requirements.
3.22 Intellectual Property
(a) Intellectual Property Assets - The term
"Intellectual Property Assets" includes:
(i) the Company's name, all fictional business
names, trading names, registered and
unregistered trademarks, service marks, and
applications (collectively, "Marks");
(ii) all patents, patent applications, and
inventions and discoveries that may be
patentable (collectively, "Patents");
(iii) all copyrights in both published works and
unpublished works (collectively, "Copyrights");
(iv) all rights in mask works (collectively,
"Rights in Mask Works"); and
(v) all know-how, trade secrets, confidential
information, customer lists, software,
technical information, data, process
technology, plans, drawings, and blue prints
(collectively, "Trade Secrets"); owned, used,
or licensed by the Company as licensee or
licensor.
(b) Agreements - Part 3.22(b) of the Disclosure Letter
contains a complete and accurate list and summary
description, including any royalties paid or
received by the Company, of all Contracts relating
to the Intellectual Property Assets to which the
Company is a party or by which the Company is bound,
except for any license implied by the sale of a
product and perpetual, paid-up licenses for commonly
available software programs with a value of less
than $15,000.00 under which the Company is the
licensee. There are no outstanding and, to
Shareholders' Knowledge, no Threatened disputes or
disagreements with respect to any such agreement.
(c) Know-How Necessary for the Business
The Intellectual Property Assets are all those
necessary for the operation of the Company's
business as it is currently conducted. The Company
is the owner of all right, title, and interest in
and to each of the Intellectual Property Assets,
free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse
claims, and has the right to use without payment to
a third party all of the Intellectual Property
Assets.
(d) Patents
(i) Part 3.22(d) of the Disclosure Letter contains
a complete and accurate list and summary
description of all Patents. The Company is the
owner of all right, title, and interest in and
to each of the Patents, free and clear of all
liens, security interests, charges,
encumbrances, entities, and other adverse
claims.
(ii) All of the issued Patents are currently in
compliance with formal legal requirements
(including payment of filing, examination, and
maintenance fees and proofs of working or use),
are valid and enforceable, and are not subject
to any maintenance fees or taxes or actions
falling due within ninety days after the
Closing Date.
(iii) No Patent has been or is now involved in
any interference, reissue, reexamination, or
opposition proceeding. To Shareholders'
Knowledge, there is no potentially interfering
patent or patent application of any third
party.
(iv) No Patent is infringed or, to
Shareholders' Knowledge, has been challenged or
threatened in any way. None of the products
manufactured and sold, nor any process or know-
how used, by the Company infringes or is
alleged to infringe any patent or other
proprietary right of any other Person.
(v) All products made, used, or sold under the
Patents have been marked with the proper patent
notice.
(e) Trademarks
(i) Part 3.22(e) of Disclosure Letter contains a
complete and accurate list and summary
description of all Marks. The Company is the
owner of all right, title, and interest in and
to each of the Marks, free and clear of all
liens, security interests, charges,
encumbrances, equities, and other adverse
claims.
(ii) All Marks that have been registered with
the United States Patent and Trademark Office
are currently in compliance with all formal
legal requirements (including the timely
postregistration filing of affidavits of use
and incontestability and renewal applications),
are valid and enforceable, and are not subject
to any maintenance fees or taxes or actions
falling due within ninety days after the
Closing Date.
(iii) No Mark has been or is now involved in any
opposition, invalidation, or cancellation and,
to Shareholders' Knowledge, no such action is
Threatened with the respect to any of the
Marks.
(iv) To Shareholders' Knowledge, there is no
potentially interfering trademark or trademark
application of any third party.
(v) No Mark is infringed or, to Shareholders'
Knowledge, has been challenged or threatened in
any way. None of the Marks used by the Company
infringes or is alleged to infringe any trade
name, trademark, or service mark of any third
party.
(vi) All products and materials containing a
Mark bear the proper federal registration
notice where permitted by law.
(f) Copyrights
(i) Part 3.22(f) of the Disclosure Letter contains
a complete and accurate list and summary
description of all Copyrights. The Company is
the owner of all right, title, and interest in
and to each of the Copyrights, free and clear
of all liens, security interests, charges,
encumbrances, equities, and other adverse
claims.
(ii) All the Copyrights have been registered
and are currently in compliance with formal
legal requirements, are valid and enforceable,
and are not subject to any maintenance fees or
taxes or actions falling due within ninety days
after the date of Closing.
(iii) No Copyright is infringed or, to
Shareholders' Knowledge, has been challenged or
threatened in any way. None of the subject
matter of any of the Copyrights infringes or is
alleged to infringe any copyright of any third
party or is a derivative work based on the work
of a third party.
(iv) All works encompassed by the Copyrights
have been marked with the proper copyright
notice.
(g) Trade Secrets
(i) With respect to each Trade Secret, the
documentation relating to such Trade Secret is
current, accurate, and sufficient in detail and
content to identify and explain it and to allow
its full and proper use without reliance on the
knowledge or memory of any individual.
(ii) Shareholders and the Company have taken
all reasonable precautions to protect the
secrecy, confidentiality, and value of the
Trade Secrets.
(iii) The Company has good title and an absolute
(but not necessarily exclusive) right to use
the Trade Secrets. The Trade Secrets are not
part of the public knowledge or literature,
and, to Shareholders' Knowledge, have not been
used, divulged, or appropriated either for the
benefit of any Person (other than the Company)
or to the detriment of the Company. No Trade
Secret is subject to any adverse claim or has
been challenged or threatened in any way.
(iv) No representation or warranty is made that a
court would find any Company Trade Secret to be
protectable under statutory or common law.
3.23 Certain Payments
Since December 31, 1991, neither the Company nor any
director, officer, agent, or employee of the Company, or any
other Person associated with or acting for or on behalf of the
Company, has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or
other payment to any Person, private or public, regardless of
form, whether in money, property, or services (i) to obtain
favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain
special concessions or for special concessions already
obtained, for or in respect of the Company or any Affiliate of
the Company, or (iv) in violation of any Legal Requirement,
(b) established or maintained any fund or asset that has not
been recorded in the books and records of the Company.
3.24 Disclosure
(a) No representation or warranty of the Company or
Shareholders in this Agreement and no statement in
the Disclosure Letter omits to state a material fact
necessary to make the statements herein or therein,
in light of the circumstances in which they were
made, not misleading.
(b) No notice given pursuant to Section 5.5 will contain
any untrue statement or omit to state a material
fact necessary to make the statements therein or in
this Agreement, in light of the circumstances in
which they were made, not misleading.
(c) There is no fact known to the Company or any
Shareholder that has specific application to any
Shareholders or the Company (other than general
economic or industry conditions) and that materially
adversely affects or, as far as the Company or any
Shareholder can reasonably foresee, materially
threatens, the assets, business, prospects,
financial condition, or results of operations of the
Company that has not been set forth in this
Agreement or the Disclosure Letter.
3.25 Relationships With Related Persons
Except for the lease of the Facility at 1525 Kuebel
Street, Harahan, LA between the Company and Master Investment
Properties, LLC, which is owned by the Shareholders, (A) no
Shareholder or any Related Person of Shareholders or of the
Company has, or since January 1, 1995 has had, any interest in
any property (whether real, personal, or mixed and whether
tangible or intangible), used in or pertaining to the
Company's business; (B) no Shareholder or any Related Person
of Shareholders or of the Company is, or since January 1, 1995
has owned (of record or as a beneficial owner) an equity
interest or any other financial or profit interest in, a
Person that has (i) had business dealings or a material
financial interest in any transaction with the Company, or
(ii) engaged in competition with the Company with respect to
any line of the products or services of the Company (a
"Competing Business") in any market presently served by the
Company, and (C) except as set forth in Part 3.25 of the
Disclosure Letter, no Shareholder or any Related Person of
Shareholders or of the Company is a party to any Contract
with, or has any claim or right against, the Company.
3.26 Brokers or Finders
Except for the Contract between the Company and Legacy
Capital Fund, Inc., Shareholders and their agents have
incurred no obligation or liability, contingent or otherwise,
for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
4.1 Organization and Good Standing
Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Illinois.
4.2 Authority; No Conflict
(a) This Agreement constitutes the legal, valid, and
binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, subject to
bankruptcy laws and laws affecting rights of
creditors generally. Upon the execution and delivery
by Purchaser of the Escrow Agreement and the
Employment Agreements (collectively, the
"Purchaser's Closing Documents"), the Purchaser's
Closing Documents will constitute the legal, valid,
and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their
respective terms, subject to bankruptcy laws and
laws affecting rights of creditors generally.
Purchaser has the absolute and unrestricted right,
power, and authority to execute and deliver this
Agreement and the Purchaser's Closing Documents and
to perform its obligations under this Agreement and
the Purchaser's Closing Documents.
(b) Except as set forth in Schedule 4.2, neither the
execution and delivery of this Agreement by
Purchaser nor the consummation or performance of any
of the Contemplated Transactions by Purchaser will
give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated
Transactions pursuant to:
(I) any provision of Purchaser's Organizational
Documents;
(ii) any resolution adopted by the board of
directors or the shareholders of Purchaser;
(iii) any Legal Requirement or Order to which
Purchaser may be subject; or
(iv) any Contract to which Purchaser is a party
or by which Purchaser may be bound.
Except as set forth in Schedule 4.2, Purchaser is not and
will not be required to obtain any Consent from any Person in
connection with the execution and delivery of this Agreement
or the consummation or performance of any of the Contemplated
Transactions.
4.3 Investment Intent
Purchaser is acquiring the Shares for investment for its
own account and not with a view to, or for the sale in
connection with, any distribution within the meaning of
Section 2(11) of the Securities Act. Purchaser acknowledges
that the Shares have not been registered under the Securities
Act or any state securities law and is fully informed about
the applicable restrictions upon the resale of the Shares
under the Securities Act and applicable state securities laws,
and including Rule 144 promulgated under the Securities Act,
and Louisiana Revised Statutes Section 51:709(4). Purchaser
is capable of bearing the financial risks of the investment
and the Shares.
4.4 Certain Proceedings
There is no pending Proceeding that has been commenced
against Purchaser and that challenges, or may have the effect
of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions. To
Purchaser's Knowledge, no such Proceeding has been Threatened.
4.5 Brokers or Finders
Purchaser and its officers and agents have incurred no
obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
4.6 No Approvals
No permit, consent, approval or authorization of, or
declaration to or filing with, any governmental authority is
required in connection with the execution, delivery and
performance by Purchaser of this Agreement or the other
agreements contemplated hereby, or the consummation by
Purchaser of any other transactions contemplated hereby or
thereby, except as has been obtained or except as expressly
contemplated herein or in the schedules or exhibits hereto.
4.7 Securities Registration Laws.
To the best of Purchaser's knowledge, the purchase of the
Shares to be acquired pursuant hereto does not violate any
federal securities laws or applicable state securities laws.
Purchaser acknowledges and agrees that the purchase of the
Shares pursuant to this Agreement on the Closing Date
constitutes an "isolated nonissuer transaction" or an
"isolated transaction" as those terms are used in Section 4(Q)
of the Illinois Securities Law of 1953, as amended, and that
such purchase does not involve the issuer of the Shares or an
underwriter of the Shares as contemplated by Louisiana Revised
Statutes Section 51:709(3)(a).
4.8 Price of Shares.
Purchaser acknowledges that the purchase price of the
Shares has been determined by negotiation between the
Purchaser and the Shareholders.
4.9 Projections.
Purchaser acknowledges that to the extent any projections
of the financial results or business operations of the Company
have been made to Purchaser, that such projections were merely
good faith forecasts of anticipated results based on certain
assumptions and are not guarantees of actual results of the
Company. The actual results of the Company may vary
materially from the assumptions and any projections which may
have been made.
5. COVENANTS OF SHAREHOLDERS PRIOR TO CLOSING DATE
5.1 Access and Investigation
Between the date of this Agreement and the Closing Date,
Shareholders will, and will cause the Company and its
Representatives to, (a) afford Purchaser and its
Representatives and prospective lenders and their
Representatives (collectively, "Purchaser's Advisors") full
and free access to the Company's personnel, properties
(including subsurface testing), contracts, books and records,
and other documents and data, (b) furnish Purchaser and
Purchaser's Advisors with copies of all such contracts, books
and records, and other existing documents and data as
Purchaser may reasonably request, and (c) furnish Purchaser
and Purchaser's Advisors with such additional financial,
operating, and other data and information as Purchaser may
reasonably request.
5.2 Operation of the Business of the Company
Between the date of this Agreement and the Closing Date,
Shareholders will, and will cause the Company to:
(a) conduct the business of the Company only in the
Ordinary Course of Business;
(b) use their Best Efforts to preserve intact the
current business organization of the Company, keep
available the services of the current officers,
employees, and agents of the Company, and maintain
the relations and good will with suppliers,
customers, landlords, creditors, employees, agents,
and others having business relationships with the
Company;
(c) confer with Purchaser concerning operational matters
of a material nature; and
(d) otherwise report periodically to Purchaser
concerning the status of the business, operations,
and finances of the Company.
(e) Qualify to do business as a foreign corporation and
be in good standing under the laws of each state or
other jurisdiction in which such qualification is
required.
5.3 Negative Covenant
Except as otherwise expressly permitted by this
Agreement! between the date of this Agreement and the Closing
Date, Shareholders will not, and will cause the Company not
to, without the prior consent of Purchaser, take any
affirmative action, or fail to take any reasonable action
within their or its control, as a result of which any of the
changes or events listed in Section 3.16 is likely to occur.
5.4 Required Approvals
As promptly as practicable after the date of this
Agreement, Shareholders will, and will cause the Company to,
make all filings required by Legal Requirements to be made by
them in order to consummate the Contemplated Transactions
(including all filings under the HSR Act). Between the date
of this Agreement and the Closing Date, Shareholders will, and
will cause the Company to, (a) cooperate with Purchaser with
respect to all filings that Purchaser elects to make or is
required by Legal Requirements to make in connection with the
Contemplated Transactions, and (b) cooperate with Purchaser in
obtaining all consents identified in Schedule 4.2 (including
taking all actions requested by Purchaser to cause early
termination of any applicable waiting period under the HSR
Act).
5.5 Notification
Between the date of this Agreement and the Closing Date,
each Shareholder will promptly notify Purchaser in writing if
such Shareholder or the Company becomes aware of any fact or
condition that causes or constitutes a Breach of any of
Shareholders' representations and warranties as of the date of
this Agreement, or if such Shareholder or the Company becomes
aware of the occurrence after the date of this Agreement of
any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a Breach
of any such representation or warranty had such representation
or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any such fact or
condition require any change in the Disclosure Letter if the
Disclosure Letter were dated the date of the occurrence or
discovery of any such fact or condition, Shareholders will
promptly deliver to Purchaser a supplement to the Disclosure
Letter specifying such change. During the same period, each
Shareholder will promptly notify Purchaser of the occurrence
of any Breach of any covenant of Shareholders in this Section
5 or of the occurrence of any event that may make the
satisfaction of the conditions in Section 7 impossible or
unlikely.
5.6 Payment of Indebtedness by Related Persons
Except as expressly provided in this Agreement,
Shareholders will cause all indebtedness owed to the Company
by any Shareholder or any Related Person of any Shareholder to
be paid in full prior to Closing.
5.7 No Negotiation
Until such time, if any, as this Agreement is terminated
pursuant to Section 9, Shareholders will not, and will cause
the Company and each of their Representatives not to, directly
or indirectly solicit, initiate, or encourage any inquiries or
proposals from, discuss or negotiate with, provide any non-
public information to, or consider the merits of any
unsolicited inquiries or proposals from, any Person (other
than Purchaser) relating to any transaction involving the sale
of the business or assets (other than in the Ordinary Course
of Business) of the Company, or any of the capital stock of
the Company, or any merger, consolidation, business
combination, or similar transaction involving the Company.
5.8 Best Efforts
Between the date of this Agreement and the Closing Date,
Shareholders and the Company will use their Best Efforts to
cause the conditions in Sections 7 and 8 to be satisfied.
6. COVENANTS OF PURCHASER PRIOR TO CLOSING DATE
6.1 Approvals of Governmental Bodies
As promptly as practicable after the date of this
Agreement, Purchaser will, and will cause each of its Related
Persons to, make all filings required by Legal Requirements to
be made by them to consummate the Contemplated Transactions
(including all filings under the HSR Act). Between the date
of this Agreement and the Closing Date, Purchaser will, and
will cause each Related Person to, (i) cooperate with
Shareholders with respect to all filings that Shareholders are
required by Legal Requirements to make in connection with the
Contemplated Transactions, and (ii) cooperate with
Shareholders in obtaining all consents identified in Part 3.2
of the Disclosure Letter; provided that this Agreement will
not require Purchaser to dispose of or make any change in any
portion of its business or to incur any other burden to obtain
a Governmental Authorization.
6.2 Best Efforts
Except as set forth in the proviso to Section 6.1,
between the date of this Agreement and the Closing Date,
Purchaser will use its Best Efforts to cause the conditions in
Sections 7 and 8 to be satisfied.
7. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
Purchaser's obligation to purchase the Shares and to take
the other actions required to be taken by Purchaser at the
Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may
be waived by Purchaser, in whole or in part):
7.1 Accuracy of Representations
All of the Company's and Shareholders' representations
and warranties in this Agreement (considered collectively),
and each of these representations and warranties (considered
individually), must have been accurate in all respects as of
the date of this Agreement, and must be accurate in all
material respects as of the Closing Date as if made on the
Closing Date.
7.2 Shareholders' Performance
All of the covenants and obligations that Shareholders
are required to perform or to comply with pursuant to this
Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and
complied with in all material respects.
7.3 Consents
Each of the Consents identified in Part 3.2 of the Disclosure
Letter, and each Consent identified in Schedule 4.2, must
have been obtained and must be in full force and effect.
7.4 Additional Documents
Each of the following documents must have been delivered to
Purchaser:
(a) an opinion of Phelps Dunbar, L.L.P., as counsel to
Shareholders, dated the Closing Date, in the form of
Exhibit 7.4(a);
(b) estoppel certificates executed on behalf of each
landlord and other person who is party to a Meterial
Contract whose consent to the Contemplated
Transactions is required, dated as of a date not
more than 30 days prior to the Closing Date, each in
the form of Exhibit 7.4(b); and
(c) such other documents as Purchaser may reasonably
request for the purpose of (i) enabling its counsel
to provide the opinion referred to in Section
8.4(a), (ii) evidencing the accuracy of any of
Shareholders'' representations and warranties, (iii)
evidencing the performance by any Shareholder of, or
the compliance by any Shareholder with, any covenant
or obligation required to be performed or complied
with by such Shareholder, (iv) evidencing the
satisfaction of any condition referred to in this
Section 7, or (v) otherwise facilitating the
consummation or performance of any of the
Contemplated Transactions.
7.5 No Proceedings
Since the date of this Agreement, there must not have
been commenced or Threatened against Purchaser, or against any
Person affiliated with Purchaser, any Proceeding (a) involving
any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions, or (b)
that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated
Transactions.
7.6 No Claim Regarding Stock Ownership or Sale Proceeds
There must not have been made or Threatened by any Person
any claim asserting that such Person (a) is the holder or the
beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any stock of, or any other voting,
equity, or ownership interest in, any stock of, or any other
voting, equity, or ownership interest in, the Company, or (b)
is entitled to all or any portion of the Purchase Price
payable for the Shares.
7.7 No Prohibition
Neither the consummation nor the performance of any of
the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time), materially
contravene, or conflict with, or result in a material
violation of, or cause Purchaser or any Person affiliated with
Purchaser to suffer any material adverse consequence under,
(a) any applicable Legal Requirement or Order, or (b) any
Legal Requirement or Order that has been published,
introduced, or otherwise proposed by or before any
Governmental Body.
7.8 Board Approval
This Agreement and the Contemplated Transactions must
have been approved by the Boards of Directors of the Company,
the Purchaser and Purchaser's parent, as appropriate.
7.9 Due Diligence Completed
Purchaser shall have completed, to its reasonable
satisfaction, its due diligence investigation of the Company.
8. CONDITIONS PRECEDENT TO SHAREHOLDERS' OBLIGATION TO CLOSE
Shareholders' obligation to sell the Shares and to take
the other actions required to be taken by Shareholders at the
Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may
be waived by Shareholders, in whole or in part):
8.1 Accuracy of Representations
All of Purchaser's representations and warranties in this
Agreement (considered collectively), and each of these
representations and warranties (considered individually), must
have been accurate in all material respects as of the date of
this Agreement and must be accurate in all material respects
as of the Closing Date as if made on the Closing Date.
8.2 Purchaser's Performance
(a) All of the covenants and obligations that Purchaser
is required to perform or to comply with pursuant to
this Agreement at or prior to the Closing
(considered collectively), and each of these
covenants and obligations (considered individually),
must have been performed and complied with in all
material respects.
(b) Purchaser must have delivered each of the documents
required to be delivered by Purchaser pursuant to
Section 2.4 and must have made the cash payments
required to be made by Purchaser pursuant to
Sections 2.4(b)(i) and 2.4(b)(ii).
8.3 Consents
Each of the Consents identified in Part 3.2 of the
Disclosure Letter must have been obtained and must be in full
force and effect.
8.4 Additional Documents
Purchaser must have caused the following documents to be
delivered to Shareholders:
(a) an opinion of Otis H. Halleen, as general counsel
for Purchaser,
dated the Closing Date, in the form of Exhibit
8.4(a); and
(b) such other documents as Shareholders may reasonably
request for the purpose of (i) enabling their
counsel to provide the opinion referred to in
Section 7.4(a), (ii) evidencing the accuracy of any
representation or warranty of Purchaser, (iii)
evidencing the performance by Purchaser of, or the
compliance by Purchaser with, any covenant or
obligation required to be performed or complied with
by Purchaser, (iv) evidencing the satisfaction of
any condition referred to in this Section 8, or (v)
otherwise facilitating the consummation of any of
the Contemplated Transactions.
8.5 No Injunction
There must not be in effect any Legal Requirement or any
injunction or other Order that (a) prohibits the sale of the
Shares by Shareholders to Purchaser, and (b) has been adopted
or issued, or has otherwise become effective, since the date
of this Agreement.
8.6 Board Approval
This Agreement and the Contemplated Transactions must
have been approved by the Boards of Directors of the Company,
the Purchaser and Purchaser's parent, as appropriate.
8.7 Amendment of Lease
The Lease Agreement between the Company and Master
Investment Properties must have been amended to provide, among
other things, that the term will be reduced to a 10 year term,
and the base annual rental will be $480,000 for the first 5
years, and $504,000 for the 6th through 10th years, and that
the Company's guarantees of the certain loan facilities made
with Hibernia National Bank, and the cross-default and cross-
collateralization agreements in connection therewith, be
cancelled.
9. TERMINATION
9.1 Termination Events
This Agreement may, by notice given prior to or at the
Closing, be terminated:
(a) by either Purchaser or Shareholders if a material
Breach of any provision of this Agreement has been
committed by the other party and such Breach has not
been waived;
(b) (i) by Purchaser if any of the conditions
in Section 7, or in Section 8.7 has not been
satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes
impossible (other than through the failure of
Purchaser to comply with its obligations under
this Agreement) and Purchaser has not waived
such condition on or before the Closing Date;
or
(ii) by Shareholders, if any of the conditions
in Section 8 has not been satisfied of the
Closing Date or if satisfaction of such a
condition is or becomes impossible (other than
through the failure of Shareholders to comply
with their obligations under this Agreement)
and Shareholders have not waived such condition
on or before the Closing Date;
(c) by mutual consent of Purchaser and Shareholders; or
(d) by either Purchaser or Shareholders if the Closing
has not occurred (other than through the failure of
any party seeking to terminate this Agreement to
comply fully with its obligations under this
Agreement) on or before November 15, 1996, or such
later date as the parties may agree upon.
9.2 Effect of Termination
Each party's right of termination under Section 9.1 is in
addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will
not be an election of remedies. If this Agreement is
terminated pursuant to Section 9.1, all further obligations of
the parties under this Agreement will terminate, except that
the obligations in Sections 11.1 and 11.3 will survive;
provided, however, that if this Agreement is terminated by a
party because of the Breach of the Agreement by the other
party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not
satisfied as a result of the other party's failure to comply
with its obligations under this Agreement, the terminating
party's right to pursue all legal remedies will survive such
termination unimpaired.
9.3 Liquidated Damages
Notwithstanding any other provisions of this Agreement,
if Purchaser fails or refuses to close, or if the Board of
Directors of Purchaser or Purchaser's parent refuses to
approve the transaction, for any reason other than (a) the
Breach of the Agreement by Shareholders, or (b) because one or
more of the conditions to Purchaser's obligations under this
Agreement is not satisfied, or (c) because Purchaser is unable
to procure the financing needed to consummate the Contemplated
Transactions, Purchaser will pay to Shareholders the sum of
$500,000.00 as the sole and agreed damages to Shareholders.
If Purchaser fails or refuses to close because Purchaser
is unable to procure the financing needed to consummate the
Contemplated Transactions, Purchaser will pay to Shareholders
the sum of $250,000.00 as the sole and agreed damages to
Shareholders.
10. INDEMNIFICATION; REMEDIES
10.1 Survival; Right to Indemnification Not Affected By
Knowledge
All representations, warranties, covenants, and
obligations in this Agreement, the Disclosure Letter, the
supplements to the Disclosure Letter, the certificate
delivered pursuant to Section 2.4(a)(v), and any other
certificate or document delivered pursuant to this Agreement
will survive the Closing for a period of one year. The right
to indemnification, payment of Damages or other remedy based
on such representations, warranties, covenants, and
obligations will not be affected by any investigation
conducted at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with,
any such representation, warranty, covenant, or obligation.
Notwithstanding the foregoing, the Company's representations
shall terminate at the Closing and the Shareholders release
the Company from all claims arising out of the Transaction
based on indemnification or contribution.
10.2 Indemnification and Payment of Damages By
Shareholders
Shareholders, jointly and severally, will indemnify and
hold harmless Purchaser, the Company, and their respective
Representatives, Shareholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and
will pay to the Indemnified Persons the amount of, any loss,
liability, claim, damage (including incidental and
consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or
diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), to the extent such Damages
exceed any then currently existing insurance coverage,
arising, directly or indirectly, from or in connection with:
(a) any Breach of any representation or warranty made by
Shareholders in this Agreement (without giving
effect to any supplement to the Disclosure Letter),
the Disclosure Letter, the supplements to the
Disclosure Letter, or any other certificate or
document delivered by Shareholders pursuant to this
Agreement;
(b) any Breach of any representation or warranty made by
Shareholders in this Agreement as if such
representation or warranty were made on and as of
the Closing Date without giving effect to any
supplement to the Disclosure Letter, other than any
such Breach that is disclosed in a supplement to the
Disclosure Letter and is expressly identified in the
certificate delivered pursuant to Section 2.4(a)(v)
as having caused the condition specified in Section
7.1 not to be satisfied;
(c) any Breach by any Shareholder of any covenant or
obligation of such Shareholder in this Agreement;
(d) any product shipped or manufactured by, or any
services provided by, the Company prior to the
Closing Date; or
(e) any claim by any Person for brokerage or finder's
fees or commissions or similar payments based upon
any agreement or understanding alleged to have been
made by any such Person with any Shareholder or the
Company (or any Person acting on their behalf) in
connection with any of the Contemplated
Transactions.
The remedies provided in this Section 10.2 will not be
exclusive of or limit any other remedies that may be available
to Purchaser or the other Indemnified Persons. Notwithstanding
the foregoing, the indemnification obligations of each
Shareholder individually shall not exceed the amounts
specified in Section 10.6.
10.3 Indemnification and Payment of Damages By
Shareholders - Environmental Matters
In addition to the provisions of Section 10.2,
Shareholders, jointly and severally, will indemnify and hold
harmless Purchaser, the Company, and the other Indemnified
Persons for, and will pay to Purchaser, the Company, and the
other Indemnified Persons the amount of, any Damages
(including costs of cleanup, containment, or other
remediation) arising, directly or indirectly, from or in
connection with:
(a) any Environmental, Health, and Safety Liabilities
arising out of or relating to: (i) (A) the
ownership, operation, or condition at any time on or
prior to the Closing Date of the Facilities or any
other properties and assets (whether real, personal,
or mixed and whether tangible or intangible) in
which Shareholders or the Company has or had an
interest, or (B) any Hazardous Materials or other
contaminants that were present on the Facilities or
such other properties and assets at any time on or
prior to the Closing Date; or (ii) (A) any Hazardous
Materials or other contaminants, wherever located,
that were, or were allegedly, generated,
transported, stored, treated, Released, or otherwise
handled by Shareholders or the Company or by any
other Person for whose conduct they are or may be
held responsible at any time on or prior to the
Closing Date, or (B) any Hazardous Activities that
were, or were allegedly, conducted by Shareholders
or the Company or by any other Person for whose
conduct they are or may be held responsible; or
(b) any bodily injury (including illness, disability,
and death, and regardless of when any such bodily
injury occurred, was incurred, or manifested
itself), personal injury, property damage (including
trespass, nuisance, wrongful eviction, and
deprivation of the use of real property), or other
damage of or to any Person, including any employee
or former employee of Shareholders or the Company or
any other Person for whose conduct they are or may
be held responsible, in any way arising from or
allegedly arising from any Hazardous Activity
conducted or allegedly conducted with respect to the
Facilities or the operation of the Company prior to
the Closing Date, or from Hazardous Material that
was (i) present or suspected to be present on or
before the Closing Date on or at the Facilities (or
present or suspected to be present on any other
property, if such Hazardous Material emanated or
allegedly emanated from any of the Facilities and
was present or suspected to be present on any of the
Facilities on or prior to the Closing Date) or (ii)
Released or allegedly Released by Shareholders or
the Company or any other Person for whose conduct
they are or may be held responsible, at any time on
or prior to the Closing Date.
Purchaser will be entitled to control any Cleanup, any
related Proceeding, and, except as provided in the following
sentence, any other Proceeding with respect to which indemnity
may be sought under this Section 10.3. The procedure described
in Section 10.9 will apply to any claim solely for monetary
damages relating to a matter covered by this Section 10.3.
10.4 Indemnification and Payment of Damages By Purchaser
Purchaser will indemnify and hold harmless Shareholders,
and will pay to Shareholders the amount of any Damages
arising, directly or indirectly, from or in connection with
(a) any Breach of any representation or warranty made by
Purchaser in this Agreement or in any certificate delivered by
Purchaser pursuant to this Agreement, (b) any Breach by
Purchaser of any covenant or obligation of Purchaser in this
Agreement, or (c) any claim by any Person for brokerage or
finder's fees or commissions or similar payments based upon
any agreement or understanding alleged to have been made by
such Person with Purchaser (or any Person acting on its
behalf) in connection with any of the Contemplated
Transactions.
10.5 Time Limitations
If the Closing occurs, Shareholders will have no
liability (for indemnification or otherwise) with respect to
any representation or warranty, or covenant or obligation to
be performed and complied with prior to the Closing Date,
other than those in Sections 3.3 and 3.11, unless on or before
the first anniversary of the Closing Purchaser notifies
Shareholders of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by
Purchaser; a claim with respect to Section 3.3 or 3.11, may be
made at any time. If the Closing occurs, Purchaser will have
no liability (for indemnification or otherwise) with respect
to any representation or warranty, or covenant or obligation
to be performed and complied with prior to the Closing Date,
unless on or before the first anniversary of the Closing
Shareholders notify Purchaser of a claim specifying the
factual basis of that claim in reasonable detail to the extent
then known by Shareholders.
10.6 Limitations On Amount - Shareholders
Shareholders will have no liability (for indemnification
or otherwise) with respect to the matters described in Section
10.2 or 10.3 until the total of all Damages with respect to
such matters exceeds 2% of the Purchase Price (as adjusted by
the Adjustment Amount), and then only for the amount by which
such Damages exceed said 2%, but not to exceed, for each
Shareholder, the amount of consideration received by such
Shareholder, less a proportionate share of the 2% threshold..
However, this Section 10.6 will not apply to any Breach of any
of Shareholders' representations and warranties of which any
Shareholder had actual knowledge at the time such
representation and warranty is made or any intentional Breach
by any Shareholder of any covenant or obligation, and
Shareholders will be individually and not jointly and
severally liable for all Damages with respect to such
Breaches.
10.7 Limitations on Amount - Purchaser
Purchaser will have no liability (for indemnification or
otherwise) with respect to the matters described in clause (a)
or (b) of Section 10.4 until the total of all Damages with
respect to such matters exceeds $100,000.00, and then only for
the amount by which such Damages exceed $100,000.00.
However, this Section 10.7 will not apply to any Breach of any
of Purchaser's representations and warranties of which
Purchaser had actual knowledge at the time such representation
and warranty is made or any intentional Breach by Purchaser of
any covenant or obligation, and Purchaser will be liable for
all Damages with respect to such Breaches.
10.8 Procedure for Indemnification - Third Party Claims
(a) Promptly after receipt by an indemnified party under
Section 10.2, 10.4, or (to the extent provided in
the last sentence of Section 10.3) Section 10.3 of
notice of the commencement of any Proceeding against
it, such indemnified party will, if a claim is to be
made against an indemnifying party under such
Section, give notice to the indemnifying party of
the commencement of such claim, but the failure to
notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have
to any indemnified party, except to the extent that
the indemnifying party demonstrates that the defense
of such action is prejudiced by the indemnifying
party's failure to give such notice.
(b) If any Proceeding referred to in Section lO.8(a) is
brought against an indemnified party and it gives
notice to the indemnifying party of the commencement
of such Proceeding, the indemnifying party will,
unless the claim involves Taxes, be entitled to
participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is
also a party to such Proceeding and the indemnified
party determines in good faith that joint
representation would be inappropriate, or (ii) the
indemnifying party fails to provide reasonable
assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide
indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after
notice from the indemnifying party to the
indemnified party of its election to assume the
defense of such Proceeding, the indemnifying party
will not, as long as it diligently conducts such
defense, be liable to the indemnified party under
this Section 10 for any fees of other counsel or any
other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by
the indemnified party in connection with the defense
of such Proceeding, other than reasonable costs of
investigation. If the indemnifying party assumes the
defense of a Proceeding, (i) it will be conclusively
established for purposes of this Agreement that the
claims made in that Proceeding are within the scope
of and subject to indemnification; (ii) no
compromise or settlement of such claims may be
effected by the indemnifying party without the
indemnified party's consent unless (A) there is no
finding or admission of any violation of Legal
Requirements or any violation of the rights of any
Person and no effect on any other claims that may be
made against the indemnified party, and (B) the sole
relief provided is monetary damages that are paid in
full by the indemnifying party; and (iii) the
indemnified party will have no liability with
respect to any compromise or settlement of such
claims effected without its consent. If notice is
given to an indemnifying party of the commencement
of any Proceeding and the indemnifying party does
not, within ten days after the indemnified party's
notice is given, give notice to the indemnified
party of its election to assume the defense of such
Proceeding, the indemnifying party will be bound by
any determination made in such Proceeding or any
compromise or settlement effected by the indemnified
party.
(c) Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a
reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as
a result of monetary damages for which it would be
entitled to indemnification under this Agreement,
the indemnified party may, by notice to the
indemnifying party, assume the exclusive right to
defend, compromise, or settle such Proceeding, but
the indemnifying party will not be bound by any
determination of a Proceeding so defended or any
compromise or settlement effected without its
consent (which may not be unreasonably withheld).
(d) Shareholders hereby consent to the non-exclusive
jurisdiction of any court in which a Proceeding is
brought against any Indemnified Person for purposes
of any claim that an Indemnified Person may have
under this Agreement with respect to such Proceeding
or the matters alleged therein, and agree that
process may be served on Shareholders with respect
to such a claim anywhere in the world.
10.10 Procedure for Indemnification - Other Claims
A claim for indemnification for any matter not involving
a third-party claim may be asserted by notice to the party
from whom indemnification is sought.
11. GENERAL PROVISIONS
11. 1 Expenses
Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and
performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents,
representatives, counsel, and accountants. Purchaser will pay
amounts payable to Legacy Capital in connection with this
Agreement and the Contemplated Transactions up to but not in
excess of $900,000.00. Purchaser will pay the HSR Act filing
fee. Shareholders will cause the Company not to incur any out-
of-pocket expenses in connection with this Agreement. In the
event of termination of this Agreement, the obligation of each
party to pay its own expenses will be subject to any rights of
such party arising from a breach of this Agreement by another
party.
11.2 Public Announcements
Any public announcement or similar publicity with respect
to this Agreement or the Contemplated Transactions will be
issued, if at all, at such time and in such manner as
Purchaser determines. Unless consented to by Purchaser in
advance or required by Legal Requirements, prior to the
Closing Shareholders shall, and shall cause the Company to,
keep this Agreement strictly confidential and may not make any
disclosure of this Agreement to any Person. Shareholders and
Purchaser will consult with each other concerning the means by
which the Company's employees, customers, and suppliers and
others having dealings with the Company will be informed of
the Contemplated Transactions, and Purchaser will have the
right to be present for any such communication.
1 1.3 Confidentiality
Between the date of this Agreement and the Closing Date,
Purchaser and Shareholders will maintain in confidence, and
will cause the directors, officers, employees, agents, and
advisors of Purchaser and the Company to maintain in
confidence, and not use to the detriment of another party or
the Company, any written, oral, or other information obtained
in confidence from another party in connection with this
Agreement or the Contemplated Transactions, unless (a) such
information is already known to such party or to others not
bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use
of such information is necessary or appropriate in making any
filing or obtaining any consent or approval required for the
consummation of the Contemplated Transactions, or (c) the
furnishing or use of such information is required by, or
necessary or appropriate in connection with, legal
proceedings.
If the Contemplated Transactions are not consummated,
each party will return or destroy as much of such written
information as the other party may reasonably request. Whether
or not the Closing takes place, Shareholders and the Company
waive any cause of action, right, or claim arising out of the
access of Purchaser or its representatives to any trade
secrets or other confidential information of the Company
except for the intentional competitive misuse by Purchaser of
such trade secrets or confidential information.
11.4 Notices
All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written
confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case
to the appropriate addresses and telecopier numbers set forth
below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Shareholders: c/o Kevin Lagasse
1525 Kuebel Street
Harahan, LA
Facsimile No.: (504) 736-5690
with a copy to: Charles Porter
Phelps Dunbar
200 S. Lamar Street, Suite 500
Jackson, MS 39225
Facsimile No.: (601) 360-9777
Purchaser: United Stationers Supply Co.
2200 East Golf Road
Des Plaines, IL 60016
Attention: Thomas W. Sturgess, Chairman
Facsimile No.:
with a copy to: Otis H. Halleen, General Counsel
2200 East Golf Road
Des Plaines, IL 60016-1267
Facsimile No.: (847) 699-3193
11.5 Alternative Dispute Resolution
1. It is the intention of the parties to make a good
faith effort to resolve, without resort to
litigation, any dispute, controversy or claim
arising out of or relating to this Agreement
("Dispute").
2. Shareholders' and Purchaser's designated
representatives, which shall, in the case of the
Purchaser, be a senior executive, with authority to
resolve the Dispute shall attempt to resolve all
Disputes by negotiation.
Within 20 days of referral of the Dispute to such
representatives, each party's representative shall
prepare and submit to the other party a brief
summary of the Dispute and a statement of the
party's position. Within 20 days of receiving a
party's statement, the receiving party shall submit
a response. Upon receiving the statements and
responses, or upon the expiration of the applicable
time periods, the designated representatives shall
promptly begin discussions in an effort to agree
upon a resolution of the Dispute.
If the designated representatives do not agree upon
a resolution of the Dispute within 60 days of the
referral to them, either party may elect to initiate
mediation of the Dispute in accordance with the
Center for Public Resources Model Procedure for
Mediation of Business Disputes ("CPR Mediation").
If the Dispute has not been resolved pursuant to CPR
Mediation within 60 days of the initiation of such
proceedings, or if the other party will not
participate in such proceedings, the Dispute shall
be resolved by arbitration in a location selected
by the arbitrator in accordance with the Center for
Public Resources Rules for Non-Administered
Arbitration of Business Disputes ("CPR Arbitration")
by a sole arbitrator who shall be selected by both
parties and whose fees and costs shall be paid by
the losing party to the arbitration. The
arbitration shall be governed by the U.S.
Arbitration Act, 9 U.S.C. Sections 1-16, and
judgment on the award, if any, rendered by the
arbitrator may be entered by any court having
jurisdiction thereof.
The procedures specified in this Section are the
sole and exclusive procedures for the resolution of
Disputes; provided, however, that (1) any time
limitation set forth herein may be extended by
mutual written agreement of the parties; (2) any
party may seek a preliminary injunction or other
interim relief if in its judgment such relief is
necessary to prevent irreparable damage, and despite
such action, the parties will continue to
participate in good faith in the procedures outlined
herein; and (3) either party may seek preliminary
and permanent injunctive relief or other interim or
permanent relief if the Dispute involves a
threatened or actual breach of the Confidentiality
Agreement, and despite such action the parties will
continue to participate in good faith in the
procedures outlined herein.
11.6 Further Assurances
The parties agree (a) to furnish upon request to each
other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts
and things, all as the other party may reasonably request for
the purpose of carrying out the intent of this Agreement and
the documents referred to in this Agreement.
11.7 Waiver
The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor
any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power,
or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of
any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out
of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part,
by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand
on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in
this Agreement.
11.8 Entire Agreement and Modification
This Agreement supersedes all prior agreements between
the parties with respect to its subject matter (including the
Letter of Intent between Purchaser and Shareholders dated
September 10, 1996) and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive
statement of the terms of the agreement between the parties
with respect to its subject matter. This Agreement may not be
amended except by a written agreement executed by the party to
be charged with the amendment.
11.9 Waiver of Restrictions
The Company and Shareholders waive any rights they may
have or be entitled to under any restrictions imposed on their
rights to transfer and convey the Shares pursuant to this
Agreement.
11.10 Assignments, Successors, and No Third-Party Rights
No party may assign any of its rights under this
Agreement without the prior consent of the other parties,
which will not be unreasonably withheld, except that Purchaser
may assign any of its rights under this Agreement to any
subsidiary of Purchaser. Subject to the preceding sentence,
this Agreement will apply to, be binding in all respects upon,
and inure to the benefit of the successors and permitted
assigns of the parties. Nothing expressed or referred to in
this Agreement will be construed to give any Person other than
the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive
benefit of the parties to this Agreement and their successors
and permitted assigns.
11.11 Severability
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the
other provisions of this Agreement will remain in full force
and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.
11.12 Section Headings, Construction
The headings of Sections in this Agreement are provided
for convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require.
Unless otherwise expressly provided, the word "including" does
not limit the preceding words or terms.
11.13 Time of Essence
With regard to all dates and time periods set forth or
referred to in this Agreement, time is of the essence.
11.14 Governing Law
This Agreement will be governed by the laws of the State
of Illinois without regard to conflicts of laws principles.
11.15 Counterparts
This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together,
will be deemed to constitute one and the same agreement.
11.16 Joinder of Spouses
Each of the Shareholders' spouses joins in this Agreement
for the purpose of consenting to its execution and
implementation in accordance with any community property or
other rights such spouse may have in the Shares or the
proceeds of the sale thereof, but not otherwise.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.
Purchaser: The Company:
United Stationers Supply Co. Lagasse Bros.,Inc.
By: /s/ Otis Halleen By: /s/ Kevin C. Lagasse
Otis H. Halleen Kevin C. Lagasse
Vice President, Secretary President
and General Counsel
SPOUSES: Shareholders:
/s/Cynthia Lagasse
Cynthia Lagasse
/s/Charla Lagasse /s/Rickey Lagasse
Charla Lagasse Rickey Lagasse
/s/Alphonse J. Abadie /s/Linette Lagasse Abadie
Alphonse J. Abadie Linette Lagasse Abadie
/s/Angelia Cox Lagasse /s/ Clinton G. Lagasse
Angelia Cox Lagasse Clinton G. Lagasse
/s/ Connie Deslatte Lagasse /s/Kevin G. Lagasse
Connie Deslatte Lagasse Kevin G. Lagasse
/s/Laurie Mollere Lagasse /s/David C. Lagasse
Laurie Mollere Lagasse David C. Lagasse
/s/ Raymond Lagasse
Raymond Lagasse
EXHIBIT 2.4(a)(ii)
RELEASE
This Release is being executed and delivered in
accordance with Section 2.4(a)(ii) of the Stock Purchase
Agreement dated October 1,1996 (the "Agreement") between
United Stationers Supply Co., an Illinois corporation
("Purchaser"), and Kevin C. Lagasse, Cynthia Lagasse, David C.
Lagasse, Linette Lagasse Abadie, Clinton G. Lagasse, Raymond
J. Lagasse and Rickey Lagasse, (the "Shareholders") being all
of the shareholders of Lagasse Bros., Inc. (the "Company").
Capitalized terms used in this Release without definition have
the respective meanings given to them in the Agreement.
Each Shareholder acknowledges that execution and delivery
of this Release is a condition to Purchaser's obligation to
purchase the outstanding capital stock of the Company pursuant
to the Agreement and that Purchaser is relying on this Release
in consummating such purchase.
Each Shareholder, for good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged and
intending to be legally bound, in order to induce Purchaser to
purchase the outstanding capital stock of the Company pursuant
to the Agreement, hereby agrees as follows:
Each Shareholder, on behalf of himself or herself and
each of his or her Related Persons, hereby releases and
forever discharges the Purchaser and the Company, and each of
their respective individual, joint or mutual, past, present
and future Representatives, affiliates, Stockholders,
controlling persons, parents, subsidiaries, successors and
assigns (individually, a "Releasee" and collectively,
"Releasees") from any and all claims, demands, Proceedings,
causes of action, Orders, obligations, contracts, agreements,
debts and liabilities whatsoever, whether known or unknown,
suspected or unsuspected, both at law and in equity, which
each of the Shareholders or any of their respective Related
Persons now has, have ever had or may hereafter have against
the respective Releasees arising contemporaneously with or
prior to the Closing Date or on account of or arising out of
any matter, cause or event occurring contemporaneously with or
prior to the Closing Date, including, but not limited to, any
rights to indemnification or reimbursement from the Company,
whether pursuant to its Organizational Documents, contract or
otherwise and whether or not relating to claims pending on, or
asserted after, the Closing Date; provided, however, that
nothing contained herein shall operate to release any
obligations of Purchaser arising under the Agreement.
Each Shareholder hereby irrevocably covenants to refrain
from, directly or indirectly, asserting any claim or demand,
or commencing, instituting or causing to be commenced, any
proceeding of any kind against any Releasee, based upon any
matter purported to be released hereby.
Without in any way limiting any of the rights and
remedies otherwise available to any Releasee, each
Shareholder, jointly and severally, shall indemnify and hold
harmless each Releasee from and against all loss, liability,
claim, damage (including incidental and consequential damages)
or expense (including costs of investigation and defense and
reasonable attorney's fees) whether or not involving third
party claims, arising directly or indirectly from or in
connection with (i) the assertion by or on behalf of the
Shareholders or any of their Related Persons of any claim or
other matter purported to be released pursuant to this Release
and (ii) the assertion by any third party of any claim or
demand against any Releasee which claim or demand arises
directly or indirectly from, or in connection with, any
assertion by or on behalf of the Shareholders or any of their
Related Persons against such third party of any claims or
other matters purported to be released pursuant to this
Release.
If any provision of this Release is held invalid or
unenforceable by any court of competent jurisdiction, the
other provisions of this Release will remain in full force and
effect. Any provision of this Release held invalid or
unenforceable only in part or degree will remain in full force
and effect to the extent not held invalid or unenforceable.
This Release may not be changed except in a writing
signed by the person(s) against whose interest such change
shall operate. This Release shall be governed by and construed
under the laws of the State of Illinois without regard to
principles of conflicts of law. All words used in this
Release will be construed to be of such gender or number as
the circumstances require.
IN WITNESS WHEREOF, each of the undersigned have executed
and delivered this Release as of this day of
, 1996.
/s/ Kevin C. Lagasse /s/ Cynthia Lagasse
Kevin C. Lagasse Cynthia Lagasse
/s/ David C. Lagasse /s/ Linette Lagasse Abadie
David C. Lagasse Linette Lagasse Abadie
/s/ Clinton G. Lagasse /s/ Raymond J. Lagasse
Clinton G. Lagasse Raymond J. Lagasse
/s/ Rickey Lagasse
Rickey Lagasse
EXHIBIT 2.4(a)(iii)
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of
, 1996 by and between Lagasse Bros., Inc., a Louisiana
corporation (the "Company") and Kevin C. Lagasse [David C.
Lagasse] ("Executive").
RECITALS
Concurrently with the execution and delivery of this
Agreement, United Stationers Supply Co., an Illinois
corporation (the "Purchaser"), is purchasing from the
Executive and others (the "Shareholders"), all of the issued
and outstanding shares of stock of the Employer, pursuant to a
Stock Purchase Agreement dated October 1, 1996 between the
Executive, the Company, and the Shareholders, and the
Purchaser (the "Stock Purchase Agreement"). The Purchaser and
the Company desire the Executive's continued employment with
the Company, and the Executive wishes to accept such continued
employment, upon the terms and conditions set forth in this
Agreement.
AGREEMENT
In consideration of the mutual promises and agreements
contained in this Agreement, the Company hereby employs
Executive, and Executive accepts employment with the Company
on the terms and conditions contained in this Agreement.
1. Term of Employment. The term of employment
shall be for two years commencing as of the date of this
Agreement and shall continue until __________________, 1998.
2. Position and Duties. During the term of
employment, Executive shall serve as President [Senior Vice
President] of the Company, and, in accordance with the
authority and direction of the board of directors of the
Company (the "Board") shall render such administrative and
other services to the Company as may be required of such
position or as the Board may from time to time direct.
Executive shall be available at all reasonable times for
consultation with the Board on matters relating to the
Company's, or its affiliates' business.
Executive shall devote his best efforts and his full and
exclusive business time and attention (except for reasonable
periods of vacation, illness or other incapacity) to the
business and affairs of the Company and its affiliates.
3. Compensation. During the term of employment,
Executive shall be compensated as follows:
3.1. Base Salary. Executive shall receive a
base salary of no less than $ 200,000 [$185,000] per
year, payable in accordance with the Company's normal
payment schedule for management employees. The base
salary shall be reviewed by the Board annually and may,
in the Board's sole discretion, be increased when deemed
appropriate.
3.2. Bonus. Executive shall be eligible to
participate in any bonus plans approved by the Board and
made generally available to senior management employees
of the Company, and shall be entitled to such bonus
amounts as shall be determined in accordance with such
plans. Specifically, Executive shall be entitled to
participate in an incentive bonus plan during the next
two years which shall entitle him to a maximum annual
bonus of $100,000 based on performance criteria
determined by the Board and agreed to by Executive.
3.3. Benefits. Executive shall be included, to the
extent eligible, in all plans, programs and policies
providing general benefits for the Company's employees or
its senior management employees (as approved by the Board
and in effect from time to time). This paragraph shall
not be construed to require the Company to establish or
maintain any policy, plan or program.
4. Confidential Information.
4.1. Executive acknowledges the Company's exclusive
ownership of all information useful in the Company's business
(including its dealings with suppliers, customers and other
third parties, whether or not a true "trade secret"), which at
the time or times concerned is not generally known to persons
engaged in businesses similar to those conducted by the
Company, and which has been or is from time to time disclosed
to, discovered by, or otherwise known by Executive as a
consequence of his employment by the Company (including
information conceived, discovered or developed by Executive
during his employment with the Company) (collectively,
"Confidential Information"). Confidential Information
includes, but is not limited to the following especially
sensitive types of information:
(i) The identity, purchase and payment patterns
of, and special relations with, the
Company's customers;
(ii) The identity, net prices and credit terms of,
and special relations with, the Company's
suppliers;
(iii) The Company's inventory selection and
management techniques;
(iv) The Company's product development and market
ing plans; and
(v) The Company's finances, except to the extent
publicly disclosed.
4.2. The term "Proprietary Materials" shall mean all
business records, documents, drawings, writings, software,
programs and other tangible things which were or are created
or received by or for the Company in furtherance of its
business, including, by or but not limited to, those which
contain Confidential Information. For example, Proprietary
Materials include, but are not limited to, the following
especially sensitive types of materials: applications
software, the data bases of Confidential Information
maintained in connection with such software, and printouts
generated from such data bases; market studies and strategic
plans; customer, supplier and employee lists; contracts and
correspondence with customers and suppliers; documents
evidencing transactions with customers and supplier; sales
calls reports, appointment books, calendars, expense state
ments and the like, reflecting conversations with any company,
customer or supplier; architectural plans; and purchasing,
sales and policy manuals. Proprietary Materials also include,
but are not limited to, any such things which are created by
Executive or with Executive's assistance and all notes,
memoranda and the like prepared using the Proprietary
Materials and/or Confidential Information.
4.3. While some of the information contained in
Proprietary Materials may have been known to Executive prior
to employment with the Company, or may now or in the future be
in the public domain, Executive acknowledges that the compi
lation of that information contained in the Proprietary
Materials has or will cost the Company a great effort and
expense, and affords persons to whom Proprietary Materials are
disclosed, including Executive, a competitive advantage over
persons who do not know the information or have the
compilation of the Proprietary Materials. Executive further
acknowledges that Confidential Information and Proprietary
Materials include commercially valuable trade secrets and
automatically become the Company's exclusive property when
they are conceived, created or received. Executive shall
report to the Company fully and promptly, orally (or, at the
Company's request, in writing) all discoveries, inventions and
improvements, whether or not patentable, and all other ideas,
developments, processes, techniques, designs and other
information which may be of benefit to the Company, which
Executive conceives, makes or develops during his employment
(whether or not during working hours or with use or assistance
of Company facilities, materials or personnel, and which
either (i) relate to or arise out of any part of the Company's
business in which Executive participates, or (ii) incorporate
or make use of Confidential Information or Proprietary
Materials) (all items referred to in this Section 4.3 being
sometimes collectively referred to herein as the "Intellectual
Property"). All Intellectual property shall be deemed
Confidential Information of the Company, and any writing or
other tangible things describing, referring to, or containing
Intellectual Property shall be deemed the Company's
Proprietary Materials. At the request of the Company, during
or after the term of employment, Executive (or after
Executive's death, Executive's personal representative) shall,
at the expense of the Company, make, execute and deliver all
papers, assignments, conveyances, installments or other
documents, and perform or cause to be performed such other
lawful acts, and give such testimony, as the Company deems
necessary or desirable to protect the Company's ownership
rights and Intellectual Property.
4.4. Confidentiality Duties. Executive shall, except
as may be required by law, during the term of employment, and
thereafter for the longest time permitted by applicable law:
4.4.1. Comply with all of the
Company's instructions (whether oral or written) for
preserving the confidentiality of Confidential
Information and Proprietary Materials.
4.4.2. Use Confidential Information
and Proprietary Materials only at places designated by
the Company, in furtherance of the Company's business,
and pursuant to the Company's directions.
4.4.3. Exercise appropriate care to
advise other employees of the Company (and, as
appropriate, subcontractors) of the sensitive nature of
Confidential Information and Proprietary materials prior
to their disclosure, and to disclose the same only on a
need-to-know basis.
4.4.4. Not copy all or any part of
Proprietary Materials, except as the Company directs.
4.4.5. Not sell, give, loan or
otherwise transfer any copy of all or any part of
Proprietary Materials to any person who is not an
employee of the Company, except as the Company directs.
4.4.6. Not publish, lecture on or
otherwise disclose to any person who is not an employee
of the Company, except as the Company directs, all or any
part of Confidential Information or Proprietary
Materials.
4.4.7. Not use all or any part of
any Confidential Information or Proprietary Materials for
the benefit of any third party without the Company's
written consent.
Upon the termination of Executive's employment for
whatever reason, Executive (or in the event of death,
Executive's personal representative) shall promptly surrender
to the Company the original and all copies of Proprietary
Materials (including all notes, memoranda and the like
concerning or derived therefrom), whether prepared by
Executive or others, which are then in Executive's possession
or control. Records of payments made by the Company to or for
the benefit of Executive, Executive's copy of this Agreement
and other such things, lawfully possessed by Executive which
relate solely to taxes payable by Executive, employee benefits
due to Executive or the terms of Executive's employment with
the Company, shall not be deemed Proprietary Materials for
purposes of this Section 4.
5. Non-competition.
5.1. During Executive's employment, and during the two
year period following his employment), Executive shall not, in
any way, directly or indirectly, manage, operate, control (or
participate in any of the foregoing), accept employment or a
consulting position with or otherwise advise or assist or be
connected with or directly or indirectly own or have any other
interest in or right with respect to (other than through
ownership of not more than 1% of the outstanding shares of a
corporation's stock which is listed on a national securities
exchange) any enterprise (other than for the Company or for
the benefit of the Company) which is a wholesaler of
janitorial or sanitation products having annual sales in
excess of $1,000,000 within any parish in the State of
Louisiana in which the Company has any facilities or
customers, and within any county in any other state where the
Company has a facility or customers.
5.2. Executive recognizes that the foregoing limitations
are reasonable and properly required for the adequate
protection of the business of the Company. If any such
limitations are deemed to be unreasonable by a court having
jurisdiction of the matter and parties, Executive hereby
agrees and submits to the reduction of any such limitations to
such territory or time as to such court shall appear
reasonable.
5.3. Executive agrees that the remedy at law for any
breach of the provisions of Section 4 or this Section 5 shall
be inadequate and that the Company shall be entitled to
injunctive relief in addition to any other remedies it may
have.
6. Termination and Severance.
6.1. Resignation. If Executive resigns, he shall
be entitled to receive only the unpaid portion of his base
salary and accrued vacation attributable to and including the
date of resignation, and reimbursement for reasonable
reimbursable expenses incurred on behalf of the Company prior
to the date of termination.
6.2. By Executive For Good Reason. Executive may
elect to terminate his employment by written notice to the
Company within 60 days after the occurrence of any of the
following events without Executive's consent, any of which
shall be deemed "Good Reason":
(a) the reduction of Executive's base salary;
(b) the exclusion of Executive from, or diminution
in Executive's participation in, any bonus, profit
sharing and other similar incentive compensation or
deferred compensation plans made available to employees
of the Company or to officers or management personnel of
the Company at the level of President [Senior Vice
President] or lower, other than exclusions, changes or
diminutions applicable to all employees or such
management personnel or officers; or
(c) any material reduction in Executive's title or
duties which has the effect of materially reducing
Executive's status within the Company; provided, however,
that any change in the office or officer to whom
Executive reports, or in Executive's duties or title
which does not diminish Executive's status within the
Company, shall not be deemed "Good Reason"; or
(d) any relocation of the Company's headquarters
outside of the New Orleans metropolitan area; or
(e) the material breach by the Company of any of
its covenants or obligations under this Agreement.
If the employment is terminated by Executive for Good
Reason, Executive shall be entitled to receive:
6.2.1. the unpaid portion of his base salary
for the remainder of his term of employment (but not for
more than a 12 month period), payable on the Company's
regular pay schedule; and
6.2.2. reimbursement for reasonable
reimbursable expenses incurred on behalf of the Company
prior to the termination; and
6.2.3. a severance amount equal to his base
salary, plus his bonuses earned from the Company for the
calendar year preceding the year in which notice is given
by Executive to the Company, payable in equal
installments on the Company's regular pay schedule,
commencing within 30 days after receipt by the Company of
written notice from Executive and continuing for 12
months.
6.3. By Company For Cause. The Company may terminate
the employment at any time for Cause (as hereinafter defined).
If Executive is terminated by the Company for Cause, Executive
shall be entitled to receive only the unpaid portion of his
base salary and accrued vacation attributable to all periods
prior to and including the date of his termination, and
reimbursement for reasonable reimbursable expenses incurred on
behalf of the Company prior to the date of his termination.
"Cause" means Executive's (a) conviction of , or plea of
nolo contendere to a felony; (b) theft or embezzlement, or
attempted theft or embezzlement, of money or property or
assets of the Company or any of its affiliates; (c) use of
illegal drugs; (d) material breach of this Agreement; (e)
commission of any act or acts of moral turpitude in violation
of Company policy; (f) gross negligence or willful misconduct
in the performance of his duties; or (g) breach of any
fiduciary duty owed to the Company, including, without
limitation, engaging in directly competitive acts while
employed by the Company.
6.4. By the Company. The Company may terminate
Executive's employment on written notice to Executive at any
time. If Executive's employment is terminated by the Company,
other than for Cause, Executive shall be entitled to receive:
6.4.1. the unpaid portion of his base salary
for the remaining portion of the term of employment (but
not for more than 12 months), payable on the Company's
regular pay schedule; and
6.4.2. accrued vacation pay and
reimbursement for reasonable reimbursable expenses
incurred on behalf of the Company prior to the date of
termination; and
6.4.3. severance pay equal to one year's
base salary.
6.5. By Death or Disability. If Executive's employment
is terminated due to his death or permanent disability,
Executive shall be entitled to severance pay in accordance
with the provisions of 6.4.2 and 6.4.3 above.
7. Miscellaneous.
7.1. All notices hereunder shall be given in
writing and sent to the party for whom such is intended
by hand delivery or United States certified or registered
mail, return receipt requested, postage prepaid, or
overnight courier service, addressed to the party for
whom intended at the following respective addresses:
If to the Company: c/o United Stationers Supply Co.
2200 East Golf Road
Des Plaines, IL 60016-1267
Attn: President
If to Executive:
or to such other persons and/or at such other addresses
as may be designated by written notice served in
accordance with the provisions hereof. Such notices
shall be deemed to have been served, if hand delivered,
on the day delivered, and if mailed, on the third day
following the date deposited in the mail. Urgent notices
shall be given by Telex or cable to the same addresses
and confirmed by mail as provided above. All notices
sent by Telex or cable shall be deemed to have been
served upon receipt of the Telex or cable, but only if in
fact confirmed by mail promptly after dispatch of the
Telex or cable.
7.2. This Agreement and all rights and benefits
hereunder are personal to Executive and neither this
Agreement nor any right or interest of Executive herein,
or arising hereunder, shall be voluntarily or
involuntarily sold, transferred or assigned by Executive.
Any attempt by Executive to assign, execute, attach,
transfer, pledge, hypothecate or otherwise dispose of any
such benefits or amounts or any rights or interests
contrary to the foregoing provisions, or the levy or
attachment or similar process thereupon, shall be null
and void and of no effect and shall relieve the Company
of all liabilities hereunder. This Agreement and all of
the Company's right and obligations hereunder may be
assigned and/or delegated, as the case may be, without
Executive's consent, to any entity which merges with the
Company or which acquires substantially all of the assets
of the Company and which agrees to be bound hereby. The
enforceability of Executive's rights under the Agreement
shall not be affected by any assignment or merger.
7.3. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective heirs,
personal representatives, successors and permitted
assigns.
7.4. This Agreement constitutes the entire
agreement between the parties and contains all the
agreements between such parties with respect to the
subject matter hereof. This Agreement supersedes all
other agreements, oral or in writing, between the parties
with respect to the subject matter hereof.
7.5. No change or modification of this Agreement
shall be valid unless the same shall be approved by the
Board and in writing and signed by Executive and an
authorized representative of the Company other than
Executive. No waiver of any provisions of this Agreement
shall be valid unless in writing and signed by the person
or party to be charged.
7.6. If any provisions of this Agreement (or
portions thereof) shall, for any reason, be invalid or
unenforceable, such provisions (or portions thereof)
shall be ineffective only to the extent of such
invalidity or unenforceability, and the remaining
provisions or portions shall nevertheless be valid,
enforceable and of full force and effect.
7.7 The Section or paragraph headings or titles
are for convenience only and shall not be deemed a part
of this Agreement.
7.8 This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an
original and all of which taken together shall constitute
a single instrument.
7.9 If Executive or his estate or designee
prevails in any action to enforce their rights under this
Agreement, they shall be entitled to receive their
attorneys' fees, costs and expenses incurred in enforcing
their rights under this Agreement, as well as interest at
the Prime Rate as publicly announced by The Northern
Trust Company of Chicago from time to time on the amount
of the judgment from the date of demand for payment
hereunder through the date of receipt of the amount of
the judgment.
8. Arbitration. Each of the undersigned hereby agrees
that any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, including but not
limited to any claims of discrimination and wrongful
termination, will be submitted for arbitration in accordance
with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered
by the Arbitrator(s) may be entered in any court having
jurisdiction thereof.
LAGASSE BROS., INC.,
a Louisiana corporation
ATTEST:_______________________ By:_______________________
Secretary Chairman of the Board and
Chief Executive Officer
_____________________________________
[Executive]
EXHIBIT 2.4(a)(iv)
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made
as of , 1996, by and between United Stationers
Supply Co., an Illinois corporation ("Purchaser"), and
_______________________ residing at
___________________________("Shareholder").
RECITALS
Concurrently with the execution and delivery of this
Agreement, Purchaser is purchasing from Shareholder and other
Shareholders all of the outstanding shares (the "Shares") of
common stock, no par value, of Lagasse Bros., Inc. (the
"Company") pursuant to the terms and conditions of a stock
purchase agreement made as of October 1, 1996 (the "Stock
Purchase Agreement"). Section 2.4(a)(iv) of the Stock
Purchase Agreement requires that noncompetition agreements be
executed and delivered by each of the Shareholders as a
condition to the purchase of the Shares by Purchaser.
AGREEMENT
The parties, intending to be legally bound, agree as
follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement
shall have the meanings ascribed to them in the Stock Purchase
Agreement.
2. ACKNOWLEDGMENTS BY SHAREHOLDER
Shareholder acknowledges that (a) Shareholder has
occupied a position of trust and confidence with the Company
prior to the date hereof and has become familiar with the
following, any and all of which constitute confidential
information of the Company, (collectively the "Confidential
Information"): (i) any and all trade secrets concerning the
business and affairs of the Company, product specifications,
data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions
and ideas, past, current and planned research and development,
current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer
requirements, price lists, market studies, business plans,
computer software and programs (including object code and
source code), computer software and database technologies,
systems, structures and architectures (and related processes,
formulae, compositions, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and
information of the Company and any other information, however
documented, of the Company that is a trade secret; (ii) any
and all information concerning the business and affairs of the
Company (which includes historical financial statements,
financial projections and budgets, historical and projected
sales, capital spending budgets and plans, the names and
backgrounds of key personnel, personnel training and
techniques and materials), however documented; and (iii) any
and all notes, analysis, compilations, studies, summaries, and
other material prepared by or for the Company containing or
based, in whole or in part, on any information included in the
foregoing, (b) the business of the Company is national in
scope, (c) its products and services are marketed throughout
the United States; (d) the Company compete with other
businesses that are or could be located in any part of the
United States; (e) Purchaser has required that Shareholder
make the covenants set forth in Sections 3 and 4 of this
Agreement as a condition to the Purchaser's purchase of the
Shares owned by Shareholders; (f) the provisions of Sections 3
and 4 of this Agreement are reasonable and necessary to
protect and preserve the Company's business, and (g) the
Company would be irreparably damaged if Shareholder were to
breach the covenants set forth in Sections 3 and 4 of this
Agreement.
3. CONFIDENTIAL INFORMATION
Shareholder acknowledges and agrees that all Confidential
Information known or obtained by Shareholder, whether before
or after the date hereof, is the property of the Company.
Therefore, Shareholder agrees that Shareholder will not, at
any time, disclose to any unauthorized Persons or use for his
own account or for the benefit of any third party any
Confidential Information, whether Shareholder has such
information in Shareholder's memory or embodied in writing or
other physical form, without Purchaser's written consent,
unless and to the extent that the Confidential Information is
or becomes generally known to and available for use by the
public other than as a result of Shareholder's fault or the
fault of any other Person bound by a duty of confidentiality
to Purchaser or the Acquired Company. Shareholder agrees to
deliver to Purchaser at the time of execution of this
Agreement, and at any other time Purchaser may request, all
documents, memoranda, notes, plans, records, reports, and
other documentation, models, components, devices, or computer
software, whether embodied in a disk or in other form (and all
copies of all of the foregoing), relating to the business,
operations, or affairs of the Company and any other
Confidential Information that Shareholder may then possess or
have under Shareholder's control.
4. NONCOMPETITION
As an inducement for Purchaser to enter into the Stock
Purchase Agreement and as additional consideration for the
consideration to be paid to Shareholder under the Stock
Purchase Agreement, Shareholder agrees that:
(a) For a period of two years after the Closing:
(i) Shareholder will not, directly or indirectly,
engage or invest in, own, manage, operate,
finance, control, or participate in the
ownership, management, operation, financing, or
control of, be employed by, associated with, or
in any manner connected with, lend
Shareholder's name or any similar name to, lend
Shareholder's credit to, or render services or
advice to, any business whose products or
activities compete in whole or in part with the
products or activities of the Company, anywhere
within any parish in the State of Louisiana, or
in any county in the United States in which the
Company, at the time of the Closing, has a
branch; provided, however, that Shareholder may
purchase or otherwise acquire up to (but not
more than) one percent of any class of
securities of any enterprise (but without
otherwise participating in the activities of
such enterprise) if such securities are listed
on any national or regional securities exchange
or have been registered under Section 12(g) of
the Securities Exchange Act of 1934.
Shareholder agrees that this covenant is
reasonable with respect to its duration,
geographical area, and scope.
(ii) Shareholder will not, directly or
indirectly, either for himself or any other
Person, (A) induce or attempt to induce any
employee of the Company to leave the employ of
the Company, (B) in any way interfere with the
relationship between the Company and any
employee of the Company, (C) employ, or
otherwise engage as an employee, independent
contractor, or otherwise, any employee of the
Company, or (D) induce or attempt to induce any
customer, supplier, licensee, or business
relation of the Company to cease doing business
with the Company, or in any way interfere with
the relationship between any customer,
supplier, licensee, or business relation of the
Company.
(iii) Shareholder will not, directly or
indirectly, either for himself or any other
Person, solicit the business of any Person
known to Shareholder to be a customer of the
Company, whether or not Shareholder had
personal contact with such Person, with respect
to products or activities which compete in
whole or in part with the products or
activities of the Company;
(b) Shareholder will not, at any time during or
after the two year period, disparage Purchaser or
the Company, or any of their shareholders,
directors, officers, employees, or agents.
5. REMEDIES
If Shareholder breaches the covenants set forth in
Sections 3 or 4 of this Agreement, Purchaser and the Company
will be entitled to the following remedies:
(a) Damages from Shareholder;
(b) To offset against any and all amounts owing to
Shareholder under the Stock Purchase Agreement any
and all amounts which Purchaser or the Company claim
under Subsection 5(a) of this Agreement; and
(c) In addition to its right to damages and any other
rights it may have, to obtain injunctive or other
equitable relief to restrain any breach or
threatened breach or otherwise to specifically
enforce the provisions of Sections 3 and 4 of this
Agreement, it being agreed that money damages alone
would be inadequate to compensate the Purchaser and
the Company and would be an inadequate remedy for
such breach.
(d) The rights and remedies of the parties to this
Agreement are cumulative and not alternative.
6. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Purchaser, the
Company and Shareholder and will inure to the benefit of
Purchaser and the Company and their affiliates, successors and
assigns and Shareholder and Shareholder's assigns, heirs and
legal representatives.
7. WAIVER
The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor
any delay by any party in exercising any right, power, or
privilege under this Agreement will operate as a waiver of
such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be
discharged by one party, in whole or in part, by a waiver or
renunciation of the claim or right unless in writing signed by
the other party; (b) no waiver that may be given by a party
will be applicable except in the specific instance for which
it is given; and (c) no notice to or demand on one party will
be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take
further action without notice or demand as provided in this
Agreement.
8. GOVERNING LAW
This Agreement will be governed by the laws of the State
of Illinois without regard to conflicts of laws principles.
9. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement may
be brought against any of the parties in the courts of the
State of Illinois, County of Cook, or the State of Louisiana,
or, if it has or can acquire jurisdiction, in the appropriate
United States District Court, and each of the parties consents
to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives
any objection to venue laid therein. Process in any action or
proceeding referred to in the preceding sentence may be served
on any party anywhere in the world.
10. SEVERABILITY
Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and
valid, but if any provision or term of this Agreement is held
to be prohibited by or invalid, then such provision or term
will be ineffective only to the extent of such prohibition or
invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or term or the
remaining provisions or terms of this Agreement. If any of
the covenants set forth in Section 4 of this Agreement are
held to be unreasonable, arbitrary, or against public policy,
such covenants will be considered divisible with respect to
scope, time, and geographic area, and in such lesser scope,
time and geographic area, will be effective, binding and
enforceable against Shareholder.
11. COUNTERPARTS
This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together,
will be deemed to constitute one and the same agreement.
12. SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided
for convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections"
refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this
Agreement will be construed to be of such gender or number as
the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding
words or terms.
13. NOTICES
All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by facsimile (with written
confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case
to the appropriate addresses and facsimile numbers set forth
below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
Shareholder: _______________________________
_______________________________
Facsimile No.: ________________
Purchaser: United Stationers Supply Co.
2200 East Golf Road
Des Plaines, IL 60016-1267
Attention: President
Facsimile No.:___________
14. ENTIRE AGREEMENT
This Agreement and the Stock Purchase Agreement
constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and supersede
all prior written and oral agreements and understandings
between Purchaser and Shareholder with respect to the subject
matter of this Agreement. This Agreement may not be amended
except by a written agreement executed by the party to be
charged with the amendment.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first above written.
PURCHASER: COMPANY:
United Stationers Supply Co. Lagasse Bros., Inc.
By: ________________________ By: ____________________________
Its Its
SHAREHOLDER:
______________________________
[NAME]
EXHIBIT 2.4(c)
ESCROW AGREEMENT
This Escrow Agreement, dated as of [DATE], 1996 (the
"Closing Date"), among United Stationers Supply Co., an
Illinois corporation ("Purchaser"), and Kevin C. Lagasse,
Cynthia Lagasse, David C. Lagasse, Linette Lagasse Abadie,
Clinton G. Lagasse, Raymond J. Lagasse and Rickey Lagasse,
(the"Shareholders") being all of the shareholders of Lagasse
Bros., Inc., a Louisiana corporation (the "Company")., and
, a [national banking association [bank organized under the
laws of ], as escrow agent ("Escrow Agent").
This is the Escrow Agreement referred to in the Stock
Purchase Agreement dated October 1, 1996 (the
"Purchase Agreement") among Purchaser and Shareholders.
Capitalized terms used in this agreement without definition
shall have the respective meanings given to them in the
Purchase Agreement.
The parties, intending to be legally bound, hereby agree
as follows:
1. ESTABLISHMENT OF ESCROW
(a) Purchaser is depositing with Escrow Agent an amount
equal to $4,500,000.00 in immediately available funds plus $
, being an amount equal to the estimated Adjustment Amount as
described in the Purchase Agreement. These sums, as
increased by any earnings thereon and as reduced by any
disbursements, amounts withdrawn under Section 5(j), or losses
on investments, are referred to herein as the "Escrow Fund".
Escrow Agent acknowledges receipt thereof.
(b) Escrow Agent hereby agrees to act as escrow agent
and to hold, safeguard and disburse the Escrow Fund pursuant
to the terms and conditions hereof.
2. INVESTMENT OF FUNDS
Except as Purchaser and Shareholders may from time to
time jointly instruct Escrow Agent in writing, the Escrow Fund
shall be invested from time to time, to the extent possible,
in United States Treasury bills having a remaining maturity of
90 days or less and repurchase obligations secured by such
United States Treasury Bills, with any remainder being
deposited and maintained in a money market deposit account
with Escrow Agent, until disbursement of the entire Escrow
Fund. Escrow Agent is authorized to liquidate in accordance
with its customary procedures any portion of the Escrow Fund
consisting of investments to provide for payments required to
be made under this Agreement.
3. CLAIMS
(a) If Purchaser gives a notice to Shareholders and
Escrow Agent stating that the Adjustment Amount has been
determined in accordance with Section 2.6 of the Purchase
Agreement and specifying the dollar amount payable to
Purchaser or Shareholders pursuant to Section 2.6(b) of the
Purchase Agreement as a result of such determination, on the
tenth business day following such notice Escrow Agent shall
pay to Purchaser or Shareholders (in equal shares) the dollar
amount so specified from (and only to the extent of) the
Escrow Fund. Escrow Agent shall not inquire into or consider
whether the Adjustment Amount has been determined in
accordance with the requirements of the Purchase Agreement.
In addition, upon disbursement by the Escrow Agent of the
Adjustment Amount, the Escrow Agent will also disburse in
equal shares to the Shareholders a portion of the remaining
balance of the Escrow Fund to reduce the Escrow Fund to
$3,000,000.00.
(b) From time to time on or before , Purchaser
may give notice (a "Notice") to Shareholders and Escrow Agent
specifying in reasonable detail the nature and dollar amount
of any claim (a "Claim") it may have under Section 10 of the
Purchase Agreement; Purchaser may make more than one claim
with respect to any underlying state of facts. If
Shareholders give notice to Purchaser and Escrow Agent
disputing any Claim (a "Counter Notice") within 30 days
following receipt by Escrow Agent of the Notice regarding such
Claim, such Claim shall be resolved as provided in Section
3(c). If no Counter Notice is received by Escrow Agent
within such 30-day period, then the dollar amount of damages
claimed by Purchaser as set forth in its Notice shall be
deemed established for purposes of this Escrow Agreement and
the Purchase Agreement and, at the end of such 30-day period,
Escrow Agent shall pay to Purchaser the dollar amount claimed
in the Notice from (and only to the extent of) the Escrow
Fund. Escrow Agent shall not inquire into or consider whether
a Claim complies with the requirements of the Purchase
Agreement.
(c) If a Counter Notice is given with respect to a
claim, Escrow Agent shall make payment with respect thereto
only in accordance with (i) joint written instructions of
Purchaser and Shareholders or (ii) a final non-appealable
order of a court of competent jurisdiction. Any court order
shall be accompanied by a legal opinion by counsel for the
presenting party satisfactory to Escrow Agent to the effect
that the order is final and non-appealable. Escrow Agent
shall act on such court order and legal opinion without
further question.
4. TERMINATION OF ESCROW
On , 1997 Escrow Agent shall pay and
distribute the then amount of Escrow Fund to Shareholders in
equal shares, unless (i) any Claims are then pending, in which
case an amount equal to the aggregate dollar amount of such
Claims (as shown in the Notices of such Claims) shall be
retained by Escrow Agent in the Escrow Fund (and the balance
paid to Shareholders in such proportions) or (ii) Purchaser
has given notice to Shareholders and Escrow Agent specifying
in reasonable detail the nature of any other claim it may have
under Section 10 of the Purchase Agreement with respect to
which it is unable to specify the amount of Damages, in which
case their entire Escrow Fund shall be retained by Escrow
Agent, in either case until it receives joint written
instructions of Purchaser and Shareholders or a final non-
appealable order of a court of competent jurisdiction as
contemplated by Section 3(b).
5. DUTIES OF ESCROW AGENT
(a) Escrow Agent shall not be under any duty to give the
Escrow Fund held by it hereunder any greater degree of care
than it gives its own similar property and shall not be
required to invest any funds held hereunder except as directed
in this Agreement. Uninvested funds held hereunder shall not
earn or accrue interest.
(b) Escrow Agent shall not be liable, except for its own
gross negligence or willful misconduct and, except with
respect to claims based upon such gross negligence or willful
misconduct that are successfully asserted against Escrow
Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless Escrow Agent (and any successor
Escrow Agent) from and against any and all losses,
liabilities, claims, actions, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of
and in connection with this Agreement. Without limiting the
foregoing, Escrow Agent shall in no event be liable in
connection with its investment or reinvestment of any cash
held by it hereunder in good faith, in accordance with the
terms hereof, including, without limitation, any liability for
any delays (not resulting from its gross negligence or willful
misconduct) in the investment or reinvestment of the Escrow
Fund, or any loss of interest incident to any such delays.
(c) Escrow Agent shall be entitled to rely upon any
order, judgment, certif1cation, demand, notice, instrument or
other writing delivered to it hereunder without being required
to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity of the service
thereof. Escrow Agent may act in reliance upon any instrument
or signature believed by it to be genuine and may assume that
the person purporting to give receipt or advice or make any
statement or execute any document in connection with the
provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned
representative of any party hereto which is an entity other
than a natural person has full power and authority to instruct
Escrow Agent on behalf of that party unless written notice to
the contrary is delivered to Escrow Agent.
(d) Escrow Agent may act pursuant to the advice of
counsel with respect to any matter relating to this Agreement
and shall not be liable for any action taken or omitted by it
in good faith in accordance with such advice.
(e) Escrow Agent does not have any interest in the
Escrow Fund deposited hereunder but is serving as escrow
holder only and having only possession thereof. Any payments
of income from this Escrow Fund shall be subject to
withholding regulations then in force with respect to United
States taxes. The parties hereto will provide Escrow Agent
with appropriate Internal Revenue Service Forms W-9 for tax
identification number certification, or non-resident alien
certif1cations. This Section 5(e) and Section 5(b) shall
survive notwithstanding any termination of this Agreement or
the resignation of Escrow Agent.
(f) Escrow Agent makes no representation as to the
validity, value, genuineness or the collectability of any
security or other document or instrument held by or delivered
to it.
(g) Escrow Agent shall not be called upon to advise any
party as to the wisdom in selling or retaining or taking or
refraining from any action with respect to any securities or
other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at
any time resign as such by delivering the Escrow Fund to any
successor Escrow Agent jointly designated by the other parties
hereto in writing, or to any court of competent jurisdiction,
whereupon Escrow Agent shall be discharged of and from any and
all further obligations arising in connection with this
Agreement. The resignation of Escrow Agent will take effect
on the earlier of (a) the appointment of a successor
(including a court of competent jurisdiction) or (b) the day
which is 30 days after the date of delivery of its written
notice of resignation to the other parties hereto. If at that
time Escrow Agent has not received a designation of a
successor Escrow Agent, Escrow Agent's sole responsibility
after that time shall be to retain and safeguard the Escrow
Fund until receipt of a designation of successor Escrow Agent
or a joint written disposition instruction by the other
parties hereto or a final non-appealable order of a court of
competent jurisdiction.
(i) In the event of any disagreement between the other
parties hereto resulting in adverse claims or demands being
made in connection with the Escrow Fund or in the event that
Escrow Agent is in doubt as to what action it should take
hereunder, Escrow Agent shall be entitled to retain the Escrow
Fund until Escrow Agent shall have received (i) a final non-
appealable order of a court of competent jurisdiction
directing delivery of the Escrow Fund or (ii) a written
agreement executed by the other parties hereto directing
delivery of the Escrow Fund, in which event Escrow Agent shall
disburse the Escrow Fund in accordance with such order or
agreement. Any court order shall be accompanied by a legal
opinion by counsel for the presenting party satisfactory to
Escrow Agent to the effect that the order is final and non-
appealable. Escrow Agent shall act on such court order and
legal opinion without further question.
(j) Purchaser and Shareholders shall pay Escrow Agent
compensation (as payment in full) for the services to be
rendered by Escrow Agent hereunder in the amount of $
at the time of execution of this Agreement and $
annually thereafter and agree to reimburse Escrow Agent for
all reasonable expenses, disbursements and advances incurred
or made by Escrow Agent in performance of its duties hereunder
(including reasonable fees, expenses and disbursements of its
counsel). Any such compensation and reimbursement to which
Escrow Agent is entitled shall be borne 50% by Purchaser, and
50% by Shareholders in equal shares. Any fees or expenses of
Escrow Agent or its counsel that are not paid as provided for
herein may be taken from any property held by Escrow Agent
hereunder.
(k) No printed or other matter in any language
(including, without limitation, prospectuses, notices, reports
and promotional material) that mentions Escrow Agent's name or
the rights, powers, or duties of Escrow Agent shall be issued
by the other parties hereto or on such parties' behalf unless
Escrow Agent shall first have given its specific written
consent thereto.
(l) The other parties hereto authorize Escrow Agent, for
any securities held hereunder, to use the services of any
United States central securities depository it reasonably
deems appropriate, including, without limitation, the
Depositary Trust Company and the Federal Reserve Book Entry
System.
6. LIMITED RESPONSIBILITY
This Agreement expressly sets forth all the duties of
Escrow Agent with respect to any and all matters pertinent
hereto. No implied duties or obligations shall be read into
this agreement against Escrow Agent. Escrow Agent shall not
be bound by the provisions of any agreement among the other
parties hereto except this Agreement.
7. OWNERSHIP FOR TAX PURPOSES
Shareholders agree that, for purposes of federal and
other taxes based on income, Each Shareholder will be treated
as the owner of an equal percentage of the Escrow Fund,
respectively, and each Shareholder will report all income, if
any, that is eamed on, or derived from, the Escrow Fund as
their income, in such proportions, in the taxable year or
years in which such income is properly includible and pay any
taxes attributable thereto.
8. NOTICES
All notices, consents, waivers and other communications
under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by telecopier (with written
confirmation of receipt) provided that a copy is mailed by
registered mail, return receipt requested, or (c) when
received by the addressee, if sent by a nationally recognized
overnight delivery service (receipt requested), in each case
to the appropriate addresses and telecopier numbers set forth
below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Shareholders:
Attention:
Facsimile:
with a copy to:
Facsimile:
Purchaser: United Stationers Supply Co.
2200 East Golf Road
Des Plaines, IL 60016-1267
Attention: President
Facsimile:
with a copy to: Otis H. Halleen, General Counsel
2200 East Golf Road
Des Plaines, IL 60016-1267
Facsimile: (847) 699-3193
Escrow Agent:
Attention:
Facsimile:
with a copy to:
Attention:
Facsimile:
9. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement may
be brought against any of the parties in the courts of the
State of Illinois, County of Cook, or, if it has or can
acquire jurisdiction, in the United States District Court for
the Northern District of Illinois, and each of the parties
consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such act1on or
proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the
world.
10. COUNTERPARTS
This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original
and all of which, when taken together, will be deemed to
constitute one and the same.
11. SECTION HEADINGS
The headings of sections in this Agreement are provided
for convenience only and will not affect its construction or
interpretation.
12. WAIVER
The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor
any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power,
or privilege, and no single or partial exercise of any such
right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of
any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out
of this Agreement or the documents referred to in this
Agreement can be discharged by one party, in whole or in part,
by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand
on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in
this Agreement.
13. EXCLUSIVE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the
parties with respect to its subject matter and constitutes
(along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement
between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement
executed by the Purchaser, the Shareholders, and the Escrow
Agent.
14. GOVERNING LAW
This Agreement shall be governed by the laws of the State
of Illinois without regard to conflicts of law principles.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.
Purchaser: Shareholders:
United Stationers Supply Co.
/s/ Kevin C. Lagasse
By: __________________________ Kevin C. Lagasse
Name:
Title:
/s/ Cynthia Lagasse
Cynthia Lagasse
/s/ David C. Lagasse
David C. Lagasse
Escrow Agent: /s/ Linette Lagasse Abadie
Linette Lagasse Abadie
By:___________________________ /s/ Clinton G. Lagasse
Name: Clinton G. Lagasse
Title:
/s/ Raymond J. Lagasse
Raymond J. Lagasse
/s/ Rickey Lagasse
Rickey Lagasse
EXHIBIT 7.4(a)
Opinion of Counsel to Shareholders
[DATE]
United Stationers Supply Co.
2200 East Golf Road
Des Plaines, IL 60016-1267
Gentlemen:
We have acted as counsel to Lagasse Bros., Inc., a
Louisiana corporation (the "Company"), and Kevin C. Lagasse,
Cynthia Lagasse, David C. Lagasse, Linette Lagasse Abadie,
Clinton G. Lagasse, Raymond J. Lagasse and Rickey Lagasse,
being all of the shareholders of the Company (the
"Shareholders") in connection with the Stock Purchase
Agreement dated October 1,1996 (the "Agreement") between the
Shareholders and United Stationers Supply Co., an Illinois
corporation ("Purchaser"). This is the opinion contemplated
by Section 7.4(a) of the Agreement. All capitalized terms used
in this opinion without definition have the respective
meanings given to them in the Agreement or the Accord referred
to below.
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord,
and this Opinion Letter should be read in conjunction
therewith. The law covered by the opinions expressed herein
is limited to the Federal Law of the United States and the Law
of the State(s) of Louisiana.
Based on the foregoing, our opinion is as follows:
1. The Agreement, the Escrow Agreement and the
Shareholders' Releases are enforceable against the
Shareholders.
2. The authorized capital stock of the Company consists
of 10,000 shares of common stock, no par value, of which
2,088 shares are outstanding. Shareholders own all of the
outstanding stock of record and beneficially, free and clear
of all adverse claims. As a result of the delivery of
certificates to Purchaser and the payment to Shareholders
being made at the Closing, Purchaser is acquiring ownership of
all of the outstanding shares, free and clear of all adverse
claims.
3. The Company is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation as set forth in Part 3.1(a) of
the Disclosure Letter, with full corporate power and authority
to own its properties and to engage in its business as
presently conducted or contemplated, and is duly qualified and
in good standing as a foreign corporation under the laws of
each other jurisdiction in which it is authorized to do
business as set forth in Part 3.1(a) of the Disclosure Letter.
All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully
paid and nonassessable and were not issued in violation of the
preemptive rights of any Person.
4. Neither the execution and delivery of the Agreement
nor the consummation of any or all of the Contemplated
Transactions (a) breaches or constitutes a default (or an
event that, with notice or lapse of time or both, would
constitute a default) under any agreement or commitment
[describe selection criteria] to which any shareholder is
party or (b) violates any statute, law, regulation or rule, or
any judgment, decree or order of any court or other
Governmental Body applicable to any Shareholder.
5. Neither the execution and delivery of the Agreement
nor the consummation of any or all of the Contemplated
Transactions (a) violates any provision of the certificate of
incorporation or bylaws (or other governing instrument) of the
Company, (b) breaches or constitutes a default (or an event
that, with notice or lapse of time or both, would constitute a
default) under, or results in the termination of, or
accelerates the performance required by, or excuses
performance by any Person of any of its obligations under, or
causes the acceleration of the maturity of any debt or
obligation pursuant to, or results in the creation or
imposition of any Encumbrance upon any property or assets of
the Company under, any agreement or commitment [describe
selection criteria] to which the Company is a party or by
which any of their respective properties or assets are bound,
or to which any of the properties or assets of the Company are
subject, or (c) violates any statute, law, regulation, or
rule, or any judgment, decree or order of any court or other
Governmental Body applicable to the Company.
6. Except for requirements of the HSR Act, no consent,
approval or authorization of, or declaration, filing or
registration with, any Governmental Body is required in
connection with the execution, delivery and performance of the
Agreement or the consummation of the Contemplated
Transactions.
We hereby confirm to you that, except as set forth in
Part 3.15 of the Disclosure Letter, there is no Proceeding by
or before any court or Governmental Body pending or overtly
threatened against or involving the Company or that questions
or challenges the validity of the Agreement or any action
taken or to be taken by the Company pursuant to the Agreement
or in connection with the Contemplated Transactions, and the
Company is not subject to any judgment, order or decree having
prospective effect.
The Accord is changed for purposes of this Opinion Letter
pursuant to 21 of the Accord as follows:
(a) The Primary Lawyer Group shall include all lawyers
presently at our firm who have given substantive
attention to the affairs of any of the Shareholders
or the Company since
(b) Accord l9(e) and 19(j) are deleted.
We understand that you are delivering a copy of this
opinion to [identify lenders to Purchaser] in connection with
the financing of the transactions contemplated by the
Agreement and agree that [those lenders] may rely on this
opinion as if it were addressed to them.
Very truly yours,
EXHIBIT 8.4
Opinion of Counsel to Purchaser
[DATE]
[Names and Addresses of Shareholders]
Ladies and Gentlemen:
I am General Counsel of, have acted as counsel to United
Stationers Supply Co., an Illinois corporation ("Purchaser"),
in connection with the Stock Purchase Agreement dated October
1, 1996 (the "Agreement") between Lagasse Bros., Inc., a
Louisiana corporation (the "Company"), and Kevin C. Lagasse,
Cynthia Lagasse, David C. Lagasse, Linette Lagasse Abadie,
Clinton G. Lagasse, Raymond J. Lagasse and Rickey Lagasse,
being all of the shareholders of the Company (the
"Shareholders"), and Purchaser. This is the opinion
contemplated by Section 8.4(a) of the Agreement. All
capitalized terms used in this opinion without definition have
the respective meanings given to them in the Agreement or the
Accord referred to below.
This Opinion Letter is governed by, and shall be
interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord,
and this Opinion Letter should be read in conjunction
therewith. The law covered by the opinions expressed herein
is limited to the Federal Law of the United States and the Law
of the State of Illinois.
Based on the foregoing, my opinion is as follows:
1. The Agreement and the Escrow Agreement are
enforceable against Purchaser.
2. Neither the execution and delivery of the Agreement
and the Escrow Agreement nor the performance of Purchaser's
obligations thereunder (a) violates any provision of the
certificate of incorporation or bylaws (or other governing
instrument) of Purchaser, (b) breaches or constitutes a
default (or an event that, with notice or lapse of time or
both, would constitute a default) under any agreement or
commitment [describe selection criteria] to which Purchaser is
party or (c) violates any statute, law, regulation or rule, or
any judgment, decree or order of any court or Governmental
Body applicable to Purchaser.
Very truly yours,
Otis H. Halleen
General Counsel
BII\65377_6 11/04/96 14:12pm
EXECUTION COPY
************************************************************
Exhibit 99.2
UNITED STATIONERS SUPPLY CO.
and
UNITED STATIONERS INC.
______________________________
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of October 31, 1996
(amending and restating the Credit Agreement
dated as of March 30, 1995)
______________________________
$540,000,000
THE CHASE MANHATTAN BANK,
as Agent
CHASE SECURITIES INC.,
as Arranger
************************************************************
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to
which it is attached but is inserted for convenience of reference
only.
Page
Section 1. Definitions and Accounting Matters 2
1.01 Certain Defined Terms 2
1.02 Accounting Terms and Determinations 37
1.03 Classes and Types of Loans 38
Section 2. Commitments, Loans and Prepayments 38
2.01 Loans 38
2.02 Borrowings 40
2.03 Letters of Credit 43
2.04 Changes of Commitments 49
2.05 Commitment Fee 50
2.06 Lending Offices 51
2.07 Several Obligations; Remedies Independent 51
2.08 Evidence of Debt; Registered Loans 51
2.09 Optional Prepayments and Conversions or Continuations of Loans 53
2.10 Mandatory Prepayments and Reductions of Commitments 53
Section 3. Payments of Principal and Interest 57
3.01 Repayment of Loans 57
3.02 Interest 58
Section 4. Payments; Pro Rata Treatment; Computations; Etc. 59
4.01 Payments 59
4.02 Pro Rata Treatment 60
4.03 Computations 61
4.04 Minimum Amounts 61
4.05 Certain Notices 62
4.06 Non-Receipt of Funds by the Agent 63
4.07 Sharing of Payments, Etc. 64
Section 5. Yield Protection, Etc. 66
5.01 Additional Costs 66
5.02 Limitation on Types of Loans 69
5.03 Illegality 69
5.04 Treatment of Affected Loans 70
5.05 Compensation 71
5.06 Additional Costs in Respect of Letters of
Credit 71
5.07 U.S. Taxes 72
Section 6. Guarantee 76
6.01 The Guarantee 76
6.02 Obligations Unconditional 76
6.03 Reinstatement 77
6.04 Subrogation 78
6.05 Remedies 78
6.06 Continuing Guarantee 78
Section 7. Conditions Precedent 78
7.01 Effectiveness 78
7.02 Initial and Subsequent Extensions of Credit 83
Section 8. Representations and Warranties 84
8.01 Corporate Existence 84
8.02 Financial Condition 84
8.03 Litigation 85
8.04 No Breach 85
8.05 Action 86
8.06 Approvals 86
8.07 Use of Credit 87
8.08 ERISA 87
8.09 Taxes 87
8.10 Investment Company Act 88
8.11 Public Utility Holding Company Act 88
8.12 Material Agreements and Liens 88
8.13 Environmental Matters 89
8.14 Capitalization 91
8.15 Subsidiaries, Etc. 92
8.16 Title to Assets 92
8.17 True and Complete Disclosure 92
8.18 Real Property 93
8.19 Security Documents 93
Section 9. Covenants of the Obligors 93
9.01 Financial Statements, Etc 94
9.02 Litigation 99
9.03 Existence, Etc. 99
9.04 Insurance 100
9.05 Prohibition of Fundamental Changes 102
9.06 Limitation on Liens 103
9.07 Indebtedness 106
9.08 Investments 107
9.09 Dividend Payments 108
9.10 Net Worth 111
9.11 Debt to Cash Flow Ratio 111
9.12 Fixed Charges Ratio 112
9.13 Interest Coverage Ratio 112
9.14 Capital Expenditures 113
9.15 Interest Rate Protection Agreements 113
9.16 Subordinated Indebtedness 114
9.17 Lines of Business 114
9.18 Transactions with Affiliates 114
9.19 Use of Proceeds 115
9.20 Modifications of Certain Documents 115
9.21 Ownership of the Company 116
9.22 Management Fees, Etc 116
9.23 Taxes; Tax Sharing Agreement 116
9.24 Subsidiary Guarantors; Additional Mortgaged Property 117
9.25 Termination of ERISA Plans. 118
Section 10. Events of Default 118
Section 11. The Agent 123
11.01 Appointment, Powers and Immunities 123
11.02 Reliance by Agent 124
11.03 Defaults 125
11.04 Rights as a Lender 125
11.05 Indemnification 126
11.06 Non-Reliance on Agent and Other Lenders 126
11.07 Failure to Act 127
11.08 Resignation or Removal of Agent 127
11.09 Consents under Other Basic Documents 128
11.10 Collateral Sub-Agents 128
Section 12. Miscellaneous 128
12.01 Waiver 128
12.02 Notices 128
12.03 Expenses, Etc. 129
12.04 Amendments, Etc. 131
12.05 Successors and Assigns 132
12.06 Assignments and Participations 132
12.07 Survival 136
12.08 Captions 136
12.09 Counterparts 136
12.10 Governing Law; Submission to Jurisdiction 136
12.11 Waiver of Jury Trial 137
12.12 Treatment of Certain Information; Confidentiality 137
12.13 Certain Tax Information 138
12.14 Consent to Receivables Financing. 138
SCHEDULE I - Indebtedness and Liens
SCHEDULE II - Environmental Matters
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Real Property
SCHEDULE V - Litigation
SCHEDULE VI - Capitalization
SCHEDULE VII - Target EBITDA
SCHEDULE VIII - Taxes
SCHEDULE IX - Terms of Receivables Financing
EXHIBIT A - Form of Borrowing Base Certificate
EXHIBIT B-1 - Form of Security Agreement
EXHIBIT B-2 - Form of Guarantee and Security Agreement
EXHIBIT C - Form of Pledge Agreement
EXHIBIT D - Form of Mortgage
EXHIBIT E-1 - Form of Opinion of General Counsel to the
Guarantor, to be delivered on the Effective Date
EXHIBIT E-2 - Form of Opinion of Louisiana Counsel to the
Obligors, to be delivered on the Effective Date
EXHIBIT F - Form of Opinion of Special New York Counsel to
the Agent to be delivered on the Effective Date
EXHIBIT G - Form of Confidentiality Agreement
EXHIBIT H - Form of Notice of Assignment
AMENDED AND RESTATED CREDIT AGREEMENT dated as of
October 31, 1996 (this "Agreement") among: UNITED STATIONERS
SUPPLY CO., a corporation duly organized and validly existing
under the laws of the State of Illinois (together with its
successors and assigns, the "Company"); UNITED STATIONERS INC., a
corporation duly organized and validly existing under the laws of
the State of Delaware (together with its successors and assigns,
the "Guarantor" and, together with the Company, the "Obligors");
each of the lenders that is a signatory hereto (together with its
successors and assigns in such capacity, a "Lender" and,
collectively with the Swingline Lender referred to below, the
"Lenders"); and THE CHASE MANHATTAN BANK, a New York state-
chartered banking corporation, as Swingline Lender hereunder (in
such capacity, together with its successors and assigns in such
capacity, the "Swingline Lender") and as agent for the Lenders
(in such capacity, together with its successors in such capacity,
the "Agent").
WHEREAS, the Company, the Guarantor, the Agent, and
certain of the Lenders are parties to a Credit Agreement dated as
of March 30, 1995 (as heretofore amended and supplemented and in
effect on the date hereof, the "Existing Credit Agreement") among
the Company (as successor by merger to Associated Stationers,
Inc.), the Guarantor (as successor by merger to Associated
Holdings, Inc. ("Associated Holdings")), The Chase Manhattan
Bank, as Agent for the lenders named therein, and certain of the
Lenders, providing, subject to the terms and conditions thereof
for extensions of credit (by the making of loans and issuing
letters of credit) to the Company in an aggregate principal
amount not exceeding $525,000,000;
WHEREAS, the Company has entered into an agreement
dated October 1, 1996 (the "Purchase Agreement") pursuant to
which the Company has agreed to acquire for cash 100% of the
issued and outstanding shares of capital stock of Lagasse Bros.,
Inc., a Louisiana corporation whose headquarters are in New
Orleans, Louisiana ("Lagasse") for a purchase price not exceeding
$54,000,000 (the "Lagasse Acquisition");
WHEREAS, the Obligors have requested the Lenders to
amend and restate the Existing Credit Agreement such that the
aggregate amount of credit available to the Company thereunder
would be increased to $540,000,000 aggregate principal amount, a
portion of the proceeds of which will be used to finance the
Lagasse Acquisition and to repay certain Indebtedness of Lagasse;
and
WHEREAS, in order to enable the Company to consummate
the Lagasse Acquisition and to finance certain amounts owing in
connection with the Lagasse Acquisition, to repay certain
Indebtedness of Lagasse and to provide on-going working capital
for the Company and its Subsidiaries, the Lenders and the
Obligors wish to amend and restate the Existing Credit Agreement
in its entirety, it being the intention of the parties hereto
that the loans and letters of credit outstanding under the
Existing Credit Agreement on the Effective Date (as hereinafter
defined) shall continue and remain outstanding and not be repaid
on the Effective Date (as so defined);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
"Accrued Warrant Liabilities" shall mean any
liabilities of the Guarantor under Section 7.02(c) of the Warrant
Agreement.
"ACS" shall mean Affiliated Computer Services, Inc.
"Acquisition" shall mean (a) the purchase by Associated
Holdings of 92.5% of the then outstanding shares of capital stock
of the Guarantor on March 30, 1995 pursuant to the Tender Offer
Documents (as defined in the Existing Credit Agreement) and
(b) the Mergers.
"Affiliate" shall mean, in respect of any Person (the
"Relevant Person"), any other Person that directly or indirectly
controls, or is under common control with, or is controlled by,
the Relevant Person and, if such other Person is an individual,
any member of the immediate family (including parents, spouse,
children and siblings) of such individual and any trust whose
principal beneficiary is such individual or one or more members
of such immediate family and any Person who is controlled by any
such member or trust. As used in this definition, "control"
(including, with its correlative meanings, "controlled by" and
"under common control with") shall mean possession, directly or
indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities
or partnership or other ownership interests, by contract or other
wise), provided that, in any event, any Person that owns directly
or indirectly securities having 5% or more of the voting power
for the election of directors or other governing body of a cor
poration or 5% or more of the partnership or other ownership
interests of any other Person (other than as a limited partner of
such other Person) will be deemed to control such corporation or
other Person. Notwithstanding the foregoing, (a) no individual
shall be an Affiliate of any Relevant Person solely by reason of
his or her being a director, officer or employee of such Relevant
Person or any of its Subsidiaries, (b) none of the Subsidiaries
of the Guarantor shall be Affiliates of the Guarantor or of any
other Subsidiary of the Guarantor, (c) the Guarantor shall not be
an Affiliate of any of its Subsidiaries, (d) neither the Agent
nor any Lender shall be an Affiliate of the Guarantor or of any
Subsidiary of the Guarantor and (e) neither The Chase Manhattan
Corporation nor any of its Subsidiaries or Affiliates shall be an
Affiliate of the Guarantor or of any Subsidiary of the Guarantor.
"Applicable Lending Office" shall mean, for each Lender
and for each Type of Loan, the "Lending Office" of such Lender
(or of an affiliate of such Lender) designated for such Type of
Loan on the signature pages hereof or such other office of such
Lender (or of an affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Company as the
office by which its Loans of such Type are to be made and
maintained. The Swingline Loans shall be made and maintained at
the "Lending Office" of the Swingline Lender.
"Applicable Margin" shall mean, as of any date:
(a) for Tranche A Term Loans and Revolving Credit
Loans, 2.50% per annum for Eurodollar Loans and 1.25% per
annum for Base Rate Loans; provided that the Applicable
Margin for each Type of Tranche A Term Loan and Revolving
Credit Loan, for any period from and including the date on
which the Company shall have delivered a certificate
pursuant to clause (iii) of the last paragraph of Section
9.01 hereof demonstrating in reasonable detail (based upon
financial statements for the fiscal period of the Guarantor
most recently ended that have been delivered to the Lenders
pursuant to Section 9.01(b) or (c) hereof or, in connection
with the Lagasse Acquisition, on the Effective Date) that
the Pricing Leverage Ratio, as of the end of the respective
quarterly fiscal period or fiscal year, is within one of the
ranges set forth below, to but excluding the date of
delivery of the next such certificate, shall equal the
percentage per annum set forth below for Tranche A Term
Loans and Revolving Credit Loans of such Type:
Base Rate Eurodollar
Ratio Loans Loans
Greater than 4.5 to 1 1.25% 2.50%
Less than or equal
to 4.5 to 1 but greater
than 4.0 to 1 1.00% 2.25%
Less than or equal
to 4.0 to 1 but greater
than 3.5 to 1 .75% 2.00%
Less than or equal
to 3.5 to 1 but greater
than 3.0 to 1 .50% 1.75%
Less than or equal
to 3.0 to 1 .25% 1.50%
(b) for Tranche B Term Loans, 3.00% per annum for
Eurodollar Loans and 1.75% per annum for Base Rate Loans;
provided that the Applicable Margin for each Type of
Tranche B Term Loan, for any period from and including the
date on which the Company shall have delivered a certificate
pursuant to clause (iii) of the last paragraph of Section
9.01 hereof demonstrating in reasonable detail (based upon
financial statements for the fiscal period of the Guarantor
most recently ended that have been delivered to the Lenders
pursuant to Section 9.01(b) or (c) hereof or, in connection
with the Lagasse Acquisition, on the Effective Date) that
the Pricing Leverage Ratio, as of the end of the respective
quarterly fiscal period or fiscal year, is within one of the
ranges set forth below, to but excluding the date of
delivery of the next such certificate, shall equal the
percentage per annum set forth below for Tranche B Term
Loans of such Type:
Base Rate Eurodollar
Ratio Loans Loans
Greater than 4.5 to 1 1.75% 3.00%
Less than or equal
to 4.5 to 1 but greater
than 4.0 to 1 1.50% 2.75%
Less than or equal
to 4.0 to 1 1.25% 2.50%
provided that the "Applicable Margin", during any period
when an Event of Default or Default in delivery of the
certificate pursuant to clause (iii) of the last paragraph
of Section 9.01 hereof shall have occurred and be
continuing, shall be determined without reference to the
proviso to the foregoing clause (a) or (b).
"Bankruptcy Code" shall mean the Federal Bankruptcy
Code of 1978, as amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum
equal to the higher of (a) the Federal Funds Rate for such day
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change
in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans (other than
Swingline Loans) that bear interest at rates based upon the Base
Rate.
"Basic Documents" shall mean, collectively, this
Agreement, the promissory notes (if any) delivered pursuant to
Section 2.08(d) hereof, the Letter of Credit Documents and the
Security Documents.
"BCOP" shall mean Boise Cascade Office Products
Corporation, a Delaware corporation.
"Boise" shall mean Boise Cascade Corporation, a
Delaware corporation.
"Borrowing Base" shall mean, as at any date, the sum of
(a) 80% of the aggregate amount of Eligible Receivables at said
date plus (b) 50% of Eligible Inventory at said date plus (c) the
aggregate amount of cover for Letter of Credit Liabilities held
by the Agent in the Collateral Account as contemplated in Section
2.10(h) hereof; provided that in no event shall the portion of
the Borrowing Base attributable to Eligible Inventory (i) at any
time from November 1 through February 28, exceed 65% of the
Borrowing Base and the Borrowing Base shall be reduced to the
extent such portion would otherwise exceed 65% and (ii) at any
other time, exceed 60% of the Borrowing Base and the Borrowing
Base shall be reduced to the extent such portion would otherwise
exceed 60%; and, provided, further, that the amount of the
Borrowing Base attributable to Eligible Inventory and Eligible
Receivables of Lagasse shall not at any time exceed the aggregate
unpaid principal amount of Lagasse Advances.
"Borrowing Base Certificate" shall mean a certificate
of a Responsible Officer of the Company, substantially in the
form of Exhibit A hereto and appropriately completed.
"Business Day" shall mean any day (a) on which
commercial banks are not authorized or required to close in New
York City and (b) if such day relates to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period,
that is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Expenditures" shall mean, without duplication,
for any period, expenditures (including, without limitation, the
aggregate amount of Capital Lease Obligations incurred during
such period) made by the Guarantor or any of its Subsidiaries to
acquire or construct fixed assets, plant and equipment (including
renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards
Board); and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined
in accordance with GAAP (including such Statement No. 13).
"Cash Flow" shall mean, for any period, for the
Guarantor and its Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), EBITDA for
such period minus Capital Expenditures made during such period,
(other than Capital Expenditures in excess of $15,000,000 unless
made pursuant to Section 9.14(c)(ii) hereof and provided that
Capital Lease Obligations shall be deducted only to the extent of
payments actually made during such period).
"Casualty Event" shall mean, with respect to any
Property of any Person, any loss of or damage to, or any
condemnation or other taking of, such Property for which such
Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
"Change of Control" shall mean (i) the Guarantor shall
cease to own and control, of record and beneficially, 100% of
each class of outstanding capital stock of the Company, (ii) the
Wingate Group (as defined below) shall cease to have the power,
directly or indirectly, to vote or direct the voting of
2,061,580.00 shares of the Common Stock of the Guarantor (such
number of shares to be increased or decreased, as appropriate, to
give effect to any stock dividends, split-up, revision or
reclassification after the Effective Date), (iii) any "person" or
"group" of "persons" (within the meaning of Section 13(d) of the
Exchange Act) shall have the power, directly or indirectly, to
vote or direct the voting of a greater number of securities than
the Wingate Group. The term "Wingate Group" shall mean Wingate
and, for so long as they are party to the Voting Trust Agreement,
dated as of January 31, 1992, as amended by the First Amendment
thereto dated as of March 30, 1995, among Wingate Partners, L.P.,
Wingate Partners II, L.P., Cumberland Capital Corporation, Good
Capital Co., Inc., ASI Partners, L.P., ASI Partners II, L.P. and
the other stockholders party thereto, and as amended by that
certain Joinder to Voting Trust Agreement, dated June 28, 1995
(pursuant to which ASI Partners III, L.P. became a member of the
Wingate Group) and such Voting Trust Agreement is in full force
and effect, Cumberland Capital Corporation, Good Capital Co.,
Inc., ASI Partners, L.P. and ASI Partners II, L.P.
"Chase" shall mean The Chase Manhattan Bank.
"Class" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Account" shall have the meaning assigned to
such term in Section 4.01 of the Security Agreement.
"Collateral Auditing Agent" shall have the meaning
assigned to such term in Section 9.01(i) hereof.
"Commission" shall mean the Securities and Exchange
Commission, or any regulatory body that succeeds to the functions
thereof.
"Commitments" shall mean the Revolving Credit
Commitments and the Term Loan Commitments.
"Continue", "Continuation" and "Continued" shall refer
to the continuation pursuant to Section 2.09 hereof of a
Eurodollar Loan from one Interest Period to the next Interest
Period.
"Convert", "Conversion" and "Converted" shall refer to
a conversion pursuant to Section 2.09 hereof of one Type of Loans
into another Type of Loans, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
"date hereof" and "date of this Agreement" shall mean
October 31, 1996.
"Debt to Cash Flow Ratio" shall mean, as at any date,
the ratio of (a) the aggregate Indebtedness of the Guarantor and
its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) as of such date to (b) Cash
Flow for the Reporting Period as of such date; provided that
Indebtedness (as used in this definition of "Debt to Cash Flow
Ratio") shall not include any undrawn amount under any letter of
credit for the account of the Company or its Subsidiaries; and
provided, further, that (i) upon the consummation of any
Permitted Acquisition (if the Person, line of business or
division so acquired has audited financial statements with
respect to the applicable Reporting Period or, if such audited
financial statements are not available for the entire Reporting
Period, the Guarantor has delivered to the Agent an income
statement and cash flow statement for such Person, line of
business or division for such Reporting Period (which may be
based in part on any audited financial statements available for
part of such Reporting Period) accompanied by a certificate of a
senior financial officer of the Guarantor stating that such
officer has reviewed the historical performance of such Person,
line of business or division and believes that such statements
fairly represent in all material respects the historical
performance of such entity) or (ii) the Lagasse Acquisition, the
calculation of the Debt to Cash Flow Ratio (both with respect to
Cash Flow and Indebtedness) shall be calculated as if such
Permitted Acquisition or the Lagasse Acquisition, as the case may
be, had occurred, and any Indebtedness incurred in connection
therewith had been incurred, on the first day of the Reporting
Period for the date of such Permitted Acquisition or the Lagasse
Acquisition, as the case may be.
"Default" shall mean an Event of Default or an event
that with notice or lapse of time or both would become an Event
of Default.
"Disposition" shall mean any sale, assignment, transfer
or other disposition of any Property (whether now owned or
hereafter acquired) by the Company or any of its Subsidiaries to
any other Person excluding (i) any sale, assignment, transfer or
other disposition of any Property sold or disposed of in the
ordinary course of business and on ordinary business terms,
(ii) the licensing of general intangibles in the ordinary course
of business, (iii) the sale of overdue receivables in the
ordinary course of business, (iv) the sale of worn-out or
obsolete equipment in the ordinary course of business and (v) any
Disposition of Property in connection with any Casualty Event.
"Dividend Payment" shall mean, with respect to any
Person, dividends (in cash, Property or obligations) on, or other
payments or distributions on account of, or the setting apart of
money for a sinking or other analogous fund for, or the purchase,
redemption, retirement or other acquisition of, any shares of any
class of stock of such Person or of any warrants, options or
other rights to acquire the same (or to make any payments to any
Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market or equity
value of such Person or any of its Subsidiaries), but excluding
(i) dividends payable solely in shares of common stock of such
Person, (ii) in the case of the Guarantor, dividends of
additional shares of Guarantor Preferred Stock payable to the
holders of Guarantor Preferred Stock or (iii) any cancellation of
the Guarantor Note.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Domestic Subsidiary" shall mean any Subsidiary of the
Guarantor that is organized or created under the laws of the
United States of America, any State thereof or the District of
Columbia.
"EBITDA" shall mean, for any period, the sum, for the
Guarantor and its Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), of the
following: (a) net income for such period plus (b) Interest
Expense for such period, together with any original issue
discount to the extent deducted in calculating net income plus
(c) income taxes for such period plus (d) extraordinary and
unusual items of loss for such period, including any
restructuring charges incurred in connection with the Acquisition
not exceeding $15,000,000 (pre-tax) in the aggregate, plus
(e) losses attributable to equity in Affiliates for such period
plus (f) depreciation and amortization (to the extent deducted in
computing net income) for such period minus (g) extraordinary and
unusual items of income or gain for such period minus (h) gains
attributable to equity in Affiliates for such period plus (i) all
non-cash charges related to employee compensation to the extent
deducted in calculating net profits.
"Effective Date" shall mean the date on which the
conditions to the effectiveness of this Agreement set forth in
Section 7.01 hereof shall have been satisfied or waived.
"Eligible Inventory" shall mean, as at any date, with
respect to the Company and Lagasse, the aggregate value of all
Inventory that as of the last day of the immediately preceding
month (a) is owned by the Company or Lagasse and in the
possession or under the control of the Company, Lagasse or the
Agent as at such date, (b) is (i) located in a jurisdiction in
the United States of America as to which appropriate Uniform
Commercial Code financing statements have been filed naming the
Company or Lagasse, as the case may be, as "debtor" and the Agent
on behalf of the Secured Parties (as defined in the Security
Agreement) as "secured party" or (ii) covered by an on-board bill
of lading or other document of title issued in the name of the
Company, Lagasse or the Agent and in the possession of the Agent,
(c) is in good and merchantable condition, (d) meets all
standards imposed by any governmental agency or department or
division thereof having regulatory authority over such Inventory,
its use or sale and (e) is currently saleable in the normal
course of business of the Company or Lagasse without any notice
to, or consent of, any governmental agency or department or
division thereof (excluding however, except to the extent that
the Majority Revolving Credit Lenders otherwise agree with
respect to any specific customer, any such Inventory which has
been shipped to a customer of the Company or Lagasse, even if on
a consignment or "sale or return" basis); provided that "Eligible
Inventory" shall in no event include the following:
(a) the value of any calendars, except that calendars
for the next succeeding calendar year shall not be excluded
from "Eligible Inventory" by reason of this clause (a) for
purposes of any determination of "Eligible Inventory" made
as of the last day of June, July, August, September,
October, November or December;
(b) the value of any catalogues;
(c) the value of any Inventory (other than New
Inventory), to the extent that such value exceeds 100% of
the Company's sales of such Inventory for the 12-month
period most recently ended prior to such date; and
(d) any Inventory intended for internal use by the
Company;
provided, further, that the Majority Revolving Credit Lenders
(through the Agent) may at any time exclude from Eligible
Inventory any type of Inventory that the Majority Revolving
Credit Lenders (in their reasonable determination) determine to
be unmarketable. The "value" of Eligible Inventory shall be
determined at the lower of cost or market in accordance with
GAAP, except that cost shall be determined on a
first-in-first-out basis.
"Eligible Receivables" shall mean, as at any date, the
sum of (a) all Receivables of the Company and Lagasse as of the
last day of the immediately preceding month minus (b) all
Receivable Adjustments of the Company and Lagasse, as the case
may be, as of the last day of the immediately preceding month
minus (c) the aggregate amount of Ineligible Receivables as of
the last day of the immediately preceding month.
"Environmental Claim" shall mean, with respect to any
Person, any written or oral notice, claim, demand or other
communication (collectively, a "claim") by any other Person
alleging or asserting such Person's liability for investigatory
costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or
penalties arising out of, based on or resulting from (i) the
presence, or Release, of any Hazardous Material at any location,
whether or not owned by such Person, or (ii) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law. The term "Environmental Claim" shall include,
without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law,
and any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the
environment from Hazardous Materials.
"Environmental Laws" shall mean any and all applicable
Federal, state, local and foreign laws, rules or regulations, and
applicable and legally binding orders or decrees, in each case as
now or hereafter in effect, relating to the regulation or
protection of human health, safety or the environment or to
emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes into the indoor or outdoor environment,
including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata, or otherwise
relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes.
"Equity Issuance" shall mean (a) any issuance or sale
by the Guarantor or any of its Subsidiaries after the Initial
Borrowing Date of (i) any of its capital stock, (ii) any warrants
or options exercisable in respect of its capital stock or
(iii) any other security or instrument representing an equity
interest (or the right to obtain any equity interest) in the
Guarantor or any of its Subsidiaries or (b) the receipt by the
Guarantor or any of its Subsidiaries after the Initial Borrowing
Date of any capital contribution (whether or not evidenced by any
equity security issued by the recipient of such contribution);
provided that Equity Issuance shall not include (1) any such
issuance or sale by any Subsidiary of the Guarantor to the
Guarantor or any Wholly-Owned Subsidiary of the Guarantor,
(2) any capital contribution by the Guarantor or any Wholly-Owned
Subsidiary of the Guarantor to any Subsidiary of the Guarantor,
(3) any issuance, after the Initial Borrowing Date, by the
Guarantor of Guarantor Preferred Stock to the Company in exchange
for the Guarantor Note, (4) any cancellation of the Guarantor
Note after the Initial Borrowing Date or (5) any warrants or
options issued to directors, officers or employees of the
Guarantor or any of its Subsidiaries pursuant to employee benefit
plans, incentive plans or similar plans or programs established
in the ordinary course of business and any capital stock of the
Guarantor issued upon the exercise of such warrants or options.
"Equity Rights" shall mean, with respect to any Person,
any subscriptions, options, warrants, commitments, preemptive
rights or agreements of any kind (including, without limitation,
any stockholders' or voting trust agreements) for the issuance,
sale, registration or voting of, or securities convertible into,
any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such
Person.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade
or business that is a member of any group of organizations
(i) described in Section 414(b) or (c) of the Code of which
either Obligor is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Code, described
in Section 414(m) or (o) of the Code of which either Obligor is a
member.
"Eurodollar Base Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the arithmetic
mean (rounded upwards, if necessary, to the nearest 1/16 of 1%),
as determined by the Agent, of the rates per annum quoted by the
respective Reference Banks at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) on the date two
Business Days prior to the first day of such Interest Period for
the offering by the respective Reference Banks to leading banks
in the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to
the principal amount of the Eurodollar Loan to be made by the
respective Reference Banks for such Interest Period. If any
Reference Bank is not participating in any Eurodollar Loans
during any Interest Period therefor, the Eurodollar Base Rate for
such Loans for such Interest Period shall be determined by
reference to the amount of such Loans that such Reference Bank
would have made or had outstanding had it been participating in
such Loan during such Interest Period.
"Eurodollar Loans" shall mean Loans that bear interest
at rates based on rates referred to in the definition of
"Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan
for any Interest Period therefor, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by
the Agent to be equal to the Eurodollar Base Rate for such Loan
for such Interest Period divided by 1 minus the Reserve
Requirement (if any) for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to
such term in Section 10 hereof.
"Excess Cash Flow" shall mean, for any period, the
excess of (a) Cash Flow for such period minus (b) the aggregate
amount of Fixed Charges for such period minus (c) any severance
payments incurred in connection with the Acquisition and paid in
cash during such period.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended from time to time.
"Federal Funds Rate" shall mean, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for
such Business Day shall be the average rate charged to Chase on
such Business Day on such transactions as determined by the
Agent.
"Fiscal Date" shall mean the last day of each fiscal
year of the Guarantor and the last day of each of the first
three fiscal quarters of the Guarantor.
"Fixed Charges" shall mean, for any Reporting Period,
the sum, for the Guarantor and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP),
of the following: (a) all payments of principal of Indebtedness
scheduled to be made during such Reporting Period plus (b) all
Interest Expense for such Reporting Period plus (c) income taxes
paid in cash during such Reporting Period plus (d) all dividends
paid in cash to the Guarantor during such Reporting Period.
"Fixed Charges Ratio" shall mean, as at any date, the
ratio of (a) Cash Flow for the Reporting Period as of such date
to (b) Fixed Charges for such Reporting Period.
"GAAP" shall mean generally accepted accounting
principles applied on a basis consistent with those that, in
accordance with the last sentence of Section 1.02(a) hereof, are
to be used in making the calculations for purposes of determining
compliance with this Agreement in accordance with the
requirements of the Commission and the Emerging Issues Task Force
established by the Financial Accounting Standards Board.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the Indebtedness,
net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to
purchase, sell or lease (as lessee or lessor) Property, products,
materials, supplies or services primarily for the purpose of
enabling a debtor to make payment of such debtor's obligations or
an agreement to assure a creditor against loss, and including,
without limitation, causing a bank or other financial institution
to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding endorsements for
collection or deposit in the ordinary course of business. The
terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning.
"Guarantor Note" shall mean the promissory note
executed by the Guarantor and delivered to the Company under the
Existing Credit Agreement to evidence the loan made by the
Company to the Guarantor to finance the Tender Offer.
"Guaranteed Obligations" shall have the meaning
assigned to such term in Section 6.01 hereof.
"Guarantor Preferred Stock" shall mean the preferred
stock of the Guarantor described in Part A of Schedule VI hereto.
"Hazardous Material" shall mean, collectively, (a) any
petroleum or petroleum products, explosives, radioactive
materials, asbestos that is or could become friable, urea
formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls in excess of 50 parts per
million ("PCB's"), (b) any chemicals or other materials or
substances that are now or hereafter become defined as or
included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes",
"restricted hazardous wastes", "toxic substances", "toxic
pollutants", "contaminants", "pollutants" or words of similar
import under any Environmental Law and (c) any other chemical or
other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any
Environmental Law.
"Indebtedness" shall mean, for any Person:
(a) obligations created, issued or incurred by such Person for
borrowed money (whether by loan, the issuance and sale of debt
securities or the sale of Property to another Person subject to
an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price of
Property or services, other than trade accounts payable (other
than for borrowed money) arising, and accrued expenses incurred,
in the ordinary course of business so long as such trade accounts
payable are payable within 90 days of the date the respective
goods are delivered or the respective services are rendered;
(c) Indebtedness of others secured by a Lien on the Property of
such Person, whether or not the respective indebtedness so
secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for
account of such Person; (e) Capital Lease Obligations of such
Person; (f) Indebtedness of others Guaranteed by such Person; and
(g) any Redeemable Capital Stock issued by the Guarantor or any
of its Subsidiaries after the Initial Borrowing Date; provided
that any Accrued Warrant Liabilities shall not constitute
"Indebtedness" hereunder. The amount of any Indebtedness of any
Person described in clause (c) above that is non-recourse to such
Person shall, for purposes of this Agreement, be deemed to be
equal to the lesser of (i) the aggregate unpaid amount of such
Indebtedness and (ii) the fair market value of the property or
asset encumbered, as determined by such Person in good faith.
The amount of any Indebtedness of any Person described in
clause (f) above shall, for purposes of this Agreement, be deemed
to be the aggregate amount of Indebtedness Guaranteed by such
Person (if a fixed amount) or the maximum reasonably anticipated
liability arising as a result of such Guarantee (if not a fixed
amount), determined by such Person in good faith.
"Indenture" shall mean the Indenture dated as of May 3,
1995, among the Company, the Guarantor and The Bank of New York,
as Trustee, pursuant to which the Senior Subordinated Notes were
issued.
"Ineligible Receivables" shall mean, as at any date,
the following:
(a) any Receivable not payable in Dollars, other than
Receivables in an aggregate amount not exceeding $10,000,000
that are payable in Canadian dollars;
(b) any Receivable (other than Receivables created in
connection with published promotional programs in the
ordinary course of business) that, at the date of issuance
of the billing statement therefor, was payable more than
60 days after the issuance of such billing statement;
(c) any Receivable payable by a Subsidiary or
Affiliate of the Company;
(d) any Receivable payable by an account debtor whose
principal place of business is located outside of the United
States of America or any of its possessions unless (1) such
Receivable is backed by U.S. Government insurance or a
letter of credit issued or confirmed by a bank organized
under the laws of the United States of America or a State
and having capital and surplus in excess of $500,000,000,
(2) such Receivable is payable by an account debtor whose
principal place of business is located in Canada to the
extent all such Receivables permitted by this clause (2) in
the aggregate do not exceed $10,000,000 or (3) such
Receivable is payable by an account debtor whose principal
place of business is located in a U.S. Territory or
Protectorate to the extent all such Receivables permitted by
this clause (3) in the aggregate do not exceed $5,000,000;
(e) any Receivable payable by an account debtor that
the Majority Revolving Credit Lenders (through the Agent)
have notified the Company, prior to the creation of such
Receivable, does not have a satisfactory credit standing (as
determined in the reasonable discretion of the Majority
Revolving Credit Lenders) or with respect to which,
subsequent to the creation of such Receivable, any event
described in Section 10(f) or (g) shall have occurred;
(f) any Receivable that remains unpaid for more than
90 days after the date of the issuance of the original
billing statement therefor;
(g) all Receivables payable by any account debtor if
more than 50% of the aggregate amount of the Receivables due
from such account debtor shall at the time have remained
unpaid for more than 90 days after the date of the issuance
of the original billing statements therefor;
(h) all Receivables payable by any account debtor
(other than BCOP or Boise) to the extent the Receivables
payable by such account debtor and its Subsidiaries and
Affiliates at the time exceed 10% of all Receivables then
payable to the Company;
(i) any Receivable as to which there is any unresolved
dispute with the respective account debtor (but only to the
extent of the amount thereof in dispute);
(j) any Receivable evidenced by an Instrument (as
defined in the Security Agreement or the Lagasse Guarantee
and Security Agreement);
(k) any Receivable representing an obligation for
goods sold on consignment, approval or a sale-or-return
basis or subject to any other repurchase or return
arrangement (other than return arrangements in the ordinary
course of the Company's business consistent with past
practices of the business of the Company), except to the
extent the Majority Revolving Credit Lenders (through the
Agent) shall have otherwise agreed in writing;
(l) any Receivable arising from the sale of general
full-line catalogues, except that such Receivables shall not
constitute "Ineligible Receivables" by reason of this
clause (l) for purposes of any determination of "Ineligible
Receivables" made as of the last day of September, October,
November, December, January or February;
(m) any Receivable payable by any Federal, state,
municipal or other governmental department, commission,
board, bureau, agency or instrumentality, including any
state or local public college or university;
(n) any Receivable payable by any employee of the
Guarantor or any of its Subsidiaries or Affiliates; and
(o) any Receivable payable on a cash on delivery
basis.
"Initial Borrowing Date" shall mean March 30, 1995, the
date on which the initial Loans were made under the Existing
Credit Agreement.
"Interest Coverage Ratio" shall mean, as at any date,
the ratio of (a) EBITDA for the Reporting Period as of such date
to (b) Interest Expense for such Reporting Period.
"Interest Expense" shall mean, for any period, the sum,
for the Guarantor and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP),
of the following: (a) all cash interest in respect of
Indebtedness (including, without limitation, the interest
component of any payments in respect of Capital Lease
Obligations) accrued during such period (whether or not actually
paid during such period) plus (b) the net amount payable (or
minus the net amount receivable) under Interest Rate Protection
Agreements during such period (whether or not actually paid or
received during such period).
"Interest Period" shall mean, with respect to any
Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or Converted from a Base Rate Loan or the
last day of the next preceding Interest Period for such Loan and
ending on the numerically corresponding day in the first, second,
third or sixth calendar month thereafter, as the Company may
select as provided in Section 4.05 hereof, except that each
Interest Period that commences on the last Business Day of a
calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent
calendar month. Notwithstanding the foregoing: (i) no Interest
Period for any Revolving Credit Loan may end after the Revolving
Credit Commitment Termination Date; (ii) no Interest Period for
any Term Loan of any Class may commence before and end after any
Principal Payment Date for the Loans of such Class unless, after
giving effect thereto, the aggregate principal amount of the Term
Loans of such Class having Interest Periods that end after such
Principal Payment Date shall be equal to or less than the
aggregate principal amount of the Term Loans of such Class
scheduled to be outstanding after giving effect to the payments
of principal required to be made on such Principal Payment Date;
(iii) each Interest Period that would otherwise end on a day that
is not a Business Day shall end on the next succeeding Business
Day (or, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day);
and (iv) notwithstanding clauses (i) and (ii) above, no Interest
Period shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Loan would otherwise be a
shorter period, such Loan shall not be available hereunder for
such period.
"Interest Rate Protection Agreement" shall mean, for
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and one or more financial
institutions providing for the transfer or mitigation of interest
risks either generally or under specific contingencies.
"Inventory" shall mean office products, office
furniture, computer accessories, catalogues, janitorial or
sanitary maintenance and other readily marketable goods
(including specialty products) of a type sold by the Company or a
Subsidiary in the ordinary course of business.
"Investment" shall mean, for any Person: (a) the
acquisition (whether for cash, Property, services or securities
or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of
any other Person or any agreement to make any such acquisition
(including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by
the Person entering into such sale but excluding any agreement
referred to above if the acquisition contemplated thereunder is
expressly conditioned upon the approval of the Lenders
hereunder); (b) the making of any deposit with, or advance, loan
or other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell
such Property to such Person), but excluding any such advance,
loan or extension of credit having a term not exceeding 90 days
arising in connection with the sale of inventory or supplies by
such Person in the ordinary course of business; (c) the entering
into of any Interest Rate Protection Agreement; or (d) the making
of any payment, on behalf of any other Person, with respect to
any obligation of such other Person.
"Issuing Bank" shall mean Chase, as the issuer of
Letters of Credit under Section 2.03 hereof, together with its
successors and assigns in such capacity.
"Lagasse Advance" shall have the meaning assigned to
such term in Section 9.19(a) hereof.
"Lagasse Guarantee and Security Agreement" shall mean
the Guarantee and Security Agreement, substantially in the form
of the Guarantee and Security Agreement attached hereto as
Exhibit B-2, between Lagasse and the Agent, as the same may be
modified and supplemented and in effect from time to time.
"Letter of Credit" shall have the meaning assigned to
such term in Section 2.03 hereof.
"Letter of Credit Documents" shall mean, with respect
to any Letter of Credit, collectively, any application therefor
and any other agreements, instruments, guarantees or other
documents (whether general in application or applicable only to
such Letter of Credit) governing or providing for (a) the rights
and obligations of the parties concerned or at risk with respect
to such Letter of Credit or (b) any collateral security for any
of such obligations, each as the same may be modified and
supplemented and in effect from time to time.
"Letter of Credit Fee Rate" shall mean a rate per annum
equal to 2.50%; provided that (i) the Letter of Credit Fee Rate
for any period from and including the date on which the Company
shall have delivered to the Agent a certificate pursuant to
clause (iii) of the last paragraph of Section 9.01 hereof,
demonstrating in reasonable detail (based upon financial
statements for the fiscal period of the Guarantor most recently
ended that have been delivered to the Lenders pursuant to Section
9.01(b) or (c) hereof or, in connection with the Lagasse
Acquisition, on the Effective Date) that the Pricing Leverage
Ratio, as of the end of the respective quarterly fiscal period or
fiscal year, is within one of the ranges set forth below to but
excluding the date of delivery of the next such certificate,
shall equal the percentage set forth below:
Pricing
Leverage Ratio Rate
Greater than 4.5 to 1 2.50%
Less than or equal to 4.5 to 1
but greater than 4.0 to 1 2.25%
Less than or equal to 4.0 to 1
but greater than 3.5 to 1 2.00%
Less than or equal to 3.5 to 1
but greater than 3.0 to 1 1.75%
Less than or equal to 3.0 to 1 1.50%
; (ii) the "Letter of Credit Fee Rate", during any period when an
Event of Default or Default in delivery of the certificate
pursuant to clause (iii) of the last paragraph of Section 9.01
hereof shall have occurred and be continuing, shall be determined
without reference to the immediately preceding proviso; and (iii)
the Letter of Credit Fee Rate for any Letter of Credit arising
out of the purchase of goods and requiring the presentation of a
bill of lading or other transportation document of title shall be
the rate per annum set forth above minus 1.00%.
"Letter of Credit Interest" shall mean, for each
Revolving Credit Lender, such Lender's participation interest
(or, in the case of the Issuing Bank, the Issuing Bank's retained
interest) in the Issuing Bank's liability under Letters of Credit
and such Lender's rights and interests in Reimbursement
Obligations and fees, interest and other amounts payable in
connection with Letters of Credit and Reimbursement Obligations.
"Letter of Credit Liability" shall mean, without
duplication, at any time and in respect of any Letter of Credit,
the sum of (a) the undrawn amount of such Letter of Credit plus
(b) the aggregate unpaid principal amount of all Reimbursement
Obligations of the Company at such time due and payable in
respect of all drawings made under such Letter of Credit. For
purposes of this Agreement, a Revolving Credit Lender (other than
the Issuing Bank) shall be deemed to hold a Letter of Credit
Liability in an amount equal to its participation interest in the
related Letter of Credit under Section 2.03 hereof, and the
Issuing Bank shall be deemed to hold a Letter of Credit Liability
in an amount equal to its retained interest in the related Letter
of Credit after giving effect to the acquisition by the Revolving
Credit Lenders other than the Issuing Bank of their participation
interests under said Section 2.03.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such Property. For purposes of this
Agreement and the other Basic Documents, a Person shall be deemed
to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement (other than a lease evidencing an Operating
Lease Obligation) relating to such Property.
"Loans" shall mean the Revolving Credit Loans, the
Tranche A Term Loans, the Tranche B Term Loans and the Swingline
Loans.
"Majority Lenders" shall mean Lenders holding at least
51% of the sum of (a) the aggregate unused Commitments, (b) the
aggregate unpaid principal amount of the Loans (other than the
Swingline Loans) and (c) the aggregate amount of all Letter of
Credit Liabilities.
"Majority Revolving Credit Lenders" shall mean
Revolving Credit Lenders holding at least 51% of the aggregate
amount of the Revolving Credit Commitments or, if the Revolving
Credit Commitments shall have terminated, Lenders holding at
least 51% of the sum of (a) the aggregate unpaid principal amount
of the Revolving Credit Loans plus (b) the aggregate amount of
all Letter of Credit Liabilities.
"Majority Term Loan Lenders" shall mean Majority
Tranche A Term Loan Lenders and Majority Tranche B Term Loan
Lenders.
"Majority Tranche A Term Loan Lenders" shall mean
Tranche A Term Loan Lenders holding at least 51% of the aggregate
outstanding principal amount of the Tranche A Term Loans or, if
the Tranche A Term Loans shall not have been made, at least 51%
of the Tranche A Term Loan Commitments.
"Majority Tranche B Term Loan Lenders" shall mean
Tranche B Term Loan Lenders holding at least 51% of the aggregate
outstanding principal amount of the Tranche B Term Loans or, if
the Tranche B Term Loans shall not have been made, at least 51%
of the Tranche B Term Loan Commitments.
"Margin Stock" shall mean "margin stock" within the
meaning of Regulations G, U and X.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial
condition, prospects, liabilities or capitalization of the
Guarantor and its Subsidiaries taken as a whole or the Company
and its Subsidiaries taken as a whole (b) the ability of any
Obligor to perform its obligations under any of the Basic
Documents to which it is a party, (c) the validity or
enforceability of any of the Basic Documents, (d) the rights and
remedies of the Lenders and the Agent under any of the Basic
Documents, (e) the consummation of the Lagasse Acquisition or the
other transactions contemplated hereby or (f) the timely payment
of the principal of or interest on the Loans or the Reimbursement
Obligations or other amounts payable in connection therewith.
"Merger Agreement" shall mean the Agreement and Plan of
Merger dated as of February 13, 1995 between the Guarantor and
Associated Holdings.
"Mergers" shall mean the merger of Associated Holdings
with and into the Guarantor and the merger of Associated
Stationers, Inc. with and into the Company, each of which was
effected on March 30, 1995.
"Mortgages" shall mean, collectively, one or more
instruments of Mortgage, Assignment of Rents, Security Agreement
and Fixture Filing or Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing executed by the Company in
favor of the Agent for the benefit of the Agent and the Lenders
(or, in the case of a Deed of Trust, to the Deed of Trust trustee
in favor of the Agent for the benefit of the Lenders),
substantially in the form of Exhibit D hereto (conformed to local
lending practices in the jurisdiction in which the relevant real
Property is located including, without limitation, additional
remedies available to lenders in such jurisdiction and, if
applicable, conformed to the extent necessary to secure a
tenant's interest in a ground lease) and covering the respective
owned and leasehold real Properties identified under the heading
"Mortgages" in Schedule IV hereto, as said instruments of
Mortgage, Assignment of Rents, Security Agreement and Fixture
Filing and Deed of Trust, Assignment of Rents, Security Agreement
and Fixture Filing shall be modified, amended, extended and
supplemented and in effect from time to time.
"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Guarantor or the Company or any
ERISA Affiliate and that is covered by Title IV of ERISA.
"Net Available Proceeds" shall mean:
(i) in the case of any Disposition, the amount of Net
Cash Payments received in connection with such Disposition;
(ii) in the case of any Equity Issuance, the aggregate
amount of all cash received by the Guarantor and its
Subsidiaries in respect of such Equity Issuance net of
reasonable expenses incurred in connection therewith
(including, without limitation, any underwriting, brokerage
or other customary selling commissions, all due diligence
costs or expenses paid for, or reimbursed by the Guarantor
or any of its Subsidiaries, attorneys fees and expenses paid
for or reimbursed by the Guarantor or any of its
Subsidiaries and other direct costs associated therewith);
and
(iii) in the case of any Casualty Event, the aggregate
amount of proceeds of insurance, condemnation awards and
other compensation received by the Company and its
Subsidiaries in respect of such Casualty Event net of
(A) reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith (including, without
limitation, any legal, accounting, appraisal or expert fees
or expenses paid for by the Company or its Subsidiaries and
other direct costs associated therewith), (B) contractually
required repayments of Indebtedness to the extent secured by
a Lien on such Property, (C) any income and transfer taxes
payable by the Company or any of its Subsidiaries in respect
of such Casualty Event and (D) other payments contractually
required to be paid to lessors, sublessors, lessees and
sublessees and other holders (other than Affiliates) of
interests in the Property subject to such Casualty Event.
"Net Cash Payments" shall mean, with respect to any
Disposition, the aggregate amount of all cash payments (including
any cash payments with respect to non-cash consideration as
received) received by the Guarantor and its Subsidiaries directly
or indirectly in connection with such Disposition; provided that
(a) Net Cash Payments shall be net of (i) the amount of any
legal, title and recording tax expenses, commissions and other
fees and expenses paid by the Guarantor and its Subsidiaries in
connection with such Disposition, (ii) any Federal, state and
local income or other taxes estimated to be payable by the
Guarantor and its Subsidiaries as a result of such Disposition
(but only to the extent that such estimated taxes (other than
income taxes) are in fact paid to the relevant Federal, state or
local governmental authority within three months of the date of
such Disposition), (iii) brokerage or other customary selling
commissions and (iv) expenses incurred in preparing such asset
for sale and (b) Net Cash Payments shall be net of any repayments
by the Guarantor or any of its Subsidiaries of Indebtedness
(other than Indebtedness to the Lenders hereunder) to the extent
that (i) such Indebtedness is secured by a Lien on the Property
that is the subject of such Disposition and (ii) the transferee
of (or holder of a Lien on) such Property requires that such
Indebtedness be repaid as a condition to the purchase of such
Property.
"Net Income" shall mean, for any period, the
consolidated net income of the Guarantor and its Subsidiaries
determined in accordance with GAAP.
"Net Worth" shall mean, as at any date, the
consolidated net worth of the Guarantor and its Subsidiaries
(determined in accordance with GAAP) minus any write-up in the
book value of assets resulting from a revaluation thereof except
any such writeup relating to the Mergers plus any restructuring
charges incurred in connection with the Acquisition not exceeding
$15,000,000 (pre-tax) in the aggregate plus the aggregate book
value of all Guarantor Preferred Stock described in Schedule VI
hereto plus the aggregate book value of all warrants described in
Schedule VI hereto.
"New Inventory" shall mean, at any time, any Inventory
that was offered by the Company for sale for the first time
within the preceding 12 months.
"Part A Property" shall mean any of the Property
described in Part A of Schedule IV hereto under the heading
"Dispositions".
"Part B Property" shall mean any of the Property
described in Part B of Schedule IV hereto under the heading
"Dispositions".
"PBGC" shall mean the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Permitted Acquisition" shall mean any acquisition
after the date hereof by either Obligor of a Person, line of
business or division engaged in the same or substantially similar
line of business as the Company and its Subsidiaries is engaged
in on the date hereof, the purchase price of which acquisition,
together with the purchase price of all other Permitted
Acquisitions, does not exceed $50,000,000; provided that no such
acquisition effected pursuant to a tender offer under Section
14(d) of the Exchange Act shall qualify as a Permitted
Acquisition unless such tender offer has been authorized by the
Board of Directors of the Person to be acquired.
"Permitted Investments" shall mean: (a) direct
obligations of the United States of America, or of any agency
thereof, or obligations guaranteed as to principal and interest
by the United States of America, or of any agency thereof, in
either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any
bank or trust company organized under the laws of the United
States of America or any state thereof and having capital,
surplus and undivided profits of at least $500,000,000, maturing
not more than 90 days from the date of acquisition thereof; and
(c) commercial paper rated A-1 or better or P-1 by Standard &
Poor's Corporation or Moody's Investors Services, Inc.,
respectively, maturing not more than 90 days from the date of
acquisition thereof; in each case so long as the same (x) provide
for the payment of principal and interest (and not principal
alone or interest alone) and (y) are not subject to any
contingency regarding the payment of principal or interest.
"Person" shall mean any individual, corporation,
company, voluntary association, partnership, joint venture,
limited liability company, trust, unincorporated organization or
government (or any agency, instrumentality or political
subdivision thereof).
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Pledge Agreement" shall mean an Amended and Restated
Pledge Agreement, substantially in the form of Exhibit C hereto,
between the Guarantor and the Agent, as the same shall be
modified and supplemented and in effect from time to time.
"Post-Default Rate" shall mean, in respect of any
principal of any Loan, any Reimbursement Obligation or any other
amount under this Agreement or any other Basic Document that is
not paid when due (whether at stated maturity, by acceleration,
by optional or mandatory prepayment or otherwise), a rate per
annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to
(a) in the case of any principal of any Loan or any interest
thereon, 2% plus the Applicable Margin with respect to such Loan
plus the Base Rate as in effect from time to time or (b) in the
case of any other such amount, 4.00% plus the Base Rate as in
effect from time to time (provided that, if the amount so in
default is principal of a Eurodollar Loan and the due date
thereof is a day other than the last day of the Interest Period
therefor, the "Post-Default Rate" for such principal shall be,
for the period from and including such due date to but excluding
the last day of such Interest Period, 2% plus the interest rate
for such Loan as provided in Section 3.02(b) hereof and,
thereafter, the rate provided for above in this definition).
"Pricing Leverage Ratio" shall mean, as at any date,
the ratio of (a) the aggregate Indebtedness of the Guarantor and
its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) as of such date to
(b) EBITDA for the Reporting Period as of such date; provided
that Indebtedness (as used in this definition of "Pricing
Leverage Ratio") shall not include any undrawn amount under any
letter of credit for the account of the Company or its
Subsidiaries; and provided, further, that (i) upon the
consummation of any Permitted Acquisition of a Person (if the
Person, line of business or division so acquired has audited
financial statements with respect to the applicable Reporting
Period or, if such audited financial statements are not available
for the entire Reporting Period, the Guarantor has delivered to
the Agent an income statement and cash flow statement for such
Person, line of business or division for such Reporting Period
(which may be based in part on any audited financial statements
available for part of such Reporting Period) accompanied by a
certificate of a senior financial officer of the Guarantor
stating that such officer has reviewed the historical performance
of such Person, line of business or division and believes that
such statements fairly represent in all material respects the
historical performance of such entity) or (ii) the consummation
of the Lagasse Acquisition, the calculation of the Pricing
Leverage Ratio (both with respect to EBITDA and Indebtedness)
shall be calculated as if such Permitted Acquisition or the
Lagasse Acquisition, as the case may be, had occurred, and any
Indebtedness incurred in connection therewith had been incurred,
on the first day of the Reporting Period for the date of such
Permitted Acquisition or the Lagasse Acquisition, as the case may
be.
"Primary Offering" shall mean the initial issuance
prior to September 30, 1997 by the Guarantor of additional shares
of its common stock.
"Prime Rate" shall mean the rate of interest from time
to time announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of
Chase, located on the date hereof at 270 Park Avenue, New York,
New York 10017.
"Principal Payment Date" shall mean each Quarterly Date
on which a principal payment in respect of the Term Loans is
required to be made pursuant to Section 3.01 hereof.
"Pro Forma Effect" shall mean, for any event, to
calculate the operating results for the Reporting Period in
respect of the date of such event as if such event had occurred
on the first day of such Reporting Period after giving effect to
any changes in the capital structure or Indebtedness (and
otherwise based upon the actual operating results for such
Reporting Period).
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"Quarterly Dates" shall mean March 31, June 30,
September 30 and December 31 of each year, beginning December 31,
1996; provided that, if any such date is not a Business Day, the
relevant Quarterly Date shall be the next succeeding Business
Day.
"Receivable Adjustments" shall mean (a) any current
liabilities of the Company arising because of any credits,
rebates or offsets owed to any customer, (b) any commissions
payable to third parties and (c) the aggregate amount of late
charges included in the Company's Receivables.
"Receivables" shall mean, as at any date, the unpaid
portion of the obligation, as stated on the respective billing
statement, of a customer of the Company or Lagasse in respect of
Inventory sold and shipped by (or services performed by) the
Company or Lagasse, as the case may be, to such customer.
"Redeemable Capital Stock" shall mean, with respect to
any Person, any capital stock of such Person that, either by its
terms or by the terms of any security into which it is
convertible or exchangeable or otherwise, is or upon the
happening of an event or passage of time would be, required to be
redeemed or is redeemable at the option of the holder thereof
prior to April 1, 2002, or is exchangeable for debt securities at
any time at the option of the holder thereof.
"Reference Banks" shall mean Chase, The First National
Bank of Chicago and PNC Bank, National Association (or their
respective Applicable Lending Offices, as the case may be).
"Registered Holder" shall have the meaning assigned to
such term in Section 5.07(a)(ii) hereof.
"Registered Loan" shall have the meaning assigned to
such term in Section 2.08(e) hereof.
"Regulations A, D, G, U and X" shall mean,
respectively, Regulations A, D, G, U and X of the Board of
Governors of the Federal Reserve System (or any successor), as
the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change" shall mean, with respect to any
Lender, any change after the date hereof in applicable Federal,
state or foreign law or regulations (including, without
limitation, Regulation D) or the adoption or making after such
date of any interpretation, directive or request applying to a
class of banks including such Lender of or under any Federal,
state or foreign law or regulations (whether or not having the
force of law and whether or not failure to comply therewith would
be unlawful) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"Reimbursement Obligations" shall mean, at any time,
the obligations of the Company then outstanding, or that may
thereafter arise in respect of all Letters of Credit then
outstanding, to reimburse amounts paid by the Issuing Bank in
respect of any drawings under a Letter of Credit.
"Release" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor
environment.
"Reporting Period" shall mean, for any date, the period
of four consecutive fiscal quarters of the Guarantor ending (at
the close of business) on or most recently ended prior to such
date.
"Reserve Requirement" shall mean, for any Interest
Period for any Eurodollar Loan, the average maximum rate at which
reserves (including, without limitation, any marginal,
supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of
the Federal Reserve System in New York City with deposits
exceeding one billion Dollars against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the
effect of the foregoing, the Reserve Requirement shall include
any other reserves required to be maintained by such member banks
by reason of any Regulatory Change with respect to (i) any
category of liabilities that includes deposits by reference to
which the Eurodollar Base Rate is to be determined as provided in
the definition of "Eurodollar Base Rate" in this Section 1.01 or
(ii) any category of extensions of credit or other assets that
includes Eurodollar Loans.
"Responsible Officer" shall mean, with respect to any
Person, the Treasurer, Chief Financial Officer and Controller of
such Person and such other officers of the relevant Person as the
Agent may agree.
"Revolving Credit Commitment" shall mean, for each
Revolving Credit Lender, the obligation of such Lender to make
Revolving Credit Loans in an aggregate principal amount at any
one time outstanding up to but not exceeding the amount set forth
opposite the name of such Lender on the signature pages hereof
under the caption "Revolving Credit Commitment" (as the same may
be reduced from time to time pursuant to Section 2.04 hereof).
The aggregate principal amount of the Revolving Credit
Commitments under this Agreement on the date hereof is
$325,000,000.
"Revolving Credit Commitment Percentage" shall mean,
with respect to any Revolving Credit Lender, the ratio of (a) the
amount of the Revolving Credit Commitment of such Lender to
(b) the aggregate amount of the Revolving Credit Commitments of
all of the Lenders.
"Revolving Credit Commitment Termination Date" shall
mean October 31, 2001.
"Revolving Credit Lenders" shall mean (a) on the date
hereof, the Lenders having Revolving Credit Commitments on the
signature pages hereof and (b) thereafter, the Lenders from time
to time holding Revolving Credit Loans and Revolving Credit
Commitments after giving effect to any assignments thereof
permitted by Section 12.06(b) hereof.
"Revolving Credit Loans" shall mean the loans provided
for in Section 2.01(a) hereof, which may be Base Rate Loans
and/or Eurodollar Loans.
"Security Agreement" shall mean an Amended and Restated
Security Agreement, substantially in the form of Exhibit B-1
hereto, between the Company and the Agent, as the same shall be
modified and supplemented and in effect from time to time.
"Security Documents" shall mean, collectively, the
Security Agreement, the Lagasse Guarantee and Security Agreement,
the Mortgages and the Pledge Agreement.
"Senior Subordinated Debt Documents" shall mean the
Senior Subordinated Notes and the Indenture, as the same shall,
subject to Section 9.20 hereof, be modified and supplemented and
in effect from time to time.
"Senior Subordinated Notes" shall mean the 12-3/4%
Senior Subordinated Notes due May 1, 2005 issued by the Company
pursuant to the Indenture.
"Sponsor Management Fees" shall have the meaning
assigned to such term in Section 9.22 hereof.
"Subordinated Indebtedness" shall mean, collectively,
(a) Senior Subordinated Notes and (b) other Indebtedness (i) for
which the Company is directly and primarily liable, (ii) in
respect of which none of its Subsidiaries is contingently or
otherwise obligated and (iii) that is subordinated to the
obligations of the Company to pay principal of and interest on
the Loans and Reimbursement Obligations hereunder on terms, and
pursuant to documentation containing other terms (including
interest, amortization, covenants and events of default), in form
and substance satisfactory to the Majority Lenders.
"Subsidiary" shall mean, with respect to any Person,
any corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of
the board of directors or other persons performing similar
functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
"Supermajority Lenders" shall have the meaning assigned
to such term in Section 12.04 hereof.
"Swingline Commitment" shall mean the obligation of the
Swingline Lender to make Swingline Loans pursuant to Section
2.01(d) hereof in an aggregate amount at any one time outstanding
up to but not exceeding $20,000,000 (as the same may be reduced
at any time or from time to time pursuant to Section 2.04 or 2.10
hereof).
"Swingline Loans" shall mean the loans provided for by
Section 2.01(d) hereof.
"Swingline Rate" shall mean, for any day, the Base Rate
in effect for such date. Each change in any interest rate
provided for herein based upon the Swingline Rate resulting from
a change to the Swingline Rate shall take effect at the time of
such change in the Swingline Rate.
"Tax Sharing Agreement" shall have the meaning assigned
to such term in Section 9.23 hereof.
"Tender Offer" shall mean the offer by the Guarantor to
purchase for cash up to 17,201,839 United Shares pursuant to the
Tender Offer Documents (as defined in the Existing Credit
Agreement).
"Term Loan Commitment Termination Date" shall mean
November 15, 1996.
"Term Loan Commitments" shall mean the Tranche A Term
Loan Commitments and the Tranche B Term Loan Commitments.
"Term Loan Lenders" shall mean Tranche A Term Loan
Lenders and Tranche B Term Loan Lenders.
"Term Loans" shall mean the Tranche A Term Loans and
the Tranche B Term Loans.
"Tranche A Term Loan Commitment" shall mean, for each
Tranche A Term Loan Lender, the obligation of such Lender to make
a Tranche A Term Loan in the amount set forth opposite the name
of such Lender on the signature pages hereof under the caption
"Tranche A Term Loan Commitment" (as the same may be reduced from
time to time pursuant to Section 2.04 hereof). The aggregate
principal amount of the Tranche A Term Loan Commitments under
this Agreement on the date hereof is $150,000,000.
"Tranche A Term Loan Lenders" shall mean (a) on the
date hereof, the Lenders having Tranche A Term Loan Commitments
on the signature pages hereof and (b) thereafter, the Lenders
from time to time holding Tranche A Term Loans or Tranche A Term
Loan Commitments after giving effect to any assignments thereof
permitted by Section 12.06(b) hereof.
"Tranche A Term Loans" shall mean the loans provided
for by Section 2.01(b) hereof, which may be Base Rate Loans
and/or Eurodollar Loans.
"Tranche B Term Loan Commitment" shall mean, for each
Tranche B Term Loan Lender, the obligation of such Lender to make
a Tranche B Term Loan in the amount set forth opposite the name
of such Lender on the signature pages hereof under the caption
"Tranche B Term Loan Commitment" (as the same may be reduced from
time to time pursuant to Section 2.04 hereof). The aggregate
principal amount of the Tranche B Term Loan Commitments under
this Agreement on the date hereof is $65,000,000.
"Tranche B Term Loan Lenders" shall mean (a) on the
date hereof, the Lenders having Tranche B Term Loan Commitments
on the signature pages hereof and (b) thereafter, the Lenders
from time to time holding Tranche B Term Loans or Tranche B Term
Loan Commitments after giving effect to any assignments thereof
permitted by Section 12.06(b) hereof.
"Tranche B Term Loans" shall mean the loans provided
for by Section 2.01(c) hereof, which may be Base Rate Loans
and/or Eurodollar Loans.
"Transaction Documents" shall mean the Basic Documents
and the Purchase Agreement.
"Type" shall have the meaning assigned to such term in
Section 1.03 hereof.
"U.S. Person" shall mean a citizen or resident of the
United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United
States of America or any State thereof, or any estate or trust
the income of which is subject to Federal income taxation
regardless of its source.
"U.S. Taxes" shall mean any present or future tax,
assessment or other charge or levy imposed by or on behalf of the
United States of America or any taxing authority thereof.
"Warrant Agreement" shall mean the Warrant Agreement
dated as of January 31, 1992 among the Guarantor and the
Investors party thereto, as amended by Amendment No. 1 thereto,
dated as of October 27, 1992, and Amendment No. 2 thereto, dated
as of March 30, 1995, as the same shall be further modified and
supplemented and in effect from time to time.
"Wholly-Owned Subsidiary" shall mean, with respect to
any Person, any corporation, partnership or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
one or more Wholly-Owned Subsidiaries of such Person or by such
Person and one or more Wholly-Owned Subsidiaries of such Person.
"Wingate" shall mean (i) Wingate Partners, L.P.,
(ii) Wingate Partners II, L.P. and (iii) any other Person so long
as, in each such case, one of Thomas W. Sturgess, Frederic B.
Hegi, Jr. and James T. Callier, Jr. have the power, directly or
indirectly, to vote or direct the voting of all securities of the
Guarantor held by such entity.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial
matters required to be delivered to the Lenders hereunder shall
(unless otherwise disclosed to the Lenders in writing at the time
of delivery thereof in the manner described in subsection (b)
below) be prepared, in accordance with generally accepted
accounting principles applied on a basis consistent with those
used in the preparation of the latest financial statements
furnished to the Lenders hereunder (which, prior to the delivery
of the first financial statements under Section 9.01 hereof,
shall mean the audited consolidated financial statements of the
Guarantor as at December 31, 1995 referred to in
Section 8.02(a)(ii) hereof except for immaterial variations
thereto). All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise
expressly provided herein) be made by application of generally
accepted accounting principles applied on a basis consistent with
those used in the preparation of the latest annual or quarterly
financial statements furnished to the Lenders pursuant to
Section 9.01 hereof (or, prior to the delivery of the first
financial statements under Section 9.01 hereof, used in the
preparation of the audited consolidated financial statements of
the Guarantor as at December 31, 1995 referred to in
Section 8.02(a)(ii) hereof) unless (i) the Company shall have
objected to determining such compliance on such basis at the time
of delivery of such financial statements or (ii) the Majority
Lenders shall so object in writing within 30 days after delivery
of such financial statements, in either of which events such
calculations shall be made on a basis consistent with those used
in the preparation of the latest financial statements as to which
such objection shall not have been made (which, if objection is
made in respect of the first financial statements delivered under
Section 9.01 hereof, shall mean the audited consolidated
financial statements of the Guarantor as at December 31, 1995
referred to in Section 8.02(a)(ii) hereof). Notwithstanding the
foregoing, all financial statements delivered to the Lenders
hereunder shall be prepared utilizing the last-in-first-out basis
of inventory valuation but all calculations made for the purpose
of determining compliance with this Agreement shall be prepared
utilizing the first-in-first-out basis of inventory valuation.
(b) The Company shall deliver to the Lenders at the
same time as the delivery of any annual or quarterly financial
statement under Section 9.01 hereof (i) a description in
reasonable detail of any material variation between the
application of accounting principles employed in the preparation
of such statement and the application of accounting principles
employed in the preparation of the next preceding annual or
quarterly financial statements as to which no objection has been
made in accordance with the last sentence of subsection (a) above
and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) To enable the ready and consistent determination
of compliance with the covenants set forth in Section 9 hereof,
the Company will not change the last day of its fiscal year from
December 31, or the last days of the first three fiscal quarters
in each of its fiscal years from March 31, June 30 and
September 30 of each year, respectively.
1.03 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan
(or of a Commitment to make a Loan) refers to whether such Loan
is a Revolving Credit Loan, a Tranche A Term Loan, a Tranche B
Term Loan or a Swingline Loan, each of which constitutes a Class.
The "Type" of a Loan refers to whether such Loan is a Base Rate
Loan or a Eurodollar Loan, each of which constitutes a Type.
Loans may be identified by both Class and Type.
Section 2. Commitments, Loans and Prepayments.
2.01 Loans.
(a) Revolving Credit Loans. Each Revolving Credit
Lender severally agrees, on the terms and conditions of this
Agreement, to make loans to the Company in Dollars during the
period from and including the Effective Date to but not including
the Revolving Credit Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not
exceeding the amount of the Revolving Credit Commitment of such
Lender as in effect from time to time; provided that in no event
shall the aggregate outstanding principal amount of all Revolving
Credit Loans, together with the aggregate outstanding principal
amount of all Swingline Loans and the aggregate amount of all
Letter of Credit Liabilities, exceed the lesser of (i) the
Borrowing Base and (ii) the aggregate amount of the Revolving
Credit Commitments as in effect from time to time. Subject to
the terms and conditions of this Agreement, during such period
the Company may borrow, repay and reborrow the amount of the
Revolving Credit Commitments by means of Base Rate Loans and
Eurodollar Loans and may Convert Revolving Credit Loans of one
Type into Revolving Credit Loans of another Type (as provided in
Section 2.09 hereof) or Continue Revolving Credit Loans of one
Type as Revolving Credit Loans of the same Type (as provided in
Section 2.09 hereof).
(b) Tranche A Term Loans. Each Tranche A Term Loan
Lender severally agrees, on the terms and conditions of this
Agreement, to make a term loan to the Company in Dollars on the
Effective Date in an aggregate principal amount up to but not
exceeding the amount of the Tranche A Term Loan Commitment of
such Lender. Thereafter the Company may Convert Tranche A Term
Loans of one Type into Tranche A Term Loans of another Type (as
provided in Section 2.09 hereof) or Continue Tranche A Term Loans
of one Type as Tranche A Term Loans of the same Type (as provided
in Section 2.09 hereof).
(c) Tranche B Term Loans. Each Tranche B Term Loan
Lender severally agrees, on the terms and conditions of this
Agreement, to make a term loan to the Company in Dollars on the
Effective Date in an aggregate principal amount up to but not
exceeding the amount of the Tranche B Term Loan Commitment of
such Lender. Thereafter the Company may Convert Tranche B Term
Loans of one Type into Tranche B Term Loans of another Type (as
provided in Section 2.09 hereof) or Continue Tranche B Term Loans
of one Type as Tranche B Term Loans of the same Type (as provided
in Section 2.09 hereof).
(d) Swingline Loans. The Swingline Lender agrees, on
the terms and conditions of this Agreement, to make loans
("Swingline Loans") to the Company during the period from the
date hereof to but excluding the date five Business Days prior to
the Revolving Credit Commitment Termination Date in an aggregate
amount at any one time outstanding up to but not exceeding its
Swingline Commitment; provided that the aggregate principal
amount of all Revolving Credit Loans and Swingline Loans together
with all Letter of Credit Liabilities shall not at any time
outstanding exceed the lesser of (i) the Borrowing Base and (ii)
the aggregate amount of the Revolving Credit Commitments, as in
effect from time to time. Subject to the terms of this
Agreement, the Company may borrow, repay and reborrow the amount
of the Swingline Commitment by means of Loans that bear interest
at the Swingline Rate; provided that no Swingline Loan may be
borrowed to repay an outstanding Swingline Loan.
(e) Limit on Eurodollar Loans. No more than
seven separate Interest Periods in respect of Eurodollar Loans of
any Class from each Lender may be outstanding at any one time.
(f) Continuation of Loans under Existing Credit
Agreement. Notwithstanding anything herein to the contrary, any
"Loan" (as defined in the Existing Credit Agreement) that is
outstanding on the Effective Date and that is held by a "Lender"
(as so defined) under the Existing Credit Agreement that is also
a Lender hereunder shall be automatically, and without any
further action on the part of any Person, converted to a Loan of
the same Type hereunder of such Lender in the principal amount
and bearing interest at the rate provided for therein, and for
(if applicable) an Interest Period hereunder equal to the portion
of the "Interest Period" (as so defined) under the Existing
Credit Agreement remaining after the Effective Date; accrued
interest in respect of each such Loan shall be paid on the date
on which such interest would have been payable under the Existing
Credit Agreement had such Loan remained outstanding thereunder.
No amounts shall be payable under Section 5.05 of the Existing
Credit Agreement in respect of any Eurodollar Loans so converted.
The outstanding Loans of each "Lender" under the Existing Credit
Agreement shall be reallocated among Classes hereunder so that
such Loans shall first become Term Loans under this Agreement up
to such Lender's Term Loan Commitment hereunder, and then, to the
extent the aggregate principal amount of such Loans exceeds such
Lender's Term Loan Commitment hereunder, Revolving Credit Loans.
The principal of, interest on and all other amounts owing in
respect of any outstanding "Loan" (as so defined) under the
Existing Credit Agreement that is held by a "Lender" thereunder
that is not also a Lender hereunder, or that is held by a
"Lender" thereunder in excess of such Lender's pro rata share of
outstanding Loans of such Class hereunder, shall be repaid in
full on the Effective Date as provided in Section 7.01 hereof.
2.02 Borrowings.
(a) General. The Company shall give the Agent (which
shall promptly notify the relevant Lenders) or, in the case of
Swingline Loans, the Swingline Lender, notice of each borrowing
hereunder as provided in Section 4.05 hereof, which notice may be
delivered by telephone if followed promptly by notice in writing.
Not later than 2:00 p.m. New York time on the date specified for
each borrowing hereunder, each relevant Lender shall make
available the amount of the Loan or Loans to be made by it on
such date to the Agent, at any account designated by the Agent
with Chase at the Principal Office, in immediately available
funds, for account of the Company. The amount so received by the
Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Company by depositing the
same, in immediately available funds, in an account of the
Company maintained with Chase at the Principal Office designated
by the Company or by repaying any then outstanding Swingline
Loan, as set forth in Section 2.02(b).
(b) Borrowings to Repay Swingline Loans. Unless the
Company has already given a notice of borrowing of Revolving
Credit Loans to repay a Swingline Loan, if any Swingline Loan
remains outstanding, at any time until the unpaid principal
amount of such Swingline Loan shall have been paid in full, the
Swingline Lender may, and the Company hereby irrevocably
authorizes and empowers (which power is coupled with an interest)
the Swingline Lender to, deliver, on behalf of the Company, to
the Agent under Section 2.02(a) hereof a notice of borrowing of
Revolving Credit Loans that are Base Rate Loans in an amount
equal to the then unpaid principal amount of such Swingline Loan.
In the event that the power of the Swingline Lender to give such
notice of borrowing on behalf of the Company is terminated for
any reason whatsoever (including, without limitation, a
termination resulting from the occurrence of an event specified
in clause (f) or (g) of Section 10 hereof with respect to the
Company), or the Swingline Lender is otherwise precluded for any
reason whatsoever from giving a notice of borrowing on behalf of
the Company as provided in the preceding sentence, each Lender
shall, upon notice from the Swingline Lender, promptly purchase
from the Swingline Lender a participation in (or, if and to the
extent specified by the Swingline Lender, an assignment of) such
Swingline Loan in the amount of the Base Rate Loan it would have
been obligated to make pursuant to such notice of borrowing.
Each Lender shall, not later than 4:00 p.m. New York time on the
Business Day on which such notice is given (if such notice is
given by 12:00 noon New York time) or 11:00 a.m. New York time on
the next succeeding Business Day (if such notice is given after
12:00 p.m., but before 5:00 p.m., New York time), make available
the amount of the Base Rate Loan to be made by it (or the amount
of the participation or assignment to be purchased by it, as the
case may be) to the Agent at the account specified in Section
2.02(a) hereof and the amount so received by the Agent shall
promptly be made available to the Swingline Lender by remitting
the same, in immediately available funds, to the Swingline
Lender. Promptly following its receipt of any payment in respect
of such Swingline Loans, the Swingline Lender shall pay to each
Lender that has acquired a participation in such Swingline Loan
such Lender's proportionate share of such payment. Anything in
this Agreement to the contrary notwithstanding (including,
without limitation, in Section 7.02 hereof), the obligation of
each Lender to make its Base Rate Loan (or purchase its
participation in or assignment of such Swingline Loan, as the
case may be) pursuant to this Section 2.02(b) is unconditional
under any and all circumstances whatsoever and shall not be
subject to set-off, counterclaim or defense to payment that such
Lender may have or have had against the Company, the Guarantor,
the Agent, the Swingline Lender or any other Lender and, without
limiting any of the foregoing, shall be unconditional
irrespective of (i) the occurrence of any Default, (ii) the
financial condition of the Company, any Subsidiary, the
Guarantor, the Agent, the Swingline Lender or any other Lender or
(iii) the termination or cancellation of the Commitments;
provided that no Lender shall be obligated to make any such Base
Rate Loan (or to purchase any such participation or direct
interest in the Swingline Loan) if (i) before the making of such
Swingline Loan, such Lender had notified the Swingline Lender
that a Default had occurred and was continuing and that such
Lender would not refinance such Swingline Loan or (ii) to the
extent (and only to the extent) that such Swingline Loan,
together with all Revolving Credit Loans then outstanding at the
time of the making of such Swingline Loan together with the
aggregate amount of all outstanding Letter of Credit Liabilities
exceeds the then aggregate amount of the Revolving Credit
Commitments at the time of the making of such Swingline Loan.
The Company agrees that any Lender so purchasing a participation
(or assignment) in such Swingline Loan may exercise all rights of
set-off, bankers' lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a
direct holder of a Swingline Loan in the amount of such
participation. The Company hereby promises to pay the Agent for
account of the Swingline Lender the entire outstanding principal
amount of the Swingline Loans, and each such Swingline Loan shall
mature, on the Revolving Credit Commitment Termination Date.
2.03 Letters of Credit. Subject to the terms and
conditions of this Agreement, the Revolving Credit Commitments
may be utilized, upon the request of the Company, in addition to
the Revolving Credit Loans provided for by Section 2.01(a)
hereof, by the issuance by the Issuing Bank of letters of credit
(collectively, "Letters of Credit") for account of the Company or
any of its Subsidiaries (as specified by the Company) and payable
in Dollars, provided that in no event shall (i) the aggregate
amount of all Letter of Credit Liabilities plus the aggregate
outstanding principal amount of the Revolving Credit Loans and
the aggregate outstanding principal amount of the Swingline
Loans, exceed the lesser of (x) the Borrowing Base and (y) the
aggregate amount of the Revolving Credit Commitments as in effect
from time to time, (ii) the outstanding aggregate amount of all
Letter of Credit Liabilities exceed $90,000,000 and (iii) the
expiration date of any Letter of Credit extend beyond the earlier
of (I) the Revolving Credit Commitment Termination Date and
(II) except for any Letters of Credit issued to PNC Bank,
National Association, with respect to its obligations under
Letters of Credit A-301673 and A-301404 referred to in the Letter
of Credit Chart set forth in Schedule I hereto and Letters of
Credit replacing such letters of credit issued by PNC Bank,
National Association, the date twelve months following the
issuance of such Letter of Credit (or in the case of any renewal
or extension thereof, twelve months after such renewal or
extension). The following additional provisions shall apply to
Letters of Credit:
(a) The Company shall give the Agent at least
three Business Days' irrevocable prior notice (effective
upon receipt) specifying the Business Day (which shall be no
later than thirty days preceding the Revolving Credit
Commitment Termination Date) each Letter of Credit is to be
issued and the account party or parties therefor and
describing in reasonable detail the proposed terms of such
Letter of Credit (including the beneficiary thereof) and the
nature of the transactions or obligations proposed to be
supported thereby (including whether such Letter of Credit
is to be a commercial letter of credit or a standby letter
of credit). Upon receipt of any such notice, the Agent
shall advise the Issuing Bank of the contents thereof.
(b) On each day during the period commencing with the
issuance by the Issuing Bank of any Letter of Credit and
until such Letter of Credit shall have expired or been
terminated, the Revolving Credit Commitment of each
Revolving Credit Lender shall be deemed to be utilized for
all purposes of this Agreement in an amount equal to such
Lender's Revolving Credit Commitment Percentage of the then
undrawn amount of such Letter of Credit. Each Revolving
Credit Lender (other than the Issuing Bank) agrees that,
upon the issuance of any Letter of Credit hereunder, it
shall automatically acquire a participation in the Issuing
Bank's liability under such Letter of Credit in an amount
equal to such Lender's Revolving Credit Commitment
Percentage of such liability, and each Revolving Credit
Lender (other than the Issuing Bank) thereby shall
absolutely, unconditionally and irrevocably assume, as
primary obligor and not as surety, and shall be
unconditionally obligated to the Issuing Bank to pay and
discharge when due, its Revolving Credit Commitment
Percentage of the Issuing Bank's liability under such Letter
of Credit.
(c) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment under such Letter of
Credit, the Issuing Bank shall promptly notify the Company
(through the Agent) of the amount to be paid by the Issuing
Bank as a result of such demand and the date on which
payment is to be made by the Issuing Bank to such
beneficiary in respect of such demand. Notwithstanding the
identity of the account party of any Letter of Credit, the
Company hereby unconditionally agrees to pay and reimburse
the Agent for account of the Issuing Bank for the amount of
each demand for payment under such Letter of Credit that is
in substantial compliance with the provisions of such Letter
of Credit at or prior to the date on which payment is to be
made by the Issuing Bank to the beneficiary thereunder,
without presentment, demand, protest or other formalities of
any kind.
(d) Forthwith upon its receipt of a notice referred to
in paragraph (c) of this Section 2.03, the Company shall
advise the Agent whether or not the Company intends to
borrow hereunder to finance its obligation to reimburse the
Issuing Bank for the amount of the related demand for
payment and, if it does, submit a notice of such borrowing
as provided in Section 4.05 hereof. In the event that the
Company fails to so advise the Agent, or if the Company
fails to reimburse the Issuing Bank for a demand for payment
under a Letter of Credit by the date of such payment, the
Agent shall give each Revolving Credit Lender prompt notice
of the demand for payment, specifying such Lender's
Revolving Credit Commitment Percentage of the amount of the
related demand for payment.
(e) Each Revolving Credit Lender (other than the
Issuing Bank) shall pay to the Agent for account of the
Issuing Bank at the Principal Office in Dollars and in
immediately available funds, the amount of such Lender's
Revolving Credit Commitment Percentage of any payment under
a Letter of Credit upon notice by the Issuing Bank (through
the Agent) to such Revolving Credit Lender requesting such
payment and specifying such amount, unless such payment
under such Letter of Credit would not have been made but for
the gross negligence or willful misconduct of the Issuing
Bank. Each such Revolving Credit Lender's obligation to
make such payment to the Agent for account of the Issuing
Bank under this paragraph (e), and the Issuing Bank's right
to receive the same, shall, subject to the preceding
sentence, be absolute and unconditional and shall not be
affected by any circumstance whatsoever, including, without
limitation, the failure of any other Revolving Credit Lender
to make its payment under this paragraph (e), the financial
condition of any Obligor (or any other account party), the
existence of any Default or the termination of the
Commitments. Each such payment to the Issuing Bank shall be
made without any offset, abatement, withholding or reduction
whatsoever. If any Revolving Credit Lender shall default in
its obligation to make any such payment to the Agent for
account of the Issuing Bank, for so long as such default
shall continue the Agent may, at the request of the Issuing
Bank, withhold from any payments received by the Agent under
this Agreement for account of such Revolving Credit Lender
the amount so in default and, to the extent so withheld, pay
the same to the Issuing Bank in satisfaction of such
defaulted obligation.
(f) Upon the making of each payment by a Revolving
Credit Lender to the Issuing Bank pursuant to
paragraph (e) above in respect of any Letter of Credit, such
Lender shall, automatically and without any further action
on the part of the Agent, the Issuing Bank or such Lender,
acquire (i) a participation in an amount equal to such
payment in the Reimbursement Obligation owing to the Issuing
Bank by the Company hereunder and under the Letter of Credit
Documents relating to such Letter of Credit and (ii) a
participation in a percentage equal to such Lender's
Revolving Credit Commitment Percentage in any interest or
other amounts payable by the Company hereunder and under
such Letter of Credit Documents in respect of such
Reimbursement Obligation (other than the commissions,
charges, costs and expenses payable to the Issuing Bank
pursuant to paragraph (g) of this Section 2.03). Upon
receipt by the Issuing Bank from or for account of the
Company of any payment in respect of any Reimbursement
Obligation or any such interest or other amount (including
by way of setoff or application of proceeds of any
collateral security) the Issuing Bank shall promptly pay to
the Agent for account of each Revolving Credit Lender
entitled thereto, such Revolving Credit Lender's Revolving
Credit Commitment Percentage of such payment, each such
payment by the Issuing Bank to be made in the same money and
funds in which received by the Issuing Bank. In the event
any payment received by the Issuing Bank and so paid to the
Revolving Credit Lenders hereunder is rescinded or must
otherwise be returned by the Issuing Bank, each Revolving
Credit Lender shall, upon the request of the Issuing Bank
(through the Agent), repay to the Issuing Bank (through the
Agent) the amount of such payment paid to such Lender, with
interest at the rate specified in paragraph (j) of this
Section 2.03.
(g) The Company shall pay to the Agent for account of
each Revolving Credit Lender (ratably in accordance with
their respective Revolving Credit Commitment Percentages) a
letter of credit fee in respect of each Letter of Credit in
an amount equal to a rate per annum equal to the Letter of
Credit Fee Rate of the daily average undrawn amount of such
Letter of Credit for the period from and including the date
of issuance of such Letter of Credit (i) in the case of a
Letter of Credit that expires in accordance with its terms,
to and including such expiration date and (ii) in the case
of a Letter of Credit that is drawn in full or is otherwise
terminated other than on the stated expiration date of such
Letter of Credit, to but excluding the date such Letter of
Credit is drawn in full or is terminated (such fee to be
non-refundable, to be paid in arrears on each Quarterly Date
and on the Revolving Credit Commitment Termination Date and
to be calculated for any day after giving effect to any
payments made under such Letter of Credit on such day). In
addition, the Company shall pay to the Agent for account of
the Issuing Bank a fronting fee in respect of each Letter of
Credit in an amount equal to 1/4 of 1% per annum of the
daily average undrawn amount of such Letter of Credit for
the period from and including the date of issuance of such
Letter of Credit (i) in the case of a Letter of Credit that
expires in accordance with its terms, to and including such
expiration date and (ii) in the case of a Letter of Credit
that is drawn in full or is otherwise terminated other than
on the stated expiration date of such Letter of Credit, to
but excluding the date such Letter of Credit is drawn in
full or is terminated (such fee to be non-refundable, to be
paid in arrears on each Quarterly Date and on the Revolving
Credit Commitment Termination Date and to be calculated for
any day after giving effect to any payments made under such
Letter of Credit on such day) plus all commissions, charges,
costs and expenses in the amounts customarily charged by the
Issuing Bank from time to time in like circumstances with
respect to the issuance of each Letter of Credit and
drawings and other transactions relating thereto and as
shown in fee schedules provided by the Issuing Bank to the
Company.
(h) Promptly following the end of each calendar month,
the Issuing Bank shall deliver (through the Agent) to each
Revolving Credit Lender and the Company a notice describing
the aggregate amount of all Letters of Credit outstanding at
the end of the month. Upon the request of any Revolving
Credit Lender from time to time, the Issuing Bank shall
deliver any information reasonably requested by such Lender
with respect to each Letter of Credit then outstanding.
(i) The issuance by the Issuing Bank of each Letter of
Credit shall, in addition to the conditions precedent set
forth in Section 7 hereof, be subject to the conditions
precedent that (i) such Letter of Credit shall be in such
form, contain such terms and support such transactions as
shall be satisfactory to the Issuing Bank consistent with
its then current practices and procedures with respect to
letters of credit of the same type and (ii) the Company
shall have executed and delivered such applications,
agreements and other instruments relating to such Letter of
Credit as the Issuing Bank shall have reasonably requested
consistent with its then current practices and procedures
with respect to letters of credit of the same type, provided
that in the event of any conflict between any such
application, agreement or other instrument and the
provisions of this Agreement or any Security Document, the
provisions of this Agreement and the Security Documents
shall control.
(j) To the extent that any Revolving Credit Lender
shall fail to pay any amount required to be paid pursuant to
paragraph (e) or (f) of this Section 2.03 on the due date
therefor, such Lender shall pay interest to the Issuing Bank
(through the Agent) on such amount from and including such
due date to but excluding the date such payment is made at a
rate per annum equal to the Federal Funds Rate, provided
that if such Lender shall fail to make such payment to the
Issuing Bank within three Business Days of such due date,
then, retroactively to the due date, such Lender shall be
obligated to pay interest on such amount at the Post-Default
Rate.
(k) The issuance by the Issuing Bank of any
modification or supplement to any Letter of Credit hereunder
shall be subject to the same conditions applicable under
this Section 2.03 to the issuance of new Letters of Credit,
and no such modification or supplement shall be issued
hereunder unless either (i) the respective Letter of Credit
affected thereby would have complied with such conditions
had it originally been issued hereunder in such modified or
supplemented form or (ii) the Majority Revolving Credit
Lenders (if such conditions could have been amended with the
consent of the Majority Revolving Credit Lenders or all of
the Revolving Credit Lenders (if such conditions could only
have been amended with the consent of all Revolving Credit
Lenders) shall have consented thereto.
(l) Concurrently with the satisfaction of the
conditions precedent set forth in Section 7.01 hereof, all
letters of credit outstanding on the Effective Date under
the Existing Credit Agreement shall be deemed to be Letters
of Credit outstanding hereunder and the Revolving Credit
Lenders shall, automatically and without further action on
the part of the Agent, the Issuing Bank or such Revolving
Credit Lenders, acquire a participation interest in each
such letter of credit as if such letter of credit shall have
been issued hereunder.
The Company hereby indemnifies and holds harmless each Revolving
Credit Lender and the Agent from and against any and all claims,
damages, losses, liabilities, costs or expenses that such Lender
or the Agent may incur (or that may be claimed against such
Lender or the Agent by any Person whatsoever) by reason of or in
connection with the execution and delivery or transfer of or
payment or refusal to pay by the Issuing Bank under any Letter of
Credit; provided that the Company shall not be required to
indemnify any Lender or the Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to
the extent, caused by (x) the willful misconduct or gross
negligence of the Issuing Bank in determining whether a request
presented under any Letter of Credit complied with the terms of
such Letter of Credit or (y) the Issuing Bank's failure to pay
under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of such
Letter of Credit. Nothing in this Section 2.03 is intended to
limit the other obligations of the Company, any Lender, the
Issuing Bank or the Agent under this Agreement.
2.04 Changes of Commitments.
(a) The Company shall have the right at any time or
from time to time (i) to terminate or reduce the aggregate unused
amount of the Term Loan Commitments, (ii) so long as no Revolving
Credit Loans, Swingline Loans or Letter of Credit Liabilities are
outstanding, to terminate the Revolving Credit Commitments and
(iii) to reduce the aggregate unused amount of the Revolving
Credit Commitments (for which purpose use of the Revolving Credit
Commitments shall be deemed to include the aggregate amount of
Letter of Credit Liabilities); provided that (x) the Company
shall give notice of each such termination or reduction as
provided in Section 4.05 hereof, (y) each partial reduction shall
be in an aggregate amount at least equal to $5,000,000 (or a
larger multiple of $1,000,000) and (z) the aggregate amount of
the Revolving Credit Commitments shall at no time be less than
the aggregate outstanding principal amount of all Revolving
Credit Loans, Swing Line Loans and Letter of Credit Liabilities.
(b) Any portion of the Term Loan Commitments not used
on the Effective Date shall terminate automatically at the close
of business on the Effective Date.
(c) The Company shall have the right to terminate or
reduce the unused amount of the Swingline Commitment at any time
or from time to time on not less than three Business Days' prior
notice to the Agent (which shall promptly notify the Swingline
Lender and each Lender) of each such termination or reduction,
which notice shall specify the effective date thereof and the
amount of any such reduction (which shall be in integral
multiples of $100,000) and shall be irrevocable and effective
only upon receipt by the Agent.
(d) The Commitments of any Class (including the
Swingline Commitment) once terminated or reduced may not be
reinstated.
2.05 Commitment Fee. The Company shall pay to the
Agent for account of each Lender a commitment fee on the daily
average unused amount of each Term Loan Commitment and Revolving
Credit Commitment of such Lender (solely for which purpose the
aggregate amount of any Letter of Credit Liabilities shall be
deemed to be a pro rata (based on the Revolving Credit
Commitments) use of each Lender's Revolving Credit Commitment and
outstanding Swingline Loans shall not constitute the use of any
Lender's Revolving Credit Commitment other than the Swingline
Lender), for the period from and including the date of this
Agreement to but not including the earlier of the date such
Commitment terminates or is terminated, at a rate per annum for
any period from and including the date on which the Company shall
have delivered a certificate pursuant to clause (iii) of the last
paragraph of Section 9.01 hereof demonstrating in reasonable
detail (based upon financial statements for the fiscal period of
the Guarantor most recently ended that have been delivered to the
Lenders pursuant to Section 9.01(b) or (c) hereof or, in
connection with the Lagasse Acquisition, on the Effective Date)
that the Pricing Leverage Ratio, as of the end of the respective
quarterly fiscal period or fiscal year, is within one of the
ranges set forth below, to but excluding the date of delivery of
the next such certificate, shall equal the percentage per annum
set forth below:
Ratio Commitment
Fee
Greater than 3.5 to 1 .50%
Less than or equal
to 3.5 to 1 .375%
; provided that, during any period when an Event of Default or
Default in delivery of the certificate pursuant to clause (iii)
of the last paragraph of Section 9.01 hereof shall have occurred
and be continuing, such rate per annum shall be .50%; and
provided, further, that until delivery of the first such
certificate such rate per annum shall be .50%.
Accrued commitment fees on each Commitment shall be payable
monthly on the last Business Day of each month and on the date
such Commitment terminates or is terminated.
2.06 Lending Offices. The Loans of each Class and
Type made by each Lender shall be made and maintained at such
Lender's Applicable Lending Office for Loans of such Class and
Type.
2.07 Several Obligations; Remedies Independent. The
failure of any Lender to make any Loan to be made by it on the
date specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but neither any Lender
nor the Agent shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender, and
(except as otherwise provided in Section 4.06 hereof) no Lender
shall have any obligation to the Agent or any other Lender for
the failure by such Lender to make any Loan required to be made
by such Lender; provided that nothing in this sentence shall
limit the recourse of the Company against such Lender. The
amounts payable by the Company at any time hereunder to each
Lender shall be a separate and independent debt and each Lender
shall be entitled, subject to Section 10 hereof in the case of
any acceleration of Indebtedness hereunder or termination of any
Commitments, to protect and enforce its rights arising out of
this Agreement, and it shall not be necessary for any other
Lender or the Agent to consent to, or be joined as an additional
party in, any proceedings for such purposes.
2.08 Evidence of Debt; Registered Loans.
(a) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the
indebtedness of the Company to such Lender resulting from
each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from
time to time hereunder.
(b) The Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the
Class and Type thereof and the Interest Period (if any)
applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Company to
each Lender hereunder and (iii) the amount of any sum received by
the Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(c) The entries made in the accounts maintained
pursuant to paragraph (a) or (b) of this Section shall (absent
manifest error) be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the
failure of any Lender or the Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation
of the Company to repay the Loans in accordance with the terms of
this Agreement.
(d) Any Lender may request that Loans made by it be
evidenced by a promissory note. In such event, the Company shall
prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns) and in a form
approved by the Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 12.05) be
represented by one or more promissory notes in such form payable
to the order of the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered
assigns).
(e) Notwithstanding the foregoing, any Term Loan
Lender that is not a U.S. Person and is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code may request the
Company (through the Agent), and the Company agrees thereupon, to
record on the Register referred to in Section 12.06(g) hereof any
Term Loans ("Registered Loans") held by such Lender under this
Agreement. A Term Loan once recorded on the Register may not be
removed from the Register so long as it remains outstanding.
(f) Each "Lender" under the Existing Credit Agreement
shall, as soon as practicable after the Effective Date, surrender
to the Company for cancellation any "Notes" (as defined in the
Existing Credit Agreement). No Loans hereunder shall be
evidenced by such Notes (which shall be deemed cancelled) and all
such Loans shall only be evidenced by the accounts referred to in
Section 2.08(a) hereof or the notes referred to in Section
2.08(d) hereof.
2.09 Optional Prepayments and Conversions or
Continuations of Loans. Subject to Section 4.04 hereof, the
Company shall have the right to prepay Loans, or to Convert
Revolving Credit Loans and Term Loans of one Type into Loans of
another Type or Continue Revolving Credit Loans and Term Loans of
one Type as Loans of the same Type, at any time or from time to
time, provided that: (a) the Company shall give the Agent (or,
in the case of the Swingline Loans, the Swingline Lender) notice
of each such prepayment, Conversion or Continuation as provided
in Section 4.05 hereof (and, upon the date specified in any such
notice of prepayment, the amount to be prepaid shall become due
and payable hereunder); (b) Eurodollar Loans may be Converted
only on the last day of an Interest Period for such Loans;
(c) prepayments by the Company of the Term Loans shall be applied
pro rata to the Tranche A Term Loans and the Tranche B Term
Loans; (d) prepayments by the Company of any Class of Term Loans
shall be applied to the remaining installments of such Term Loans
pro rata; (e) if any Swingline Loan is outstanding, the Revolving
Credit Loans may not be prepaid or converted; and (f) Swingline
Loans may not be Continued. Notwithstanding the foregoing, and
without limiting the rights and remedies of the Lenders under
Section 10 hereof, in the event that any Event of Default shall
have occurred and be continuing, the Agent may (and at the
request of the Majority Lenders shall) suspend the right of the
Company to Convert any Loan into a Eurodollar Loan, or to
Continue any Loan as a Eurodollar Loan, in which event all Loans
shall be Converted (on the last day(s) of the respective Interest
Periods therefor) or Continued, as the case may be, as Base Rate
Loans.
2.10 Mandatory Prepayments and Reductions of
Commitments.
(a) Borrowing Base. Until the Revolving Credit
Commitment Termination Date, the Company shall from time to time
prepay the Revolving Credit Loans and Swingline Loans (and/or
provide cover for Letter of Credit Liabilities as specified in
paragraph (h) below) in such amounts as shall be necessary so
that at all times the sum of the aggregate outstanding amount of
the Revolving Credit Loans, the aggregate outstanding amount of
Swingline Loans and the outstanding Letter of Credit Liabilities
shall not exceed the Borrowing Base, such amount to be applied,
first, to Swingline Loans outstanding and, second, to Revolving
Credit Loans outstanding and, third, as cover for Letter of
Credit Liabilities outstanding.
(b) Annual Cleanup. The Company shall from time to
time prior to the Revolving Credit Commitment Termination Date
prepay the Revolving Credit Loans and the Swingline Loans in such
amounts as shall be necessary so that, for a period of at least
30 consecutive days in each fiscal year of the Company, the
aggregate outstanding principal amount of the Revolving Credit
Loans together with the aggregate outstanding principal amount of
the Swingline Loans shall not exceed $250,000,000 or such other
greater amount as the Majority Lenders shall have agreed to,
after consideration thereof in good faith.
(c) Excess Cash Flow. Not later than the date 90 days
after the end of each fiscal year of the Company ending after the
date hereof, the Company shall prepay Loans (and/or provide cover
for Letter of Credit Liabilities as specified in paragraph (h)
below), and the Commitments shall be subject to automatic
reduction, without prepayment or commitment reduction premium
other than any amounts payable pursuant to Section 5.05 hereof,
in an aggregate amount equal to the excess of (A) the Required
Percentage (as defined below) of Excess Cash Flow for such fiscal
year over (B) the aggregate amount of prepayments of Term Loans
made during such fiscal year pursuant to Section 2.09 hereof and,
after the payment in full of the Term Loans, the aggregate amount
of voluntary reductions of Revolving Credit Commitments made
during such fiscal year pursuant to Section 2.04(c) hereof, such
prepayment and reduction to be effected in each case in the
manner and to the extent specified in paragraph (g) of this
Section 2.10. "Required Percentage" of Excess Cash Flow for any
fiscal year shall mean (i) if the Debt to Cash Flow Ratio as of
the last day of such fiscal year is less than 3 to 1, 50% and
(ii) otherwise, 75%.
(d) Equity Issuance. If, at any time after the
Effective Date, the Guarantor or any of its Subsidiaries shall
receive Net Available Proceeds from one or more Equity Issuances,
including all prior Equity Issuances as to which a prepayment has
not yet been made under this Section 2.10(d), the Company shall,
within three Business Days of receipt of such Net Available
Proceeds, prepay Loans (and/or provide cover for Letter of Credit
Liabilities as specified in paragraph (h) below), and the
Commitments shall be subject to automatic reduction, in an
aggregate amount equal to the aggregate amount of such Available
Equity Proceeds, such prepayment to be effected in each case in
the manner and to the extent specified in paragraph (g) of this
Section 2.10; provided that notwithstanding the foregoing, the
Guarantor may (x) within 90 days from the receipt thereof use up
to $50,000,000 (or such lesser amount as shall equal the
difference between $50,000,000 and the amount of Net Available
Proceeds received from any Equity Issuance (other than the
Primary Offering) not applied to a prepayment under this Section
2.10(d)) of Net Available Proceeds to finance Permitted
Acquisitions, (y) apply Net Available Proceeds from the Primary
Offering in accordance with Section 9.09(d) hereof and (z)
receive up to $15,000,000 in Net Available Proceeds from issuing
equity to satisfy its obligations under warrants and stock
options without having to prepay Loans.
(e) Sale of Assets. Without limiting the obligation
of the Company to obtain the consent of the Majority Lenders
pursuant to Section 9.05 hereof to any Disposition not otherwise
permitted hereunder, in the event that the Net Available Proceeds
of any Disposition (herein, the "Current Disposition"), and of
all prior Dispositions as to which a prepayment has not yet been
made under this Section 2.10(e), shall exceed $15,000,000 then,
no later than five Business Days prior to the occurrence of the
Current Disposition, the Company will deliver to the Lenders a
statement, certified by a Responsible Officer of the Company, in
form and detail satisfactory to the Agent, of the amount of the
anticipated Net Available Proceeds of the Current Disposition and
of all such prior Dispositions as to which a prepayment has not
yet been made under this Section 2.10(e) and will prepay, upon
receipt of such Net Available Proceeds, Loans (and/or provide
cover for Letter of Credit Liabilities as specified in
paragraph (h) below), and the Commitments shall be subject to
automatic reduction, in an aggregate amount equal to 100% of the
Net Available Proceeds of the Current Disposition and such prior
Dispositions as to which a prepayment has not been made under
this Section 2.10(e) in excess of $15,000,000, such prepayment
and reduction to be effected in each case in the manner and to
the extent specified in paragraph (g) of this Section 2.10.
Notwithstanding the foregoing, the Disposition for fair value of
any Part A Property shall not be a "Disposition" for purposes of
the preceding sentence. If, however, any Part B Property is
disposed of within one year prior to or after the Disposition of
Part A Property located in the same geographical area, the
Company shall, within one year of the last of such Dispositions,
apply the Net Available Proceeds of such Dispositions to (i) the
purchase or construction of a replacement facility or (ii) the
prepayment of the Loans (and/or the provision of cover for Letter
of Credit Liabilities as specified in paragraph (h) below) and
the reduction of Commitments as provided above.
(f) Casualty Events. After the occurrence of any
Casualty Event (other than any Casualty Event with respect only
to Property covered by the Mortgages) resulting in a loss in
excess of $500,000, the Company shall give prompt notice thereof
to the Agent and the Lenders. If no Default has occurred and is
continuing, the Company may, at its option, to be exercised by
delivery of notice to the Agent and the Lenders within four
months of such Casualty Event, elect to apply the Net Available
Proceeds of such Casualty Event to either (i) the repair or
replacement of the Property affected thereby or (ii) the
prepayment of the Loans (and/or the provision of cover for Letter
of Credit Liabilities as specified in paragraph (g) of this
Section 2.10). If a Default has occurred and is continuing, or
if the Company fails to make such an election within four months
from the date of any such Casualty Event, such Net Available
Proceeds shall automatically be applied to the prepayment of the
Loans (and/or the provision of cover for Letter of Credit
Liabilities as specified in paragraph (g) of this Section 2.10).
If the Company elects to so repair or replace the Property
subject to such Casualty Event, the Net Available Proceeds of
such Casualty Event in excess of $500,000 shall be held by the
Agent to be applied to such repair or replacement and advanced to
the Company in periodic installments upon compliance by the
Company with such reasonable conditions as may be imposed by the
Agent, including, but not limited to, reasonable retentions and
lien releases. Interest, if any, actually earned on any Net
Available Proceeds held by the Agent shall be credited to such
Net Available Proceeds, for the benefit of the Company.
(g) Application. Prepayments and reductions of
Commitments described in the above paragraphs of this
Section 2.10 (other than in paragraph (a) or (b) above) shall be
effected as follows:
(i) first, the amount of the prepayment specified in
such paragraphs shall be applied to the Term Loans, pro rata
between each Class of Term Loans and, as to each Class, pro
rata to the remaining installments thereof; and
(ii) second, the Revolving Credit Commitments shall be
automatically reduced in an amount equal to the amount by
which the aggregate amount of the prepayments and reductions
of Commitments provided for in paragraphs (c), (d), (e) and
(f) above exceed any excess over the amount referred to in
the foregoing clause (i) (and to the extent that, after
giving effect to such reduction of Commitments, the
aggregate principal amount of Revolving Credit Loans,
together with the aggregate principal amount of the
Swingline Loans and the aggregate amount of all Letter of
Credit Liabilities, would exceed the Revolving Credit
Commitments, the Company shall, first, prepay Swingline
Loans, second, prepay Revolving Credit Loans and, third,
provide cover for Letter of Credit Liabilities as specified
in paragraph (h) below, in an aggregate amount equal to such
excess).
(h) Cover for Letter of Credit Liabilities. In the
event that the Company shall be required pursuant to this
Section 2.10, or pursuant to Section 10 hereof, to provide cover
for Letter of Credit Liabilities, the Company shall effect the
same by paying to the Agent immediately available funds in an
amount equal to the required amount, which funds shall be
retained by the Agent in the Collateral Account (as provided
therein as collateral security in the first instance for the
Letter of Credit Liabilities) until such time as the Letters of
Credit shall have been terminated and all of the Letter of Credit
Liabilities paid in full.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) Revolving Credit Loans. The Company hereby
promises to pay to the Agent for account of each Revolving Credit
Lender the entire outstanding principal amount of such Lender's
Revolving Credit Loans, and each Revolving Credit Loan shall
mature, on the Revolving Credit Commitment Termination Date.
(b) Tranche A Term Loans. The Company hereby promises
to pay to the Agent for account of the Tranche A Term Loan
Lenders the aggregate principal amount of the Tranche A Term
Loans in twenty (20) consecutive installments payable on each
Quarterly Date, beginning on December 31, 1996, the first four
(4) of which shall each be in the aggregate amount of $5,625,000,
the next four (4) of which shall each be in the aggregate amount
of $6,250,000, the next four (4) of which shall each be in the
aggregate amount of $7,500,000, the next four (4) of which shall
each be in the aggregate amount of $8,750,000 and the last four
(4) of which shall each be in the aggregate amount of $9,375,000.
(c) Tranche B Term Loans. The Company hereby promises
to pay to the Agent for account of the Tranche B Term Loan
Lenders the aggregate principal amount of the Tranche B Term
Loans in twenty-eight (28) consecutive quarterly installments
payable on each Quarterly Date beginning December 31, 1996, the
first twenty (20) of which shall each be in the aggregate amount
of $250,000 and the last eight (8) of which shall each be in the
aggregate amount of $7,500,000.
3.02 Interest. The Company hereby promises to pay to
the Agent for account of each Lender interest on the unpaid
principal amount of each Loan (including any Swingline Loan) made
by such Lender for the period from and including the date of such
Loan to but excluding the date such Loan shall be paid in full,
at the following rates per annum:
(a) during such periods as such Loan is a Base Rate
Loan (other than a Swingline Loan), the Base Rate (as in
effect from time to time) plus the Applicable Margin,
(b) during such periods as such Loan is a Eurodollar
Loan, for each Interest Period relating thereto, the
Eurodollar Rate for such Loan for such Interest Period plus
the Applicable Margin, and
(c) if such Loan is a Swingline Loan, the Swingline
Rate (as in effect from time to time) plus the Applicable
Margin (determined as if such Swingline Loans were Revolving
Credit Loans that were Base Rate Loans).
Notwithstanding the foregoing, the Company hereby promises to pay
to the Agent for account of each Lender interest at the
applicable Post-Default Rate on any principal of any Loan made by
such Lender, on any Reimbursement Obligation owed to such Lender
and on any other amount payable by the Company hereunder to or
for account of such Lender, that shall not be paid in full when
due (whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise), for the period from and including the
due date thereof to but excluding the date the same is paid in
full. Accrued interest on each Loan shall be payable (i) in the
case of a Base Rate Loan, quarterly on the Quarterly Dates,
(ii) in the case of a Eurodollar Loan, on the last day of each
Interest Period therefor and, if such Interest Period is longer
than three months, at three-month intervals following the first
day of such Interest Period, (iii) in the case of a Swingline
Loan, on the last day of each calendar month during which such
Swingline Loan shall be outstanding, and (iv) in the case of any
Loan (including any Swingline Loan), upon the payment or
prepayment thereof or the Conversion of such Loan to a Loan of
another Type (but only on the principal amount so paid, prepaid
or Converted), except that interest payable at the Post-Default
Rate shall be payable from time to time on demand. Promptly
after the determination of any interest rate provided for herein
or any change therein, the Agent shall give notice thereof to the
Lenders to which such interest is payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein,
all payments of principal, interest, Reimbursement Obligations
and other amounts to be made by the Obligors under this
Agreement, and, except to the extent otherwise provided therein,
all payments to be made by the Obligors under any other Basic
Document, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Agent
at an account designated by the Agent with Chase at the Principal
Office, not later than 1:00 p.m. New York time on the date on
which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the
next succeeding Business Day).
(b) Any Lender for whose account any such payment is
to be made may (but shall not be obligated to) debit the amount
of any such payment that is not made by such time to any ordinary
deposit account of either Obligor with such Lender (with notice
to such Obligor and the Agent).
(c) Each Obligor shall, at the time of making each
payment under this Agreement for account of any Lender, specify
to the Agent (which shall so notify the intended recipient(s)
thereof) the Loans, Reimbursement Obligations or other amounts
payable hereunder to which such payment is to be applied (and in
the event that such Obligor fails to so specify, or if an Event
of Default has occurred and is continuing, such payment shall be,
subject to Section 4.02 hereof, applied first to the Swingline
Lender (to the extent any amounts are then due and payable to the
Swingline Lender on account of any Swingline Loan) and then in
payment of amounts due under this Agreement in such manner as the
Agent or the Majority Lenders, subject to Section 4.02 hereof,
may determine to be appropriate).
(d) Except to the extent otherwise provided in the
last sentence of Section 2.03(e) hereof, each payment received by
the Agent under this Agreement for account of any Lender shall be
paid by the Agent promptly to such Lender, in immediately
available funds, for account of such Lender's Applicable Lending
Office for the Loan or other obligation in respect of which such
payment is made.
(e) Except to the extent otherwise provided herein, if
the due date of any payment under this Agreement would otherwise
fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest shall
be payable for any principal so extended for the period of such
extension.
4.02 Pro Rata Treatment. Except to the extent
otherwise provided herein: (a) each borrowing of Loans of a
particular Class from the Lenders under Section 2.01 hereof shall
be made from the relevant Lenders, each payment of commitment fee
under Section 2.05 hereof in respect of the Commitments of a
particular Class shall be made for account of the relevant
Lenders, and each termination or reduction of the amount of the
Commitments of a particular Class under Section 2.04 hereof shall
be applied to the respective Commitments of such Class of the
relevant Lenders, pro rata according to the amounts of their
respective Commitments of such Class; (b) except as otherwise
provided in Section 5.04 hereof, Eurodollar Loans of any Class
having the same Interest Period shall be allocated pro rata among
the relevant Lenders according to the amounts of their respective
Revolving Credit and Term Loan Commitments (in the case of the
making of Loans and Revolving Credit Loans made to refinance
Swingline Loans) or their respective Revolving Credit and Term
Loans (in the case of Conversions and Continuations of Loans);
(c) each payment or prepayment of principal of Loans of a
particular Class shall be made for account of the relevant
Lenders pro rata in accordance with the respective unpaid
principal amounts of the Loans of such Class held by them; and
(d) each payment of interest on Loans of a particular Class shall
be made for account of the relevant Lenders pro rata in
accordance with the amounts of interest on such Loans then due
and payable to the respective Lenders. Notwithstanding the
foregoing, borrowings, payments and prepayments of Swingline
Loans shall be made without regard to the foregoing provisions of
this Section 4.02.
4.03 Computations. Interest on Eurodollar Loans and
Reimbursement Obligations and commitment fees and letter of
credit fees shall be computed on the basis of a year of 360 days
and actual days elapsed (including the first day but, except as
otherwise provided in Section 2.03(g) hereof, excluding the last
day) occurring in the period for which payable and interest on
Base Rate Loans shall be computed on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed
(including the first day but excluding the last day) occurring in
the period for which payable. Notwithstanding the foregoing, for
each day that the Base Rate is calculated by reference to the
Federal Funds Rate, interest on Base Rate Loans shall be computed
on the basis of a year of 360 days and actual days elapsed.
4.04 Minimum Amounts. Except for mandatory
prepayments made pursuant to Section 2.10 hereof and Conversions
or prepayments made pursuant to Section 5.04 hereof, and each
borrowing, Conversion and partial prepayment of principal of
Loans (other than Swingline Loans and Revolving Credit Loans made
to refinance Swingline Loans) shall be in an aggregate amount at
least equal to $5,000,000 or a larger multiple of $1,000,000
(borrowings, Conversions or prepayments of or into Loans of
different Types or, in the case of Eurodollar Loans, having
different Interest Periods at the same time hereunder to be
deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period),
provided that the aggregate principal amount of Eurodollar Loans
having the same Interest Period shall be in an amount at least
equal to $10,000,000 or a larger multiple of $1,000,000 and, if
any Eurodollar Loans would otherwise be in a lesser principal
amount for any period, such Loans shall be Base Rate Loans during
such period. Each borrowing of Swingline Loans pursuant to
Section 2.01(d) hereof shall be in an aggregate amount at least
equal to $500,000 or in multiples of $100,000 in excess thereof
and each partial prepayment of Swingline Loans shall be in an
aggregate amount at least equal to $100,000 or in multiples of
$100,000 in excess thereof.
4.05 Certain Notices. Notices by the Company to the
Agent of terminations or reductions of the Commitments, of
borrowings, Conversions, Continuations and optional prepayments
of Loans and of Classes of Loans, of Types of Loans and of the
duration of Interest Periods shall be irrevocable and shall be
effective only if received by the Agent (or the Swingline Lender,
as the case may be) not later than 11:00 a.m. (in the case of
notices in respect of Eurodollar Loans), 12:00 noon (in the case
of notices in respect of Base Rate Loans) and 2:00 p.m. (in the
case of notices in respect of Swingline Loans), New York time, on
the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or
prepayment or the first day of such Interest Period specified
below:
Number of
Business
Notice Days Prior
Termination or reduction
of Commitments 3
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Borrowing or prepayment of
Swingline Loans or termination
or reduction of Swingline
Commitment same day
Each such notice of termination or reduction shall specify the
amount and the Class of the Commitments to be terminated or
reduced. Each such notice of borrowing, Conversion, Continuation
or optional prepayment shall specify the Class of Loans to be
borrowed, Converted, Continued or prepaid and the amount (subject
to Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid and the date of borrowing,
Conversion, Continuation or optional prepayment (which shall be a
Business Day). Each such notice of the duration of an Interest
Period shall specify the Loans to which such Interest Period is
to relate. The Agent shall promptly notify the Lenders of the
contents of each such notice. In the event that the Company
fails to select the Type of Loan, or the duration of any Interest
Period for any Eurodollar Loan, within the time period and
otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current
Interest Period for such Loan or (if outstanding as a Base Rate
Loan) will remain as, or (if not then outstanding) will be made
as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which the Payor is to make payment
to the Agent of (in the case of a Lender) the proceeds of a Loan
to be made by such Lender hereunder or (in the case of the
Company) a payment to the Agent for account of one or more of the
Lenders hereunder (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required
to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made
the Required Payment to the Agent, the recipient(s) of such
payment shall, on demand, repay to the Agent the amount so made
available together with interest thereon in respect of each day
during the period commencing on the date (the "Advance Date")
such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such day and, if such recipient(s) shall
fail promptly to make such payment, the Agent shall be entitled
to recover such amount, on demand, from the Payor, together with
interest as aforesaid, provided that if neither the recipient(s)
nor the Payor shall return the Required Payment to the Agent
within three Business Days of the Advance Date, then,
retroactively to the Advance Date, the Payor and the recipient(s)
shall each be obligated to pay interest on the Required Payment
as follows:
(i) if the Required Payment shall represent a payment
to be made by the Company to the Lenders, the Company and
the recipient(s) shall each be obligated retroactively to
the Advance Date to pay interest in respect of the Required
Payment at the Post-Default Rate (without duplication of the
obligation of the Company under Section 3.02 hereof to pay
interest on the Required Payment at the Post-Default Rate),
it being understood that the return by the recipient(s) of
the Required Payment to the Agent shall not limit such
obligation of the Company under said Section 3.02 to pay
interest at the Post-Default Rate in respect of the Required
Payment and
(ii) if the Required Payment shall represent proceeds
of a Loan to be made by the Lenders to the Company, the
Payor and the Company shall each be obligated retroactively
to the Advance Date to pay interest in respect of the
Required Payment pursuant to Section 3.02 hereof, it being
understood that the return by the Company of the Required
Payment to the Agent shall not limit any claim the Company
may have against the Payor in respect of such Required
Payment.
4.07 Sharing of Payments, Etc.
(a) Each Obligor agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option (to the fullest extent permitted by law),
to set off and apply any deposit (general or special, time or
demand, provisional or final), or other indebtedness, held by it
for the credit or account of such Obligor at any of its offices,
in Dollars or in any other currency, against any principal of or
interest on any of such Lender's Loans, Reimbursement Obligations
or any other amount payable to such Lender hereunder, that is not
paid when due (regardless of whether such deposit or other
indebtedness are then due to such Obligor), in which case it
shall promptly notify such Obligor and the Agent thereof,
provided that such Lender's failure to give such notice shall not
affect the validity thereof.
(b) If any Lender shall obtain from any Obligor
payment of any principal of or interest on any Loan of any Class
or Letter of Credit Liability owing to it or in respect of its
interest in any Swingline Loan or payment of any other amount
under this Agreement or any other Basic Document through the
exercise of any right of set-off, banker's lien or counterclaim
or similar right or otherwise (other than from the Agent as
provided herein), and, as a result of such payment, such Lender
shall have received a greater percentage of the principal of or
interest on the Loans of such Class or Letter of Credit
Liabilities or in respect of its interest in any Swingline Loan
or such other amounts then due hereunder or thereunder by such
Obligor to such Lender than the percentage received by any other
Lender, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such
Lender, direct interests in) the Loans of such Class or Letter of
Credit Liabilities or such other amounts, respectively, owing to
such other Lenders (or in interest due thereon, as the case may
be) in such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all the Lenders shall
share the benefit of such excess payment (net of any expenses
that may be incurred by such Lender in obtaining or preserving
such excess payment) pro rata in accordance with the unpaid
principal of and/or interest on the Loans of such Class, interest
in the Swingline Loans or Letter of Credit Liabilities or such
other amounts, respectively, owing to each of the Lenders. To
such end all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if
such payment is rescinded or must otherwise be restored.
(c) Each Obligor agrees that any Lender so purchasing
such a participation (or direct interest) may exercise all rights
of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as if such Lender were a
direct holder of Loans or other amounts (as the case may be)
owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation
of any Obligor. If, under any applicable bankruptcy, insolvency
or other similar law, any Lender receives a secured claim in lieu
of a set-off to which this Section 4.07 applies, such Lender
shall, to the extent practicable, exercise its rights in respect
of such secured claim in a manner consistent with the rights of
the Lenders entitled under this Section 4.07 to share in the
benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Lender from
time to time such amounts as such Lender may determine to be
reasonably necessary to compensate such Lender for any costs that
such Lender determines, in good faith, are attributable to its
making or maintaining of any Eurodollar Loans or its obligation
to make any Eurodollar Loans hereunder, or any reduction in any
amount receivable by such Lender hereunder in respect of any of
such Eurodollar Loans or such obligation (such increases in costs
and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change that:
(i) shall subject any Lender (or its Applicable
Lending Office for any of such Loans) to any tax, duty or
other charge in respect of such Loans or changes the basis
of taxation of any amounts payable to such Lender under this
Agreement in respect of any of such Loans (excluding changes
in the rate of tax on the overall net income of such Lender
or of such Applicable Lending Office by the jurisdiction in
which such Lender has its principal office or such
Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit
or similar requirements (other than the Reserve Requirement
utilized in the determination of the Eurodollar Rate for
such Loan) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of,
such Lender (including, without limitation, any of such
Loans or any deposits referred to in the definition of
"Eurodollar Base Rate" in Section 1.01 hereof), or any
commitment of such Lender (including, without limitation,
the Commitments of such Lender hereunder); or
(iii) imposes any other condition affecting this
Agreement (or any of such extensions of credit or
liabilities) or its Commitments.
If any Lender requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Lender (with
a copy to the Agent), suspend the obligation of such Lender
thereafter to make or Continue Eurodollar Loans, or to Convert
Base Rate Loans into Eurodollar Loans, until the Regulatory
Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.04 hereof shall be
applicable), provided that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01 (but without duplication), in
the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes
deposits by reference to which the interest rate on Eurodollar
Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of such Lender that
includes Eurodollar Loans or (ii) becomes subject to restrictions
on the amount of such a category of liabilities or assets that it
may hold, then, if such Lender so elects by notice to the Company
(with a copy to the Agent), the obligation of such Lender to make
or Continue, or to Convert Base Rate Loans into, Eurodollar Loans
hereunder shall be suspended until such Regulatory Change ceases
to be in effect (in which case the provisions of Section 5.04
hereof shall be applicable).
(c) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Lender from time to time on
request such amounts as such Lender may determine to be necessary
to compensate such Lender (or, without duplication, the bank
holding company of which such Lender is a subsidiary) for any
costs that it determines are attributable to the maintenance by
such Lender (or any Applicable Lending Office or such bank
holding company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having the
force of law and whether or not failure to comply therewith would
be unlawful) of any court or governmental or monetary authority
(i) following any Regulatory Change or (ii) implementing any
risk-based capital guideline or other requirement (whether or not
having the force of law and whether or not the failure to comply
therewith would be unlawful) hereafter issued by any government
or governmental or supervisory authority implementing at the
national level the Basle Accord (including, without limitation,
the Final Risk-Based Capital Guidelines of the Board of Governors
of the Federal Reserve System (12 C.F.R. Part 208, Appendix A;
12 C.F.R. Part 225, Appendix A) and the Final Risk-Based Capital
Guidelines of the Office of the Comptroller of the Currency
(12 C.F.R. Part 3, Appendix A)), of capital in respect of its
Commitments or Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of
return on assets or equity of such Lender (or any Applicable
Lending Office or such bank holding company) to a level below
that which such Lender (or any Applicable Lending Office or such
bank holding company) could have achieved but for such law,
regulation, interpretation, directive or request). For purposes
of this Section 5.01(c) and Section 5.06 hereof, "Basle Accord"
shall mean the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated
July 1988, as amended, modified and supplemented and in effect
from time to time or any replacement thereof.
(d) Each Lender shall notify the Company of any event
occurring after the date hereof entitling such Lender to
compensation under paragraph (a) or (c) of this Section 5.01 as
promptly as practicable, but in any event within 45 days, after
such Lender obtains actual knowledge thereof; provided that
(i) if any Lender fails to give such notice within 45 days after
it obtains actual knowledge of such an event, such Lender shall,
with respect to compensation payable pursuant to this
Section 5.01 in respect of any costs resulting from such event,
only be entitled to payment under this Section 5.01 for costs
incurred from and after the date 45 days prior to the date that
such Lender does give such notice and (ii) each Lender will
designate a different Applicable Lending Office for the Loans of
such Lender affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation and will
not, in the sole opinion of such Lender, be disadvantageous to
such Lender, except that such Lender shall have no obligation to
designate an Applicable Lending Office located in the United
States of America. Each Lender will furnish to the Company a
certificate setting forth the basis and amount of each request by
such Lender for compensation under paragraph (a) or (c) of this
Section 5.01. Determinations and allocations by any Lender for
purposes of this Section 5.01 of the effect of any Regulatory
Change pursuant to paragraph (a) or (b) of this Section 5.01, or
of the effect of capital maintained pursuant to paragraph (c) of
this Section 5.01, on its costs or rate of return of maintaining
Loans or its obligation to make Loans, or on amounts receivable
by it in respect of Loans, and of the amounts required to
compensate such Lender under this Section 5.01, shall be
conclusive, provided that such determinations and allocations are
made on a good faith reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if, on or prior to the
determination of any Eurodollar Base Rate for any Interest
Period:
(a) the Agent determines, which determination shall be
conclusive if made in good faith, that quotations of
interest rates for the relevant deposits referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 hereof
are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of
interest for Eurodollar Loans as provided herein; or
(b) if the related Loans are Revolving Credit Loans,
the Majority Revolving Credit Lenders or, if the related
Loans are Term Loans, the Majority Term Lenders determine,
which determination shall be conclusive if made in good
faith, and notify the Agent that the relevant rates of
interest referred to in the definition of "Eurodollar Base
Rate" in Section 1.01 hereof upon the basis of which the
rate of interest for Eurodollar Loans for such Interest
Period is to be determined are not likely adequately to
cover the cost to such Lenders of making or maintaining
Eurodollar Loans for such Interest Period;
then the Agent shall give the Company and each Lender prompt
notice thereof and, so long as such condition remains in effect,
the Lenders shall be under no obligation to make additional
Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base
Rate Loans into Eurodollar Loans, and the Company shall, on the
last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert
such Loans into Base Rate Loans in accordance with Section 2.09
hereof.
5.03 Illegality. Notwithstanding any other provision
of this Agreement, in the event that it becomes unlawful for any
Lender or its Applicable Lending Office to honor its obligation
to make or maintain Eurodollar Loans hereunder (and, in the sole
opinion of such Lender, the designation of a different Applicable
Lending Office would either not avoid such unlawfulness or would
be disadvantageous to such Lender), then such Lender shall
promptly notify the Company thereof (with a copy to the Agent)
and such Lender's obligation to make or Continue, or to Convert
Loans of any other Type into, Eurodollar Loans shall be suspended
until such time as such Lender may again make and maintain
Eurodollar Loans (in which case the provisions of Section 5.04
hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation
of any Lender to make Eurodollar Loans or to Continue, or to
Convert Base Rate Loans into, Eurodollar Loans shall be suspended
pursuant to Section 5.01 or 5.03 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for
Eurodollar Loans (or, in the case of a Conversion required by
Section 5.01(b) or 5.03 hereof, on such earlier date as such
Lender may specify to the Company with a copy to the Agent) and,
unless and until such Lender gives notice as provided below that
the circumstances specified in Section 5.01 or 5.03 hereof that
gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's
Eurodollar Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans that would otherwise be made or
Continued by such Lender as Eurodollar Loans shall be made
or Continued instead as Base Rate Loans, and all Base Rate
Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the
Agent that the circumstances specified in Section 5.01 or 5.03
hereof that gave rise to the Conversion of such Lender's
Eurodollar Loans pursuant to this Section 5.04 no longer exist
(which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lenders holding Eurodollar Loans
and by such Lender are held pro rata (as to principal amounts,
Types and Interest Periods) in accordance with their respective
Commitments.
5.05 Compensation. The Company shall pay to the Agent
for account of each Lender, upon the request of such Lender
through the Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for
any loss, cost or expense that such Lender determines is
attributable to:
(a) any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Loan made by such Lender for any
reason (including, without limitation, the acceleration of
the Loans pursuant to Section 10 hereof) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason
(including, without limitation, the failure of any of the
conditions precedent specified in Section 7 hereof to be
satisfied) to borrow a Eurodollar Loan from such Lender on
the date for such borrowing specified in the relevant notice
of borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid, Converted or not
borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of
the then current Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan that
would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Loan provided for herein
over (ii) the amount of interest that otherwise would have
accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Lender would have bid in
the London interbank market for Dollar deposits of leading banks
in amounts comparable to such principal amount and with
maturities comparable to such period (as reasonably determined by
such Lender).
5.06 Additional Costs in Respect of Letters of Credit.
Without limiting the obligations of the Company under
Section 5.01 hereof (but without duplication), if as a result of
any Regulatory Change or any risk-based capital guideline or
other requirement heretofore or hereafter issued by any
government or governmental or supervisory authority implementing
at the national level the Basle Accord there shall be imposed,
modified or deemed applicable any tax, reserve, special deposit,
capital adequacy or similar requirement against or with respect
to or measured by reference to Letters of Credit issued or to be
issued hereunder and the result shall be to increase the cost to
any Lender or Lenders of issuing (or purchasing participations
in) or maintaining its obligation hereunder to issue (or purchase
participations in) any Letter of Credit hereunder or reduce any
amount receivable by any Lender hereunder in respect of any
Letter of Credit (which increases in cost, or reductions in
amount receivable, shall be the result of such Lender's or
Lenders' reasonable allocation of the aggregate of such increases
or reductions resulting from such event), then, upon demand by
such Lender or Lenders (through the Agent), the Company shall pay
immediately to the Agent for account of such Lender or Lenders,
from time to time as specified by such Lender or Lenders (through
the Agent), such additional amounts as shall be sufficient to
compensate such Lender or Lenders (through the Agent) for such
increased costs or reductions in amount. A statement as to such
increased costs or reductions in amount incurred by any such
Lender or Lenders, submitted by such Lender or Lenders to the
Company shall be conclusive if made in good faith and in the
absence of manifest error as to the amount thereof.
5.07 U.S. Taxes.
(a) The Company agrees to pay to each Lender that is
not a U.S. Person such additional amounts as are necessary in
order that the net payment of any amount due to such
non-U.S. Person hereunder after deduction for or withholding in
respect of any U.S. Taxes (other than U.S. Taxes attributable to
payments that are effectively connected with the conduct of a
trade or business within the United States of America, within the
meaning of Section 864 of the Code as in effect on the date
hereof, provided that the mere participation in the transactions
contemplated hereby by a foreign office of a Lender shall not
alone be deemed to result in income so connected) imposed with
respect to such payment (or, upon the failure of the Company
properly to make any such deduction or withholding required by
applicable law, payment by each Lender that is not a U.S. Person
of such U.S. Taxes that should have been deducted or withheld),
will not be less than the amount stated herein to be then due and
payable, provided that the foregoing obligation to pay such
additional amounts shall not apply:
(i) to any payment to any Lender hereunder (other than
in respect of any Registered Loan) unless such Lender is, on
the date hereof (or on the date it becomes a Lender
hereunder as provided in Section 12.06(b) hereof), on the
date of each payment hereunder and on the day after any
change in the Applicable Lending Office of such Lender,
entitled to submit either a Form 1001 (relating to such
Lender and entitling it to a complete exemption from
withholding on all interest to be received by it hereunder
in respect of the Loans) or a Form 4224 (relating to all
interest to be received by such Lender hereunder in respect
of the Loans), unless such inability is due to a change of
law (including but not limited to any change in any
applicable treaty, statute, regulation or ruling or judicial
or administrative interpretation of any of the foregoing)
after the date hereof (or the date it became a Lender
hereunder as provided in Section 12.06(b) hereof),
(ii) to any payment to any Lender hereunder in respect
of a Registered Loan (a "Registered Holder"), unless such
Registered Holder (or, if such Registered Holder is not the
beneficial owner of such Registered Loan, the beneficial
owner thereof) is, on the date hereof (or on the date such
Registered Holder becomes a Lender as provided in
Section 12.06(b) hereof), on the date of each payment
hereunder and on the day after any change in the Applicable
Lending Office of such Lender, entitled to submit a
Form W-8, together with an annual certificate stating that
(x) such Registered Holder (or beneficial owner, as the case
may be) is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, is not a resident in a
foreign country specified in a notice published under
Sections 871(h)(6) or 881(c)(6) of the Code and is not a
10% shareholder of the Company within the meaning of
Section 881(c)(3)(B) of the Code, unless such Registered
Holder, or beneficial owner as the case may be, is not so
entitled by reason of a change of law (including but not
limited to any change in any applicable treaty, statute,
regulation or ruling, or judicial or administrative
interpretation of any of the foregoing) occurring after the
date hereof (or the date the Registered Holder or beneficial
owner, as the case may be, became a Registered Holder or
beneficial owner) and (y) such Registered Holder (or
beneficial owner, as the case may be) shall promptly notify
the Company if at any time, such Registered Holder (or
beneficial owner, as the case may be) determines that it is
no longer in a position to provide such certificate to the
Company (or any other form of certification adopted by the
relevant taxing authorities of the United States of America
for such purposes), or
(iii) to any U.S. Taxes imposed solely by reason of the
failure by such non-U.S. Person (or, if such non-U.S. Person
is not the beneficial owner of the relevant Loan, such
beneficial owner) to comply with (x) applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity
or connections with the United States of America of such
non-U.S. Person (or beneficial owner, as the case may be) if
such compliance is required by statute or regulation of the
United States of America as a precondition to relief or
exemption from such U.S. Taxes and (y) this Section 5.07(a).
For the purposes of this Section 5.07(a), (A) "Form 1001" shall
mean Form 1001 (Ownership, Exemption, or Reduced Rate
Certificate) of the Department of the Treasury of the United
States of America, (B) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United
States) of the Department of the Treasury of the United States of
America and (C) "Form W-8" shall mean Form W-8 (Certificate of
Foreign Status of the Department of Treasury of the United States
of America). Each of the Forms referred to in the foregoing
clauses (A), (B) and (C) shall include such successor and related
forms as may from time to time be adopted by the relevant taxing
authorities of the United States of America to document a claim
to which such Form relates.
(b) Within 30 days after paying any amount to the
Agent or any Lender from which it is required by law to make any
deduction or withholding, and within 30 days after it is required
by law to remit such deduction or withholding to any relevant
taxing or other authority, the Company shall deliver to the Agent
for delivery to such non-U.S. Person evidence reasonably
satisfactory to such Person of such deduction, withholding or
payment (as the case may be).
(c) If any Lender shall be entitled to compensation
under this Section 5.07, such Lender, within a reasonable time
after becoming entitled to such compensation, shall (unless
otherwise required by a governmental authority or as a result of
any law, rule, regulation, order or similar directive applicable
to such Lender) designate a different Applicable Lending Office
from that initially selected by such Lender to which payments are
to be made under the Basic Documents, if such designation would
avoid the need for (or reduce the amount of) such compensation
and would not, in the sole opinion of such Lender, be otherwise
disadvantageous to such Lender.
5.08 Replacement of Lenders. If any Lender defaults
in its obligation to make Loans under Section 2.01 hereof or
requests compensation pursuant to Section 5.01, 5.06 or 5.07
hereof, or any Lender's obligation to make or Continue, or to
Convert Loans of any Type into, any other Type of Loan shall be
suspended pursuant to Section 5.01 or 5.03 hereof (any such
Lender so defaulting or requesting such compensation or whose
obligations are so suspended, being herein called a "Relevant
Lender"), the Company, upon three Business Days notice given when
no Default shall have occurred and be continuing, may require
that such Relevant Lender transfer all of its right, title and
interest under this Agreement to any bank or other financial
institution identified by the Company that is satisfactory to the
Agent, in its discretion reasonably exercised (a "Proposed
Lender") if (i) such Proposed Lender agrees to assume all of the
obligations of such Relevant Lender hereunder, and to purchase
all of such Relevant Lender's Loans hereunder for consideration
equal to the aggregate outstanding principal amount of such
Relevant Lender's Loans, together with interest thereon to the
date of such purchase, and satisfactory arrangements are made for
payment to such Relevant Lender of all other amounts payable
hereunder to such Relevant Lender on or prior to the date of such
transfer (including any fees accrued hereunder and any amounts
that would be payable under Section 5.05 hereof as if all of such
Relevant Lender's Loans were being prepaid in full on such date)
and (ii) such Relevant Lender has requested compensation pursuant
to Section 5.01, 5.06 or 5.07 hereof, such Proposed Lender's
aggregate requested compensation, if any, paid pursuant to
Section 5.01, 5.06 or 5.07 hereof with respect to such Relevant
Lender's Loans is lower than that of the Relevant Lender.
Subject to the provisions of Section 12.06(b) hereof, such
Proposed Lender shall be a "Lender" for all purposes hereunder.
Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements of the Company contained in
Sections 5.01, 5.06, 5.07 and 12 hereof (without duplication of
any payments made to such Relevant Lender by the company or the
Proposed Lender) shall survive for the benefit of such Relevant
Lender under this Section 5.08 with respect to the time prior to
such replacement.
Section 6. Guarantee.
6.01 The Guarantee. The Guarantor hereby guarantees
to each Lender and the Agent and their respective successors and
assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and
interest on the Loans made by the Lenders to the Company and all
other amounts from time to time owing to the Lenders or the Agent
by the Company under this Agreement and by the Company under any
of the other Basic Documents, and all obligations of the Company
to any Lender in respect of any Interest Rate Protection
Agreement, in each case strictly in accordance with the terms
thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). The Guarantor hereby further agrees
that if the Company shall fail to pay in full when due (whether
at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Guarantor will promptly pay the same,
without any demand or notice whatsoever, and that in the case of
any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or
renewal.
6.02 Obligations Unconditional. The obligations of
the Guarantor under Section 6.01 hereof are absolute and
unconditional irrespective of the value, genuineness, validity,
regularity or enforceability of the obligations of the Company
under this Agreement or any other agreement or instrument
referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this
Section 6.02 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing,
it is agreed that the occurrence of any one or more of the
following shall not alter or impair the liability of the
Guarantor hereunder which shall remain absolute and unconditional
as described above:
(i) at any time or from time to time, without notice
to the Guarantor, the time for any performance of or
compliance with any of the Guaranteed Obligations shall be
extended, or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions
of this Agreement or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations
shall be modified, supplemented or amended in any respect,
or any right under this Agreement or any other agreement or
instrument referred to herein or therein shall be waived or
any other guarantee of any of the Guaranteed Obligations or
any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in
favor of, the Agent or any Lender or Lenders as security for
any of the Guaranteed Obligations shall fail to be
perfected.
The Guarantor hereby expressly waives diligence, presentment,
demand of payment, protest and all notices whatsoever, and any
requirement that the Agent or any Lender exhaust any right, power
or remedy or proceed against the Company under this Agreement or
any other agreement or instrument referred to herein or therein,
or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
6.03 Reinstatement. The obligations of the Guarantor
under this Section 6 shall be automatically reinstated if and to
the extent that for any reason any payment by or on behalf of any
Obligor in respect of the Guaranteed Obligations is rescinded or
must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise and the Guarantor agrees that it
will indemnify the Agent and each Lender on demand for all
reasonable costs and expenses (including, without limitation,
fees of counsel) incurred by the Agent or such Lender in
connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or
similar law.
6.04 Subrogation. The Guarantor hereby waives, until
payment in full of the Guaranteed Obligations, all rights of
subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right
arising under the Bankruptcy Code) or otherwise by reason of any
payment by it pursuant to the provisions of this Section 6.
6.05 Remedies. The Guarantor agrees that, as between
the Guarantor and the Lenders, the obligations of the Company
under this Agreement may be declared to be forthwith due and
payable as provided in Section 10 hereof (and shall be deemed to
have become automatically due and payable in the circumstances
provided in said Section 10) for purposes of Section 6.01 hereof
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company and that,
in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall
forthwith become due and payable by the Guarantor for purposes of
said Section 6.01.
6.06 Continuing Guarantee. The guarantee in this
Section 6 is a continuing guarantee, and shall apply to all
Guaranteed Obligations whenever arising.
Section 7. Conditions Precedent.
7.01 Effectiveness. The effectiveness of this
Agreement (and the amendment and restatement of the Existing
Credit Agreement to be effected hereby) is subject to the receipt
by the Agent of the following documents, each of which shall be
satisfactory to the Agent (and to the extent specified below, to
each Lender) in form and substance:
(a) Corporate Documents. The following documents,
each certified as indicated below:
(i) for each of Lagasse, the Company and the
Guarantor, a copy of the charter (or equivalent
documents) certified as of a date reasonably close to
the Effective Date by the Secretary of State of
Delaware, Illinois or Louisiana, as the case may be,
and a certificate from such Secretary of State dated as
of a date reasonably close to the Effective Date as to
the good standing of and charter documents filed by
such Person;
(ii) for each of Lagasse, the Company and the
Guarantor, a certificate of the Secretary or an
Assistant Secretary of such Person, dated the Effective
Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws of such Person as
amended and in effect at all times from the date on
which the resolutions referred to in clause (B) were
adopted, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board
of directors of such Person authorizing the execution,
delivery and performance of such of the Basic Documents
to which such Person is or is intended to be a party
and the extensions of credit hereunder, and that such
resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the
charter of such Person had not been amended since the
date of the certification thereto furnished pursuant to
clause (i) above, and (D) as to the incumbency and
specimen signature of each officer of such Person
executing such of the Basic Documents to which such
Person is intended to be a party and each other
document to be delivered by such Person from time to
time in connection therewith (and the Agent and each
Lender may conclusively rely on such certificate until
it receives notice in writing from such Person); and
(iii) for each of Lagasse, the Company and the
Guarantor, a certificate of another officer of such
Person, dated the Effective Date, as to the incumbency
and specimen signature of the Secretary or Assistant
Secretary, as the case may be, of such Person at the
time of execution of the certificate referred to in
clause (ii) above.
(b) Officer's Certificate. A certificate of a senior
officer or Responsible Officer of the Guarantor, dated the
Effective Date, to the effect set forth in clauses (a) and
(b) of Section 7.02 hereof.
(c) Opinions of Counsel to the Obligors. Opinions,
dated the Effective Date, of (i) the General Counsel of the
Guarantor, substantially in the form of Exhibit E-1 hereto
and covering such other matters as the Agent or any Lender
may reasonably request (and each Obligor hereby instructs
such counsel to deliver such opinion to the Lenders and the
Agent) and (ii) Phelps Dunbar, special Louisiana counsel to
the Obligors, substantially in the form of Exhibit E-2
hereto and covering such other matters as the Agent or any
Lender may reasonably request (and each Obligor hereby
instructs such counsel to deliver such opinion to the
Lenders and the Agent).
(d) Opinion of Special New York Counsel to the Agent.
An opinion, dated the Effective Date, of Milbank, Tweed,
Hadley & McCloy, special New York counsel to the Agent,
substantially in the form of Exhibit F hereto.
(e) Security Agreement. The Security Agreement, duly
executed by the Company and the Agent.
(f) Pledge Agreement. The Pledge Agreement, duly
executed by the Guarantor and the Agent.
(g) Lagasse Acquisition. Certified copies of the
Purchase Agreement and evidence that (i) the Purchase
Agreement shall have been duly authorized, executed and
delivered by the parties thereto and remains in full force
and effect and has not been amended as of the Effective
Date, (ii) all material governmental approvals and material
third-party consents and approvals (if any) in connection
with the Lagasse Acquisition have been obtained and remain
in effect and all applicable waiting periods have expired
without any action being taken by any competent authority
that restricts, prevents or imposes materially adverse
conditions upon the making or consummation of the Lagasse
Acquisition and (iii) the Lagasse Acquisition shall have
been consummated in accordance with the Purchase Agreement.
(h) Lagasse Guarantee and Security Agreement. The
Lagasse Guarantee and Security Agreement, substantially in
the form of Exhibit B-2 hereto duly executed and delivered
by Lagasse. In addition, the Company shall have taken such
other action (including, without limitation, delivering to
the Agent, (i) Uniform Commercial Code (or equivalent
Louisiana statute) searches for Lagasse for each
jurisdiction in which Lagasse conducts its business or in
which any of its respective Properties are located (or
otherwise as the Agent may reasonably request) and (ii) for
filing, appropriately completed and duly executed copies of
Uniform Commercial Code financing statements (or equivalent
Louisiana filings)) as the Agent shall have requested in
order to perfect the security interests created pursuant to
the Lagasse Guarantee and Security Agreement.
(i) Pledge of Lagasse Shares. The certificates
representing 100% of the issued and outstanding shares of
capital stock of Lagasse (as purchased by the Company under
the Purchase Agreement) accompanied by undated stock powers
executed in blank. In addition, the Agent shall have
received a copy of each agreement, certificate, opinion of
counsel and other material writing delivered by or on behalf
of each party to the Purchase Agreement in connection with
the closing of the Lagasse Acquisition, and a letter from
the Person delivering such opinion authorizing reliance
thereon by the Agent and the Lenders.
(j) UCC, Tax Lien and Judgment Searches. Reports
satisfactory to the Lenders listing the results of filing,
tax lien and judgment searches prepared by one or more firms
satisfactory to the Agent with respect to Lagasse in each of
the jurisdictions deemed relevant by the Agent.
(k) Environmental Assessment. An environmental
assessment of all real Property owned or leased by Lagasse
which will be covered by a Mortgage pursuant to Section
9.24(d) hereof in form and substance reasonably satisfactory
to the Majority Lenders.
(l) Solvency Certificates. A certificate of a
Responsible Officer of each of the Guarantor and the
Company, dated the Effective Date, to the effect that, as of
the Effective Date and after giving effect to the Lagasse
Acquisition, the borrowings contemplated hereunder in the
full amount of the Commitments and the other transactions
contemplated hereby, neither Obligor, on a stand-alone or
consolidated basis, (i) will be insolvent or will be
rendered insolvent by the Indebtedness incurred in
connection therewith, (ii) will be left with unreasonably
small capital with which to conduct its business operations
as heretofore conducted, (iii) will have incurred debts
beyond its ability to pay such debts as they mature.
(m) Repayment of Existing Indebtedness. Evidence that
the principal of and interest on, and all other amounts
owing in respect of, the Indebtedness of Lagasse (including,
without limitation, any contingent or other amounts payable
in respect of letters of credit) indicated on Schedule I
hereto that is to be repaid on the Effective Date shall have
been (or shall be simultaneously) paid in full, that any
commitments to extend credit under the agreements or
instruments relating to such Indebtedness shall have been
canceled or terminated and that all Guarantees in respect
of, and all Liens securing, any such Indebtedness shall have
been released (or arrangements for such release satisfactory
to the Majority Lenders shall have been made); in addition,
the Agent shall have received from any Person holding any
Lien securing any such Indebtedness, such Uniform Commercial
Code termination statements, mortgage releases and other
instruments, in each case in proper form for recording, as
the Agent shall have requested to release and terminate of
record the Liens securing such Indebtedness (or arrangements
for such release and termination satisfactory to the
Majority Lenders shall have been made).
(n) Litigation. A certificate of a senior officer of
each of the Company and Lagasse to the effect that there
exists (i) no judgment, order, injunction or other restraint
issued or filed which prohibits the making of the Loans or
the consummation of the Lagasse Acquisition, (ii) no action,
suit, litigation, or similar proceeding at law or in equity
or by or before any court or governmental or regulatory
authority with respect to the Lagasse Acquisition or the
financing thereof and (iii) no actions, suits or proceedings
pending or threatened with respect to any such party that
could reasonably be expected to have a Material Adverse
Effect.
(o) Margin Regulations. Evidence satisfactory to the
Lenders that neither the making of Loans hereunder nor the
use of the proceeds thereof will violate Regulation G, U or
X.
(p) Contracts. Copies of all material contracts of
Lagasse including, without limitation, all material supply
and purchase contracts of Lagasse involving more than 5% of
the supplies to or purchases of Lagasse.
(q) Other Documents. Such other documents as the
Agent or any Lender or special New York counsel to the Agent
reasonably request.
7.02 Initial and Subsequent Extensions of Credit. The
obligation of the Lenders to make any Loan or otherwise extend
any credit to either Obligor upon the occasion of each borrowing
or other extension of credit hereunder (including the initial
borrowings and continuation of the Term Loans and the Revolving
Credit Loans contemplated to occur on the Effective Date) is
subject to the further conditions precedent that, both
immediately prior to the making of such Loan or other extension
of credit and also after giving effect thereto and to the
intended use thereof:
(a) no Default shall have occurred and be continuing;
(b) the representations and warranties made by each
Obligor in Section 8 hereof and in each other Basic Document
to which such Obligor is a party, shall be true and complete
in all material respects on and as of the date of the making
of such Loan or other extension of credit (and after giving
effect thereto) with the same force and effect as if made on
and as of such date (or, if any such representation or
warranty is expressly stated to have been made as of a
specific date, as of such specific date); and
(c) to the extent there are Revolving Credit Loans or
Swingline Loans outstanding, the aggregate principal amount
of the Revolving Credit Loans and Swingline Loans together
with the aggregate amount of all Letter of Credit
Liabilities shall not exceed the Borrowing Base reflected on
the most recent Borrowing Base Certificate delivered
pursuant to Section 9.01(g) hereof (or, prior to delivery of
the first such certificate, Section 9.01(g) of the Existing
Credit Agreement).
Each notice of borrowing or request for the issuance of a Letter
of Credit by the Company hereunder shall constitute a
certification by the Company to the effect set forth in the
preceding sentence (both as of the date of such notice or request
and, unless the Company otherwise notifies the Agent prior to the
date of such borrowing or issuance, as of the date of such
borrowing or issuance).
Section 8. Representations and Warranties. Each
Obligor represents and warrants to the Agent and the Lenders
that:
8.01 Corporate Existence. Each Obligor and its
Subsidiaries (including, for purposes of this Section 8.01,
Lagasse): (a) is a corporation, partnership or other entity duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its organization; (b) has all requisite
corporate or other power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed
to be conducted; and (c) is qualified to do business and is in
good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and
where failure so to qualify could (either individually or in the
aggregate) reasonably be expected to have a Material Adverse
Effect.
8.02 Financial Condition. (a) The Obligors have
heretofore furnished to each of the Lenders the following:
(i) the balance sheet of Lagasse as at December 31,
1995 and the related statements of income, retained earnings
and cash flows of Lagasse for the fiscal year ended on said
date, with the opinion thereon of LaPorte Sehrt Romig & Hand
and the unaudited balance sheet of Lagasse as at June 30,
1996 and the related statements of income, retained earnings
and cash flows of Lagasse for the six-month period ended on
such date; and
(ii) the consolidated balance sheet of the Guarantor
and its Subsidiaries as at December 31, 1995 and the related
consolidated statements of income, changes in stockholders'
investment and cash flows of the Guarantor and its
Subsidiaries for the fiscal year ended on said date, with
the opinion thereon of Ernst & Young LLP, and the unaudited
consolidated balance sheet of the Guarantor and its
Subsidiaries as at June 30, 1996 and the related
consolidated statements of income, changes in stockholders'
investment and cash flows of the Guarantor and its
Subsidiaries for the six-month period ended on such date.
(b) The financial statements referred to in clause (a)
above fairly present, in all material respects, the consolidated
financial position of Lagasse or the Guarantor and its
Subsidiaries, as the case may be, as at said dates and the
consolidated results of their respective operations for the
fiscal years and periods ended on said dates, in accordance with
generally accepted accounting principles and practices applied on
a consistent basis (subject, in the case of the June 30, 1996
financial statements, to year-end audit adjustments). None of
the Guarantor or its Subsidiaries or Lagasse has on the date
hereof any material contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in said balance sheets
as at said dates. Since June 30, 1996, there has been no
material adverse change in the consolidated financial condition,
operations, business or prospects taken as a whole of the
Guarantor and its Subsidiaries or Lagasse from that set forth in
said financial statements as at said respective dates.
8.03 Litigation. Except as disclosed to the Lenders
in Schedule V hereto, there are no legal or arbitral proceedings,
or any proceedings by or before any governmental or regulatory
authority or agency, now pending or (to the knowledge of any
Obligor) threatened against either Obligor or any of its
Subsidiaries (including, for purposes of this Section 8.03,
Lagasse) that, if adversely determined, could (either
individually or in the aggregate) reasonably be expected to have
a Material Adverse Effect.
8.04 No Breach. None of the making or performance of
this Agreement and the other Transaction Documents, the
consummation of the transactions herein and therein contemplated
or compliance with the terms and provisions hereof and thereof
will conflict with or result in a breach of, or require any
consent not already obtained under, the charter or by-laws of
either Obligor or any of its Subsidiaries (including, for
purposes of this Section 8.04, Lagasse), or any applicable law or
regulation, or any order, writ, injunction or decree of any court
or governmental authority or agency, or any material agreement or
instrument to which either Obligor or any such Subsidiary is a
party or by which any of them or any of their Property is bound
or to which any of them is subject, or constitute a default under
any such agreement or instrument, or (except for the Liens
created pursuant to the Security Documents) result in the
creation or imposition of any Lien upon any Property of either
Obligor or any such Subsidiary pursuant to the terms of any such
agreement or instrument.
8.05 Action. Each Obligor and each of its
Subsidiaries (including, for purposes of this Section 8.05,
Lagasse) has all necessary corporate power, authority and legal
right to execute, deliver and perform its obligations hereunder
and under each of the other Transaction Documents to which it is
a party; the execution, delivery and performance by each Obligor
and each such Subsidiary of each of the Transaction Documents to
which it is a party have been duly authorized by all necessary
corporate action on its part (including, without limitation, any
required shareholder approvals); and this Agreement has been duly
and validly executed and delivered by such Obligor and (assuming
the due authorization, execution and delivery thereof by the
Agent, the Lenders and the other parties (other than an Obligor)
thereto) constitutes, and each of the other Transaction Documents
to which it is a party when executed and delivered by such
Obligor or such Subsidiary will constitute, its legal, valid and
binding obligation, enforceable against such Obligor and/or such
Subsidiary, as the case may be, in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganiza
tion, moratorium or similar laws relating to or affecting the
rights of creditors generally and except as such enforceability
may be limited by the application of general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
8.06 Approvals. Other than the Notification and
Report Form in respect of the Lagasse Acquisition furnished to
the Department of Justice and the Federal Trade Commission
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (which Notification and Report Form has been duly given and
all applicable waiting periods have been terminated without any
action having been taken by any competent authority that
restricts, prevents or imposes conditions upon the Lagasse
Acquisition), no authorizations, approvals or consents not
already duly obtained of, and no filings or registrations with,
any governmental or regulatory authority or agency, or any
securities exchange, are necessary for the execution, delivery or
performance by either Obligor or any of its Subsidiaries of the
Transaction Documents to which it is a party or for the legality,
validity or enforceability hereof or thereof, except for
(i) filings and recordings in respect of the Liens created
pursuant to the Security Documents and (ii) immaterial state and
municipal licenses such as business licenses, food sales
establishment licenses, required registrations with state revenue
departments and other similar ministerial licenses.
8.07 Use of Credit. Neither Obligor nor any of its
Subsidiaries (including, for purposes of this Section 8.07,
Lagasse) is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying
Margin Stock. At the time of the making of any of the Term
Loans, the Revolving Credit Loans or the Swingline Loans, not
more than 25% of the value of the assets of either Obligor is
represented by Margin Stock. Neither the making of any of the
Loans hereunder nor the use of the proceeds thereof will violate
or be inconsistent with the provisions of Regulation G, U, or X.
8.08 ERISA. Each Plan and, to the knowledge of the
Company, each Multiemployer Plan, is in compliance in all
material respects with, and has been administered in all material
respects in compliance with, the applicable provisions of ERISA,
the Code and any other Federal or State law, and no event or
condition has occurred and is continuing as to which either
Obligor would be under an obligation to furnish a report to the
Lenders under Section 9.01(f) hereof. As of the date of this
Agreement, and for the year preceding the date of this Agreement,
neither Obligor nor, prior to the Lagasse Acquisition, Lagasse,
has contributed to any Multiemployer Plan.
8.09 Taxes. Except as set forth on Schedule VIII, the
Guarantor and its Subsidiaries are members of an affiliated group
of corporations filing consolidated returns for Federal income
tax purposes, of which the Guarantor is the "common parent"
(within the meaning of Section 1504 of the Code) of such group.
Except as set forth on Schedule VIII hereto, the Guarantor and
its Subsidiaries (including, for all purposes of this
Section 8.09 other than the first sentence hereof, Lagasse) have
filed all Federal income tax returns and all other material tax
returns that are required to be filed by them and have paid all
taxes due pursuant to such returns or pursuant to any assessment
received by the Guarantor or any such Subsidiary, except for any
such tax the payment of which is being contested in good faith
and by proper proceedings and against which adequate reserves are
being maintained, provided that no such tax is being contested on
the Effective Date. The charges, accruals and reserves on the
books of the Guarantor and its Subsidiaries in respect of taxes
and other governmental charges are, in the opinion of the
Guarantors, adequate. Except as set forth in Schedule VIII
hereto, neither the Guarantor nor any of its Subsidiaries has
given or been requested to give a waiver of the statute of
limitations relating to the payment of any Federal, state, local
and foreign taxes or other impositions.
8.10 Investment Company Act. Neither the Guarantor
nor any of its Subsidiaries (including, for purposes of this
Section 8.10, Lagasse) is an "investment company", or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
8.11 Public Utility Holding Company Act. Neither the
Guarantor nor any of its Subsidiaries (including, for purposes of
this Section 8.11, Lagasse) is a "holding company", or an
"affiliate" of a "holding company" or a "subsidiary company" of a
"holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
8.12 Material Agreements and Liens.
(a) Parts A and B of Schedule I hereto are a complete
and correct list of each credit agreement, loan agreement,
indenture, purchase agreement, guarantee, letter of credit or
other arrangement providing for or otherwise relating to
Indebtedness of the Guarantor and its Subsidiaries and Lagasse
outstanding on the date hereof, or that after giving effect to
the Lagasse Acquisition will be outstanding on the Effective
Date, and the aggregate principal or face amount outstanding or
that may become outstanding under each such arrangement is
correctly described in Parts A and B of said Schedule I.
(b) Part C of Schedule I hereto is a complete and
correct list of each Lien securing Indebtedness of any Person
outstanding on the date hereof, or that (after giving effect to
the transactions contemplated to occur on or before the Effective
Date) will be outstanding on the Effective Date, the aggregate
principal or face amount of which equals or exceeds (or may equal
or exceed) $10,000 and covering any Property of the Guarantor or
any of its Subsidiaries, and the aggregate Indebtedness secured
(or which may be secured) by each such Lien and the Property
covered by each such Lien is correctly described in Part C of
said Schedule I.
8.13 Environmental Matters. Except as set forth on
Schedule II hereto,
(a) Each of the Guarantor and its Subsidiaries
(including for all purposes of this Section 8.13, Lagasse)
has obtained all environmental, health and safety permits,
licenses and other authorizations required under all
Environmental Laws (collectively, "Environmental Permits")
to carry on its business as now being or as proposed to be
conducted, except to the extent failure to have any such
Environmental Permit would not (either individually or in
the aggregate) have a Material Adverse Effect. Each of such
Environmental Permits is in full force and effect and each
of the Guarantor and its Subsidiaries is in compliance with
the terms and conditions thereof, and is also in compliance
with all other applicable Environmental Laws, decrees,
judgments, and injunctions, except to the extent failure to
comply therewith would not (either individually or in the
aggregate) have a Material Adverse Effect.
(b) No notice, notification, demand, request for
information, citation, summons or order is pending, no
complaint is pending, no penalty has been assessed and is
outstanding and no investigation or review is pending or, to
the Guarantor's knowledge, threatened by any governmental or
other entity with respect to any alleged failure by the
Guarantor or any of its Subsidiaries to have any
Environmental Permit or with respect to any generation,
treatment, storage, recycling, transportation or any Release
of any Hazardous Materials generated by the Guarantor or any
of its Subsidiaries that could reasonably be expected to
result in a liability in excess of $10,000.
(c) Neither the Guarantor nor any of its respective
Subsidiaries owns, operates or leases a treatment, storage
or disposal facility requiring a permit under the Resource
Conservation and Recovery Act of 1976, as amended, or under
any comparable state or local statute.
(d) There is not now nor, to the Guarantor's
knowledge, has there been in the past any PCBs, asbestos
containing materials ("ACMs"), surface impoundments or
underground storage tanks at any real Property now or, to
the Guarantor's knowledged, previously owned, operated or
leased by the Guarantor or any of its Subsidiaries, the
presence of which could reasonably be expected to result in
a liability in excess of $10,000.
(e) No Hazardous Materials have been otherwise
Released at, on or under any site or facility now or
previously owned, operated or leased by the Guarantor or any
of its Subsidiaries that would (either individually or in
the aggregate) have a Material Adverse Effect.
(f) Neither the Guarantor nor any of its Subsidiaries
has received a notice alleging that it is a potentially
responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), listed for possible inclusion on the National
Priorities List ("NPL") by the Environmental Protection
Agency in the Comprehensive Environmental Response and
Liability Information System, as provided for by
40 C.F.R. 300.5 ("CERCLIS"), or on any similar state or
local list.
(g) No written notification of a Release of a
Hazardous Material has been filed by or on behalf of the
Guarantor or any of its Subsidiaries and no site or facility
now or, to the Guarantor's knowledge, previously owned,
operated or leased by the Guarantor or any of its
Subsidiaries is listed or proposed for listing on the NPL,
CERCLIS or any similar state list of sites requiring
investigation or clean-up.
(h) No Liens exist under or pursuant to any
Environmental Laws on any real Property owned or operated by
the Guarantor or any of its Subsidiaries, and no government
action has been taken or is in process that could subject
any such site or facility to such Liens and, to the best
knowledge of the Guarantor, neither the Guarantor nor any of
its Subsidiaries would be required to place any notice or
restriction relating to the presence of Hazardous Materials
at any site or facility owned by it in any deed to the real
Property on which such site or facility is located.
(i) All environmental investigations, studies, audits,
tests, reviews or other analyses conducted by or that are in
the possession of the Guarantor or any of its Subsidiaries
in relation to facts, circumstances or conditions at or
affecting any site or facility now or previously owned,
operated or leased by the Guarantor or any of its
Subsidiaries and that could result in a Material Adverse
Effect have been made available to the Lenders.
8.14 Capitalization.
(a) Schedule VI hereto correctly sets forth the
authorized capital stock of the Guarantor and the capital stock
and equity securities owned of record as of the date hereof.
(b) On the date hereof, the authorized capital stock
of the Company consists of an aggregate of 890,000 shares of
$1.00 par value common stock. All of the issued and outstanding
shares of the Company on such date and at such time will be duly
and validly issued, fully paid and nonassessable. As of such
date and time, all of such shares will be owned beneficially and
of record by the Guarantor and (x) there will be no outstanding
Equity Rights with respect to the Company and (y) there will be
no outstanding obligations of the Company or the Guarantor or any
of their Subsidiaries to repurchase, redeem, or otherwise acquire
any shares of capital stock of the Company nor will there be any
outstanding obligations of the Company or the Guarantor or any of
their Subsidiaries to make payments to any Person, such as
"phantom stock" payments, where the amount thereof is calculated
with reference to the fair market value or equity value of the
Company or any of its Subsidiaries.
(c) On the date hereof, the authorized capital stock
of Lagasse consists of an aggregate of 2,088 shares of common
stock. All of the issued and outstanding shares of Lagasse on
such date and at such time will be duly and validly issued, fully
paid and nonassessable. As of such date and time, all of such
shares will be owned beneficially and of record by the Company
and (x) there will be no outstanding Equity Rights with respect
to Lagasse and (y) there will be no outstanding obligations of
the Company or the Guarantor or any of their Subsidiaries to
repurchase, redeem, or otherwise acquire any shares of capital
stock of Lagasse nor will there be any outstanding obligations of
the Company or the Guarantor or any of their Subsidiaries to make
payments to any Person, such as "phantom stock" payments, where
the amount thereof is calculated with reference to the fair
market value or equity value of Lagasse.
8.15 Subsidiaries, Etc.
(a) On the date hereof, Lagasse has no Subsidiaries.
Part A of Schedule III hereto sets forth all Subsidiaries of the
Guarantor as of the date hereof.
(b) Set forth in Part B of Schedule III hereto is a
complete and correct list of all Investments held by the
Guarantor or any of its Subsidiaries or Lagasse on the date
hereof, and, for each such Investment, (x) the identity of the
Person or Persons holding such Investment and (y) the nature of
such Investment. Except as disclosed in Schedule III hereto,
each of the Guarantor, such Subsidiaries and Lagasse owns on the
date hereof, free and clear of all Liens (other than Liens
created pursuant to the Security Documents), all such
Investments.
8.16 Title to Assets. Except as disclosed in the
footnote under the heading "Real Property Interests" in
Schedule IV hereto, each of the Guarantor and its Subsidiaries
and Lagasse owns and has on the date hereof good and marketable
title (subject only to Liens permitted by Section 9.06 hereof) to
the Properties shown to be owned in the most recent financial
statements referred to in Section 8.02 hereof (other than
Properties disposed of in the ordinary course of business or
otherwise permitted to be disposed of pursuant to Section 9.05
hereof). Each of the Guarantor and its Subsidiaries and Lagasse
owns and has on the date hereof, good and marketable title to,
and enjoys peaceful and undisturbed possession of, all Properties
(subject only to Liens permitted by Section 9.06 hereof) that are
necessary for the operation and conduct of its businesses.
8.17 True and Complete Disclosure. The information,
reports, financial statements, exhibits and schedules furnished
in writing by or on behalf of the Obligors to the Agent or any
Lender in connection with the negotiation, preparation or
delivery of this Agreement and the other Basic Documents or
included herein or therein or delivered pursuant hereto or
thereto, when taken as a whole, do not contain any untrue
statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
All written information furnished after the date hereof by the
Guarantor or any of its Subsidiaries to the Agent and the Lenders
in connection with this Agreement and the other Basic Documents
and the transactions contemplated hereby and thereby will be
true, complete and accurate in every material respect, or (in the
case of projections) based on estimates deemed in good faith to
be reasonable, on the date as of which such information is stated
or certified. There is no fact known to either Obligor that
could reasonably be expected to have a Material Adverse Effect
that has not been disclosed herein, in the other Basic Documents
or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Lenders for
use in connection with the transactions contemplated hereby or
thereby.
8.18 Real Property. Set forth on Schedule IV hereto
under the heading "Real Property Interests of Lagasse" is a list,
as of the date hereof and after giving effect to Lagasse
Acquisition of all of the real Property interests held by
Lagasse, indicating in each case whether the respective Property
is owned or leased, the identity of the owner or lessee and the
location of the respective Property.
8.19 Security Documents. The Security Documents
create, as security for the obligations purported to be secured
thereby, a valid and enforceable perfected interest in and Lien
on all of the Properties covered thereby in favor of the Agent,
superior to and prior to the right of all third Persons and
subject to no other Liens (other than Permitted Liens).
Section 9. Covenants of the Obligors. Each Obligor
covenants and agrees with the Lenders and the Agent that, so long
as any Commitment, Loan or Letter of Credit Liability is
outstanding and until payment in full of all amounts payable by
the Obligors hereunder:
9.01 Financial Statements, Etc. The Company (for
itself and on behalf of the Guarantor) shall deliver to each of
the Lenders:
(a) as soon as available and in any event within
30 days after the end of each month (other than March, June,
September and December), consolidated statements of income,
retained earnings and cash flows of the Guarantor and its
Subsidiaries for such period and for the period from the
beginning of the respective fiscal year to the end of such
period, and the related consolidated balance sheet as at the
end of such period, setting forth in each case in com
parative form the corresponding consolidated figures for the
corresponding periods in the preceding fiscal year;
(b) as soon as available and in any event within
45 days after the end of the first three quarterly fiscal
periods of each fiscal year of the Guarantor, consolidated
statements of income, retained earnings and cash flows of
the Guarantor and its Subsidiaries for such period and for
the period from the beginning of the respective fiscal year
to the end of such period, and the related consolidated
balance sheet as at the end of such period, setting forth in
each case in comparative form (i) the corresponding
consolidated figures for the corresponding periods in the
preceding fiscal year and (ii) the corresponding consoli
dated projected figures contained in the business plan
furnished under Section 9.01(h) hereof in respect of such
fiscal period (or in the quarterly business plan of the
Guarantor heretofore delivered to the Agent), accompanied by
a certificate of a Responsible Officer of the Guarantor,
which certificate shall (A) state that said consolidated
financial statements present fairly, in all material
respects, the consolidated financial position and results of
operations of the Guarantor and its Subsidiaries, in each
case in accordance with generally accepted accounting
principles, consistently applied, as at the end of, and for,
such period (subject to normal year-end audit adjustments
and excluding any footnotes thereto) and (B) contain an
explanation of any deviations in the results of operations
shown on such financial statements from the projected
figures contained in such business plan along with a
description of the action that either Obligor has taken or
proposes to take with respect to any adverse deviations, if
any;
(c) as soon as available and in any event within
90 days after the end of each fiscal year of the Guarantor,
consolidated statements of income, retained earnings and
cash flows of the Guarantor and its Subsidiaries, for such
fiscal year and the related consolidated balance sheet as at
the end of such fiscal year, setting forth in each case in
comparative form (i) the corresponding consolidated figures
for the preceding fiscal year and (ii) the corresponding
consolidated projected figures contained in the business
plan furnished under Section 9.01(h) hereof in respect of
such fiscal year (or in the quarterly business plan of the
Guarantor heretofore delivered to the Agent) and accompanied
by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion
shall state that said consolidated financial statements
present fairly, in all material respects, the consolidated
financial position and results of operations of the
Guarantor and its Subsidiaries as at the end of, and for,
such fiscal year in accordance with generally accepted
accounting principles, and a certificate of such accountants
stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically
stated, of any Default under any of Sections 9.09 through
9.14 hereof;
(d) promptly upon their becoming available, copies of
all registration statements and regular periodic reports and
other material reports, if any, which either Obligor shall
have filed with the Commission (or any governmental agency
substituted therefor) or any national securities exchange;
(e) promptly upon the mailing thereof to the
shareholders of either Obligor generally, copies of all
financial statements, reports and proxy statements so
mailed;
(f) as soon as possible, and in any event within
21 days after either Obligor knows or has reason to believe
that any of the events or conditions specified below with
respect to any Plan or Multiemployer Plan has occurred or
exists, a statement signed by a Responsible Officer of the
Company setting forth details respecting such event or
condition and the action, if any, that such Obligor or its
ERISA Affiliate proposes to take with respect thereto (and a
copy of any report or notice required to be filed with or
given to PBGC by such Obligor or an ERISA Affiliate with
respect to such event or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which PBGC
has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within
30 days of the occurrence of such event (provided that
a failure to meet the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA,
including, without limitation, the failure to make on
or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA,
shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the
Code); and any request for a waiver under
Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of
ERISA of a notice of intent to terminate any Plan or
any action taken by either Obligor or an ERISA
Affiliate to terminate any Plan if the assets of such
Plan are insufficient to provide in full for all of the
benefit liabilities under such Plan as contemplated by
Section 4041(b) of ERISA;
(iii) the institution by PBGC of proceedings
under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan,
or the receipt by either Obligor or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action
has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal from
a Multiemployer Plan by either Obligor or any
ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation
to satisfy secondary liability as a result of a
purchaser default) or the receipt by either Obligor or
any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of
ERISA;
(v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against either
Obligor or any ERISA Affiliate to enforce Section 515
of ERISA, which proceeding is not dismissed within
30 days;
(vi) the adoption of an amendment to any Plan
that, pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA, would result in the loss of
tax-exempt status of the trust of which such Plan is a
part if either Obligor or an ERISA Affiliate fails to
timely provide security to the Plan in accordance with
the provisions of said Sections; and
(vii) the existence of any event or
circumstance which may reasonably be expected to
constitute grounds for either Obligor Company or any
ERISA Affiliate to incur liability under Section 4062,
4063, 4064 or 4069 of ERISA;
(g) as soon as available and in any event within
seven Business Days after the end of each month, a Borrowing
Base Certificate as at the last day of such month;
(h) no later than 15 days prior to the end of the
fiscal year of the Company, a quarterly business plan
covering the next succeeding year, in form and substance
satisfactory to the Majority Lenders (and, if requested by
the Majority Lenders prior to such date, an annual business
plan for the succeeding five-year period);
(i) as soon as available after the end of the first
and second six-month period in any fiscal year of the
Company, and at such other times as the Agent or the
Majority Revolving Credit Lenders may request, a report of
an independent collateral auditing agent ("Collateral
Auditing Agent") (which shall be satisfactory to the
Majority Revolving Credit Lenders in their reasonable
determination and which may be, or be affiliated with, one
of the Lenders and whose annual fees and expenses will not
exceed $40,000 plus reasonable out-of-pocket expenses) with
respect to, but not restricted to, the Receivables and
Inventory components included in the Borrowing Base as at
the end of such six-month period which report shall indicate
that, based upon a review by the Collateral Auditing Agent
of the Receivables (including, without limitation,
verification with respect to the amount, aging, identity and
credit of the respective account debtors and the billing
practices of the Company and Lagasse) and Inventory
(including, without limitation, verification as to the
value, location and respective types), the information set
forth in the Borrowing Base Certificate delivered by the
Company as at the end of such six-month period is accurate
and complete in all material respects and in addition, as
soon as available and in any event within 90 days after the
end of each fiscal year of the Company, a like report of
independent certified public accountants with respect to the
Receivables and Inventory components included in the
Borrowing Base as at the end of such fiscal year;
(j) promptly after becoming aware thereof, written
notice of (i) the assertion of any Environmental Claim by
any Person against, or with respect to the activities of,
the Guarantor or any of its Subsidiaries and notice of any
alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or
authorizations, other than any Environmental Claims or
alleged violations which, if adversely determined, would not
have a Material Adverse Effect, (ii) any Environmental
Claim, inquiry, proceeding, investigation, or other action,
including a notice from any governmental authority of
potential environmental liability, or any Federal, state or
local environmental agency or board, that involves any
collateral security for the Loans or the Lenders' rights
with respect to any such collateral security, and (iii) any
Release of a non-de minimus quantity of Hazardous Materials
at any site or facility of the Guarantor or any Subsidiary;
(k) promptly after either Obligor knows or has reason
to believe that any Default has occurred, a notice of such
Default describing the same in reasonable detail and,
together with such notice or as soon thereafter as
reasonably possible, a description of any action that either
Obligor has taken or proposes to take with respect thereto;
and
(l) from time to time such other information regarding
the financial condition, operations, business or prospects
of the Guarantor or any of its Subsidiaries (including,
without limitation, any Plan or Multiemployer Plan and any
reports or other information required to be filed under
ERISA) as any Lender or the Agent may reasonably request.
The Company will furnish to each Lender, at the time it furnishes
each set of financial statements pursuant to paragraph (b) or (c)
above, a certificate of a Responsible Officer of the Company
(i) to the effect that, to the best of such Responsible Officer's
knowledge, no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in
reasonable detail and describing any action that either Obligor
has taken or proposes to take with respect thereto), (ii) setting
forth in reasonable detail the computations necessary to
determine whether the Obligors are in compliance with Sections
9.09 through 9.14 (inclusive) and 9.22 hereof as of the end of
the respective quarterly fiscal period or fiscal year and (iii)
setting forth in reasonable detail the Pricing Leverage Ratio as
of the end of the respective quarterly fiscal period or fiscal
year.
9.02 Litigation. Promptly upon becoming aware
thereof, the Company (for itself and on behalf of the Guarantor
and its Subsidiaries) will promptly give to each Lender notice of
all legal or arbitral proceedings, and of all proceedings by or
before any governmental or regulatory authority or agency, and
any material development in respect of such legal or other
proceedings, affecting the Guarantor or any of its Subsidiaries,
except proceedings that, if adversely determined, could not
(either individually or in the aggregate) reasonably be expected
to have a Material Adverse Effect.
9.03 Existence, Etc. The Guarantor will, and will
cause each of its Subsidiaries to:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
(provided that nothing in this Section 9.03 shall prohibit
any transaction expressly permitted under Section 9.05
hereof);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such
requirements could (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect;
(c) pay and discharge all material taxes, assessments
and governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the
date on which penalties attach thereto, except for any such
tax, assessment, charge or levy the payment of which is
being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained;
(d) maintain all of its Properties used or useful in
its business in good working order and condition, ordinary
wear and tear excepted;
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with
generally accepted accounting principles consistently
applied; and
(f) permit representatives of any Lender or the Agent,
during normal business hours, to examine, copy and make
extracts from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with its
officers and independent certified public accountants, all
to the extent reasonably requested by such Lender or the
Agent (as the case may be).
9.04 Insurance. The Guarantor will, and will cause
each of its Subsidiaries to, keep insured by financially sound
and reputable insurers all Property of a character usually
insured by corporations engaged in the same or similar business
similarly situated against loss, damage and liability of the
kinds and in the amounts customarily insured against by such
corporations, provided that in any event the Company will
maintain (with respect to itself and each of its Subsidiaries)
insurance against such risks and on such terms as the insurance
evidenced by the certificates delivered on the Initial Borrowing
Date pursuant to Section 7.01(s) of the Existing Credit Agreement
and such other insurance as may be reasonably requested by the
Majority Lenders.
Such insurance shall be written by financially
responsible companies selected by the Company, duly licensed to
do business in the states in which the relevant facilities are
located and having an A. M. Best rating of "A-" or better and
being in a financial size category of VIII or larger, or by other
companies acceptable to the Agent. The policies for any casualty
insurance required hereunder shall either name or contain an
endorsement naming the Agent as first mortgagee and loss payee
under a first mortgage clause or endorsement without contribution
substantially equivalent to the New York standard first mortgage
clause of endorsement. Each policy referred to in this
Section 9.04 shall provide that it will not be canceled or
reduced, or allowed to lapse without renewal, except after not
less than 30 days' notice to the Agent and shall also provide
that the interests of the Agent and the Lenders shall not be
invalidated by any act or negligence of the Obligor or any Person
having an interest in any Property covered by the Mortgage nor by
occupancy or use of any such Property for purposes more hazardous
than permitted by such policy nor by any foreclosure or other
proceedings relating to such Property and shall otherwise be in
form and substance satisfactory to each Lender. The Company will
advise the Agent promptly of any policy cancellation, reduction
or amendment.
By October 31 of each year, the Company will deliver to
the Agent the certificates of insurance evidencing that all
insurance required to be maintained by the Company hereunder will
be in effect for the 12 months beginning after the immediately
succeeding November 1, subject only to the payment of premiums as
they become due. The Company will not obtain or carry separate
insurance concurrent in form or contributing in the event of loss
with that required by this Section 9.04 unless the Agent, on
behalf of the Lenders, is named as first mortgagee and loss payee
as provided herein. The Company will immediately notify the
Agent whenever any such separate insurance is obtained and shall
deliver to the Agent the certificates evidencing the same.
Without limiting the obligations of the Company under
the foregoing provisions of this Section 9.04, in the event the
Company shall fail to maintain in full force and effect insurance
as required by the foregoing provisions of this Section 9.04,
then the Agent may, but shall have no obligation so to do,
procure insurance covering the interests of the Lenders and the
Agent in such amounts and against such risks as the Agent (or the
Majority Lenders) shall deem appropriate, and the Company shall
reimburse the Agent in respect of any premiums paid by the Agent
in respect thereof.
9.05 Prohibition of Fundamental Changes. The
Guarantor will not, nor will it permit any of its Subsidiaries
to, enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution).
The Guarantor will not, nor will it permit any of its
Subsidiaries to, acquire any business or Property from, or
capital stock of, or be a party to any acquisition of, any Person
except for (i) the Lagasse Acquisition, (ii) purchases of
inventory and other Property to be sold or used in the ordinary
course of business, (iii) Investments permitted under
Section 9.08 hereof, (iv) Capital Expenditures permitted under
Section 9.14 hereof and (v) Permitted Acquisitions; provided that
after giving effect to any such Permitted Acquisition, and after
giving Pro Forma Effect thereto, no Default shall have occurred
and be continuing.
The Guarantor will not, nor will it permit any of its
Subsidiaries to, convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, any
part of its business or Property, whether now owned or hereafter
acquired, including, without limitation, receivables and
leasehold interests, but excluding (i) obsolete or worn-out
Property, tools or equipment no longer used or useful in its
business, (ii) any inventory or other Property sold or disposed
of in the ordinary course of business and on ordinary business
terms, (iii) any Part A Property sold or disposed of for fair
value, (iv) any Part B Property sold or disposed of within one
year prior to or after the Disposition of any Part A Property
located in the same geographical area if the proceeds thereof are
applied as provided in Section 2.10(e) hereof, (v) shares in
United Business Computers, Inc. to be transferred as described in
Schedule III hereto and (vi) other Properties sold for fair value
provided that at least 85% of the proceeds of each such sale
shall be received in cash and the aggregate Net Available
Proceeds received from the sale of such Properties and all other
Properties sold pursuant to this clause (vi) shall not exceed
$15,000,000. Notwithstanding the foregoing provisions of this
Section 9.05:
(a) any Subsidiary of the Company may be merged or
consolidated with or into: (i) the Company if the Company
shall be the continuing or surviving corporation or (ii) any
other such Subsidiary; provided that (x) if any such
transaction shall be between a Subsidiary and a Wholly-Owned
Subsidiary, the Wholly-Owned Subsidiary shall be the
continuing or surviving corporation;
(b) any Subsidiary of the Company may sell, lease,
transfer or otherwise dispose of any or all of its Property
(upon voluntary liquidation or otherwise) to the Company or
a Wholly-Owned Subsidiary of the Company;
(c) the Company and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary
course of business, receivables more than 90 days overdue
and arising in the ordinary course of business, but only in
connection with the compromise or collection thereof
consistent with customary industry practice (and not as part
of any bulk sale or financing of receivables);
(d) the Company and its Subsidiaries may transfer
condemned Property to the respective governmental authority
or agency that has condemned the same (whether by deed in
lieu of condemnation or otherwise), and may transfer
Properties that have been subject to a casualty to the
respective insurer (or its designee) of such Property as
part of an insurance settlement;
(e) the Company and its Subsidiaries may license or
sublicense software, trademarks, and other intellectual
property in the ordinary course of business which do not
materially interfere with the business of the Company or any
Subsidiary; and
(f) the Company and its Subsidiaries may enter into
consignment arrangements (as consignor or consignee) or
similar arrangements for the sale of goods in the ordinary
course of business and consistent with the past practices of
the Company and its Subsidiaries.
9.06 Limitation on Liens. The Guarantor will not, nor
will it permit any of its Subsidiaries to, create, incur, assume
or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens in existence on the date hereof and
(i) listed in Part C of Schedule I hereto or (ii) listed in
any policy of title insurance delivered under the Existing
Credit Agreement;
(c) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or that are being
contested in good faith and by appropriate proceedings if,
unless the amount thereof is not material with respect to it
or its financial condition, adequate reserves with respect
thereto are maintained on the books of the Guarantor or the
affected Subsidiaries, as the case may be, in accordance
with GAAP;
(d) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, landlord's or other like Liens
arising in the ordinary course of business that are not
overdue for a period of more than 30 days or that are being
contested in good faith and by appropriate proceedings and
Liens securing judgments but only to the extent for an
amount and for a period not resulting in an Event of Default
under Section 10(h) hereof;
(e) pledges or deposits under worker's compensation,
unemployment insurance and other social security
legislation;
(f) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(g) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
easements, licenses, restrictions on the use of Property,
encroachments, protrusions or minor imperfections in title
thereto that, in the aggregate, are not material in amount,
and that do not in any case materially detract from the
value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(h) Liens on Property of any corporation that becomes
a Subsidiary of the Guarantor after the Effective Date;
provided that such Liens are in existence at the time such
corporation becomes a Subsidiary of the Guarantor and were
not created in anticipation thereof;
(i) Liens upon Property acquired after the date hereof
(by purchase, construction or otherwise) by the Company or
any of its Subsidiaries, each of which Liens either
(A) existed on such Property before the time of its
acquisition and was not created in anticipation thereof or
(B) was created within 120 days of the acquisition or
completion of construction of such Property solely for the
purpose of securing Indebtedness representing, or incurred
to finance, refinance or refund, the cost (including the
cost of construction) of such Property; provided that (i) no
such Lien shall extend to or cover any Property of the
Company or such Subsidiary other than the Property so
acquired and improvements thereon and (ii) the principal
amount of Indebtedness secured by any such Lien shall at no
time exceed 100% of the fair market value (as determined in
good faith by a Responsible Officer of the Company) of such
Property at the time it was acquired (by purchase,
construction or otherwise);
(j) Liens in respect of Capital Lease Obligations to
the extent permitted by Sections 9.07 and 9.14 hereof;
(k) Liens securing the obligations of the Company
under Interest Rate Protection Agreements permitted by
Section 9.08(i) hereof;
(l) licenses, leases or subleases granted to others in
the ordinary course of business not materially interfering
with the conduct of the business of the Company and its
Subsidiaries taken as a whole;
(m) statutory and contractual landlords' liens under
leases to which the Company or any of its Subsidiaries is a
party;
(n) any interest or title of a lessor, sublessor,
licensee or licensor under any lease or license agreement
permitted by this Agreement;
(o) Liens in favor of a banking institution arising as
a matter of law encumbering deposits (including the right of
set-off) held by such banking institutions incurred in the
ordinary course of business and which are within the general
parameters customary in the banking industry;
(p) Liens in favor of customs and revenue authorities
arising as a matter of law to secure the payment of customs'
duties in connection with the importation of goods; and
(q) any extension, renewal or replacement of the
foregoing, provided, however, that the Liens permitted
hereunder shall not be spread to cover any additional
Indebtedness or Property (other than a substitution of like
Property).
9.07 Indebtedness. The Guarantor will not, nor will
it permit any of its Subsidiaries to, create, incur or suffer to
exist any Indebtedness except:
(a) Indebtedness to the Lenders hereunder and under
the other Basic Documents;
(b) the Guarantor Note and other Indebtedness
outstanding on the date hereof and listed in Schedule I
hereto;
(c) Indebtedness of any Wholly-Owned Subsidiary of the
Company (i) to the Company in an aggregate unpaid principal
amount of not more than $25,000,000, in the case of Lagasse,
or $1,500,000, in the case of any other such Wholly-Owned
Subsidiary or (ii) to any other Wholly-Owned Subsidiary of
the Company;
(d) Indebtedness of the Company to any Wholly-Owned
Subsidiary of the Guarantor provided that all such
Indebtedness is subordinate on terms satisfactory to the
Majority Lenders to the Indebtedness to the Lenders
hereunder and under the other Basic Documents and is
evidenced by an intercompany promissory note which is
pledged to the Agent as collateral;
(e) Indebtedness of the Company or any Subsidiary as a
guarantor of the lessee under any lease pursuant to which
the Company or any Subsidiary of the Company is a lessee so
long as such lease is otherwise permitted hereunder;
(f) Indebtedness incurred on or after the Revolving
Credit Commitment Termination Date and after the payment in
full of all Revolving Credit Loans and all Letter of Credit
Liabilities for working capital or other general corporate
purposes of the Company and/or its Subsidiaries not to
exceed $300,000,000 in the aggregate and on terms
satisfactory to the Majority Lenders in their reasonable
discretion; and
(g) Indebtedness of the Company and its Subsidiaries
incurred after the Effective Date (including, without
limitation, Capital Lease Obligations and other Indebtedness
secured by Liens permitted under Sections 9.06(i) or 9.06(j)
hereof) up to but not exceeding, in the case of the Company,
$20,000,000 (less the amount of any outstanding Indebtedness
incurred since the Initial Borrowing Date by the Company or
any of its Subsidiaries that would not qualify as
Indebtedness under clauses (a) through (h) of Section 9.07
of the Existing Credit Agreement) and, in the case of any
Subsidiary of the Company, $500,000, at any one time
outstanding.
9.08 Investments. The Guarantor will not, nor will it
permit any of its Subsidiaries to, make or permit to remain
outstanding any Investments except:
(a) the Guarantor Note and other Investments
outstanding on the date hereof and identified in
Schedule III hereto;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Guarantor in the Company;
(e) Customer advances not to exceed $250,000 in the
aggregate at any one time outstanding;
(f) travel and relocation loans and advances to
employees in the ordinary course of business not to exceed
$1,000,000 in the aggregate at any one time outstanding;
(g) deposits permitted by Section 9.06(f) hereof;
(h) Investments received in settlement of defaulted
Receivables or in connection with the bankruptcy or
reorganization of suppliers and customers and in connection
with the settlement of other disputes with customers and
suppliers arising in the ordinary course of business;
(i) Interest Rate Protection Agreements, required by
Section 9.15 hereof;
(j) intercompany loans to the extent permitted by
Section 9.07(c) or (d) hereof;
(k) Permitted Acquisitions; and
(l) additional Investments up to but not exceeding
$1,000,000 in the aggregate less any Investment made by the
Guarantor or any of its Subsidiaries since the Initial
Borrowing Date that does not otherwise qualify as an
Investment under clauses (b) through (k) of Section 9.08 of
the Existing Credit Agreement.
9.09 Dividend Payments. (a) The Company will not,
nor will it permit any of its Subsidiaries to, declare or make
any Dividend Payment at any time; provided, however, that (1) any
Subsidiary of the Company may make any Dividend Payment to the
Company or any Wholly-Owned Subsidiary of the Company and (2) the
Company may declare and make Dividend Payments in cash in respect
of its common stock (i) to enable the Guarantor to pay any
income, franchise or like taxes to the extent permitted by the
Tax Sharing Agreement, (ii) to enable the Guarantor to pay its
operating expenses incurred in the ordinary course of business
and other corporate overhead costs and expenses (including,
without limitation, legal, accounting, reporting, listing and
similar expenses) in an aggregate amount not in excess of
$750,000 in any fiscal year, (iii) to enable the Guarantor to
acquire shares of capital stock to distribute to directors,
officers and other employees pursuant to employee benefit plans,
(iv) to enable the Guarantor to make cash payments of dividends
in respect of the Guarantor Preferred Stock or to pay Accrued
Warrant Liabilities, and (v) to enable the Guarantor to
repurchase its common stock from former employees of the Company
for an aggregate purchase price of no more than $600,000 in any
12-month period, subject, in the case of clauses (iii), (iv) and
(v) above, to the satisfaction of the following conditions on the
date of such Dividend Payment and after giving effect thereto and
to the application of any Excess Cash Flow then required to be
applied pursuant to Section 2.10(c) hereof:
(1) no Default shall have occurred and be
continuing;
(2) the Fixed Charges Ratio as at the last
day of the fiscal quarter of the Company most recently
ended prior to the date of such Dividend Payment shall
not be less than 1.2 to 1;
(3) the aggregate amount of such Dividend
Payments made in cash in any fiscal year of the Company
shall not exceed an amount equal to 25% of the Excess
Cash Flow for the fiscal year of the Company most
recently ended prior to the date of such Dividend
Payment;
(4) the average, for the immediately
preceding 90 days, of the excess of (i) the lesser of
(x) the Borrowing Base and (y) the aggregate Revolving
Credit Commitments over (ii) the sum of the outstanding
principal amount of Revolving Credit Loans, and the
Swingline Loans and the aggregate amount of Letter of
Credit Liabilities shall be an amount at least equal to
$50,000,000; and
(5) at least 10 Business Days (but not more
than 20 Business Days) prior to the date of each such
Dividend Payment, the Company shall have delivered to
each Lender a certificate of a Responsible Officer of
the Company stating that, both before and after giving
effect to the Dividend Payment to be made, no Default
exists and demonstrating compliance with the conditions
set forth in clauses (2), (3) and (4) of this
Section 9.09(a).
(b) The Guarantor will not declare or make any
Dividend Payment except (i) (subject to paragraph (c) below)
regularly scheduled Dividend Payments in respect of Guarantor
Preferred Stock and payments of Accrued Warrant Liabilities,
(ii) repurchases of common stock of the Guarantor from former
employees of the Company for an aggregate purchase price of no
more than $600,000 in any 12-month period, (iii) repurchases of
common stock of the Guarantor to distribute to directors,
officers and other employees pursuant to employee benefit plans,
(iv) repurchases of fractional shares of the common stock of the
Guarantor, provided the aggregate purchase price of all such
fractional shares so repurchased under this clause (iv) since the
Initial Borrowing Date does not exceed $10,000, (v) repurchases
of shares of the common stock of the Guarantor held by
shareholders holding fewer than 100 such shares provided the
aggregate purchase price of all such shares so repurchased under
this clause (v) since the Initial Borrowing Date does not exceed
$150,000 and (vi) the redemption of the Guarantor's Series A
Preferred Stock and/or Series C Preferred Stock in accordance
with Section 9.09(d).
(c) The Guarantor will not make any Dividend Payment
in respect of Guarantor Preferred Stock in cash, except to the
extent that the Company would then be permitted under
Section 9.09(a) hereof to make Dividend Payments in cash to the
Guarantor to fund the same or as is contemplated by Section
9.09(d).
(d) Notwithstanding anything to the contrary in this
Section 9.09 or Section 2.10(d) or (g) or 9.16, the Guarantor may
use the Net Available Proceeds of the Primary Offering to redeem
in whole or in part its Series A Preferred Stock and/or Series C
Preferred Stock to the extent set forth below, if, and only if,
the Net Available Proceeds from the Primary Offering are applied
as follows:
(i) First, an amount of such Net Available
Proceeds equal to (but not exceeding) $77,875,000 may
be applied at the discretion of the Obligors to the
partial or full redemption of the Guarantor's Series A
Preferred Stock and/or Series C Preferred Stock
(including the payments of all accrued dividends
thereon) and to the redemption of the Senior
Subordinated Notes in accordance with the Indenture
(and the payment of any premium on such Senior
Subordinated Notes due under such Indenture in
connection with such redemption); provided that (A) at
least $56,375,000 of such Net Available Proceeds must
be applied to such redemption of the Senior
Subordinated Notes (and the payment of any such premium
thereon) prior to the redemption of any of the
Guarantor's Series A Preferred Stock or Series C
Preferred Stock, (B) no more than $21,500,000 of such
Net Available Proceeds may be used to redeem any such
Series A Preferred Stock or Series C Preferred Stock,
(C) prior to redeeming such Series A Preferred Stock or
Series C Preferred Stock, the Guarantor shall have
received all applicable consents thereto, (D) any such
Series A Preferred Stock or Series C Preferred Stock so
redeemed shall be immediately retired, (E) such
redemption shall have taken place not more than 60 days
after the Guarantor has committed to such redemption
and (F) at the time the Guarantor shall have committed
to any such redemption, no Default shall have occurred
and be continuing; and
(ii) Second, the remaining amount of such
Net Available Proceeds in excess of $50,000 (including
any portion of the $77,875,000 available under the
preceding clause (i) to redeem the preferred stock of
the Guarantor and/or repurchase the Senior Subordinated
Notes that is not so applied) shall be applied to the
prepayment of the Term Loans pro rata between each
Class of Term Loans and, as to each Class, pro rata to
the remaining installments thereof; and
(iii) Finally, any such Net Available
Proceeds remaining thereafter may be used for general
corporate purposes.
9.10 Net Worth. The Guarantor will not permit Net
Worth to be less than the sum of (a) $70,000,000 plus (b) 75% of
the sum of Net Income (if positive) for each fiscal quarter of
the Guarantor commencing with the first full fiscal quarter
occurring after the Initial Borrowing Date plus (c) 100% of the
amount by which Net Worth shall have been increased as a result
of the Primary Offering minus (d) $3,750,000.
9.11 Debt to Cash Flow Ratio. The Guarantor will not
permit the Debt to Cash Flow Ratio to exceed the following
respective amounts at any time during the following respective
periods:
Period Ratio
From the date hereof
through December 30, 1996 5.25 to 1
From December 31, 1996
through June 29, 1997 5.00 to 1
From June 30, 1997
through December 30, 1997 4.75 to 1
From December 31, 1997
through December 30, 1998 4.50 to 1
From December 31, 1998
through December 30, 1999 4.00 to 1
From December 31, 1999
through December 30, 2000 3.75 to 1
From December 31, 2000
through December 30, 2001 3.50 to 1
From December 31, 2001 3.25 to 1
9.12 Fixed Charges Ratio. The Guarantor will not
permit the Fixed Charges Ratio to be less than the following
respective amounts at any time during the following respective
periods:
Period Ratio
From the date hereof
through December 30, 1998 1.05 to 1
From December 31, 1998
and thereafter 1.10 to 1
9.13 Interest Coverage Ratio. The Guarantor will not
permit the Interest Coverage Ratio to be less than the following
respective amounts at any time during the following respective
periods:
Period Ratio
From the date hereof
through December 30, 1998 2.00 to 1
From December 31, 1998
and thereafter 2.50 to 1
9.14 Capital Expenditures. (a) The Company will not
permit the aggregate amount of Capital Expenditures by the
Company and its Subsidiaries to exceed $15,000,000 in any fiscal
year.
(b) Notwithstanding anything to the contrary contained
in paragraph (a) above, to the extent that the aggregate amount
of Capital Expenditures made by the Company and its Subsidiaries
in any fiscal year are less than $15,000,000, the amount of such
difference may be carried forward to the next succeeding fiscal
year and used to make Capital Expenditures in such immediately
succeeding fiscal year of the Company; provided that in no event
may any such amount carried forward from a fiscal year exceed
$15,000,000 minus the amount of Capital Expenditures made by the
Company and its Subsidiaries in such fiscal year.
(c) In addition to the Capital Expenditures permitted
pursuant to the preceding paragraphs (a) and (b), the Company and
its Subsidiaries may make additional Capital Expenditures as
follows: (i) Capital Expenditures consisting of a reinvestment
of the Net Available Proceeds of any asset sales not required to
be applied to prepay the Loans pursuant to Section 2.10(e)
hereof; (ii) Capital Expenditures consisting of the reinvestment
of that portion of Excess Cash Flow generated during the prior
fiscal year and not required to be applied to prepay the Loans
pursuant to Section 2.01(c) hereof; (iii) the reinvestment of
insurance or condemnation proceeds payable by reason of theft,
loss, physical destruction or damage or any similar event or as a
result of condemnation or deed in lieu thereof and (iv) the
purchase price paid by the Guarantor or any of its Subsidiaries
in respect of Permitted Acquisitions.
9.15 Interest Rate Protection Agreements. The Company
will by March 31, 1997 effect one or more Interest Rate
Protection Agreements with one or more of the Lenders that
effectively enables the Company (in a manner satisfactory to the
Agent), as at any date, to protect itself against three-month
London interbank offered rates exceeding 8% per annum as to a
notional principal amount at least equal to $150,000,000 for a
period of at least three years after the Effective Date and shall
maintain such Interest Rate Protection Agreements in full force
and effect throughout such period.
9.16 Subordinated Indebtedness. The Guarantor will
not, nor will it permit any of its Subsidiaries to purchase,
redeem, retire or otherwise acquire for value, or set apart any
money for a sinking, defeasance or other analogous fund for the
purchase, redemption, retirement or other acquisition of, or make
any voluntary payment or prepayment of the principal of or
interest on, or any other amount owing in respect of, any
Subordinated Indebtedness, except for (i) regularly scheduled
payments or prepayments of principal and interest in respect
thereof required pursuant to the instruments evidencing such
Subordinated Indebtedness and (ii) the repayment of the Senior
Subordinated Notes from the Net Available Proceeds of the Primary
Offering, provided such Net Available Proceeds are applied in
accordance with Section 9.09(d) hereof.
9.17 Lines of Business. The Guarantor will not, nor
will it permit any of its Subsidiaries (including, without
limitation, the Company) to, engage to any substantial extent in
any line or lines of business activity other than the business of
the wholesale distribution and selling of office products,
computers, computer products, janitorial supplies and similar
products and the provision of fulfillment services.
9.18 Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Guarantor will not,
nor will it permit any of its Subsidiaries to, directly or
indirectly: (a) make any Investment in an Affiliate;
(b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; (c) merge into or consolidate with or
purchase or acquire Property from an Affiliate; or (d) enter into
any other transaction (other than the payment of Sponsor
Management Fees permitted by Section 9.22 hereof) directly or
indirectly with or for the benefit of an Affiliate (including,
without limitation, Guarantees and assumptions of obligations of
an Affiliate); provided that (x) any Affiliate who is an
individual may serve as a director, officer, employee or
consultant of the Guarantor or any of its Subsidiaries and
receive reasonable compensation for his or her services in such
capacity and (y) the Company and its Subsidiaries may enter into
transactions (other than extensions of credit by the Company or
any of its Subsidiaries to an Affiliate) providing for the
leasing of Property, the rendering or receipt of services or the
purchase or sale of inventory and other Property in the ordinary
course of business if the monetary or business consideration
arising therefrom would be substantially as advantageous to the
Company and its Subsidiaries as the monetary or business
consideration that would obtain in a comparable transaction with
a Person not an Affiliate.
9.19 Use of Proceeds.
(a) The Company will use the proceeds of the Term
Loans (to the extent in excess of the Term Loans continued from
the Existing Credit Agreement) and the Revolving Credit Loans
solely (i) to consummate the Lagasse Acquisition, (ii) to
refinance certain existing Indebtedness of Lagasse listed in
Schedule I hereto, (iii) to make Permitted Acquisitions from time
to time not exceeding in the aggregate $25,000,000 and (iv) and
for general corporate purposes of the Company and its
Subsidiaries; provided that no such proceeds may be contributed
to Lagasse and may only be loaned by the Company to Lagasse
pursuant to an open account advance not evidenced by any
negotiable instrument (a "Lagasse Advance").
(b) The use of the proceeds of the Loans by the
Company shall be in compliance with all applicable legal and
regulatory requirements, including, without limitation,
Regulations G, U and X, the Securities Act of 1933, as amended,
and the Exchange Act and the regulations thereunder; provided
that neither the Agent nor any Lender shall have any
responsibility as to the use of any of such proceeds.
9.20 Modifications of Certain Documents. (a) Without
the prior consent of the Agent (with the approval of the Majority
Lenders), neither Obligor will consent to any modification,
supplement or waiver of (i) any of the provisions of the Senior
Subordinated Debt Documents (except any supplemental indenture
contemplated by Section 1017(a) or (c) of the Indenture) or (ii)
the Guarantor Preferred Stock or the Warrant Agreement to the
extent such modification, supplement or waiver would increase the
amount of regularly scheduled Dividend Payments in respect of
Guarantor Preferred Stock or the amount of Accrued Warrant
Liabilities.
(b) The Guarantor will not take any action to modify
or supplement the Articles of Incorporation of the Company, other
than modifications that do not adversely affect the interests of
the Lenders, without the prior approval of the Majority Lenders.
9.21 Ownership of the Company. The Guarantor will at
all times hold not less than 100% of the issued and outstanding
capital stock of the Company.
9.22 Management Fees, Etc. (a) Neither Obligor will
pay to any Sponsor any management, consultant, financial advisor,
director or similar fees ("Sponsor Management Fees"), except that
the Obligors may pay (1) Sponsor Management Fees of not more than
$70,834 in any month (the "Monthly Management Fees") plus (2) up
to an additional $150,000 of Sponsor Management Fees for any
fiscal year (the "Annual Management Fee") if, giving effect to
the payment of all Monthly Management Fees and to the payment of
such Annual Management Fee (solely for which purpose such Annual
Management Fee shall be deemed to have been paid in such fiscal
year), EBITDA of the Company for such fiscal year is not less
than EBITDA of the Company as set forth opposite such fiscal year
in Schedule VII hereto; provided that no Annual Management Fee
for any fiscal year shall be paid until each Lender has received
the financial statements of the Company for such fiscal year
required to be delivered to such Lender pursuant to Section
9.01(c) hereof; and provided, further, that, in any event, no
Annual Management Fee shall be paid if, at the time of such
payment and after giving effect thereto, any Event of Default
shall have occurred and be continuing; and provided, further,
that any Annual Management Fees that shall not be paid because of
the occurrence and continuance of any Event of Default shall
continue to accrue.
(b) Neither Obligor nor any of its Subsidiaries shall
pay any severance payments or fees or other amounts to any
officer or director of Lagasse in connection with or as a result,
directly or indirectly, of the Lagasse Acquisition except
pursuant to a schedule delivered to the Agent prior to the
Effective Date and in form and substance satisfactory to the
Agent.
9.23 Taxes; Tax Sharing Agreement. The Guarantor and
its Subsidiaries will file consolidated Federal income tax
returns. Prior to filing any Federal income tax returns or
paying any Federal income tax after the Lagasse Acquisition,
Lagasse will become a party to the tax allocation agreement (the
"Tax Sharing Agreement") among the Guarantor and its
Subsidiaries.
9.24 Subsidiary Guarantors; Additional Mortgaged
Property.
(a) In the event that the Guarantor shall, after the
Effective Date, directly or indirectly hold or acquire any
Domestic Subsidiary, the Company will notify the Lenders (through
the Agent) and will, and will cause each of its other
Subsidiaries to, cause such Domestic Subsidiary (i) to execute
and deliver a written guarantee of the Guaranteed Obligations and
a security agreement in substantially the form of Exhibit B-2
hereto, mutatis mutandis, (ii) at the request of the Majority
Lenders, to enter into a Mortgage covering all of the interests
in material real Property owned by such Domestic Subsidiary and
(iii) to deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as are
consistent with those delivered by the Company pursuant to
Section 7.01 hereof on the Initial Borrowing Date or as the Agent
shall have reasonably requested.
(b) If (x) the Company repays any Indebtedness
described in any of items 1 and 3 of Part C of Schedule I hereto
or (y) the Company or any of its Subsidiaries acquires or leases
any material real Property after the Effective Date, other than
any real Property encumbered by Liens permitted by Section
9.06(i) hereof, the Company or such Subsidiary will promptly
execute a Mortgage covering the Property securing such repaid
Indebtedness or such newly-acquired Property, as the case may be,
together with such surveys, title insurance policies and
endorsements, certificates of occupancy and such other
agreements, estoppels and consents (including agreements with
lessors) as the Agent may reasonably require. In addition, at
the request of the Agent, the Company shall, or shall cause
Lagasse to, execute a Mortgage covering any Property that is
owned or leased by Lagasse on the date hereof for which a
Mortgage was not delivered on the Effective Date, together with
such surveys, title insurance policies and endorsements,
certificates of occupancy and such other agreements, estoppels
and consents (including agreements with lessors) as the Agent may
reasonably require with respect to such Property and which are
available upon the exercise by the Company and Lagasse of
commercially reasonable efforts.
(c) The Company will (i) prior to November 10, 1996,
execute and deliver to the Agent an amendment or other
modification to each Mortgage covering Property of the Company
located in any of the States of Colorado, Florida (other than the
leasehold property of the Company in Florida), Louisiana,
Michigan, New Jersey, New York, North Carolina and Ohio and (ii)
cause the applicable title company to, prior to January 31, 1997,
deliver to the Agent endorsements of the mortgagee policies of
title insurance delivered by such title company under the
Existing Credit Agreement (or, if such endorsements are not
available, new mortgage policies of title in sequence) with
respect to Properties covered by the Mortgages (other than any
such Properties located in the State of Texas and the leasehold
Property of the Company located in the State of Florida) each
such amendment or modification and endorsement to be in form and
substance satisfactory to the Agent.
(d) The Company will cause Lagasse to execute and
deliver, prior to November 10, 1996, a Mortgage covering the real
Property of Lagasse located at 1525 Kuebel Street, New Orleans,
La., as identified under the heading "Mortgages" in Schedule IV
hereto, in each case duly executed and delivered by Lagasse in
recordable form (and in such number of copies as the Agent shall
have reasonably requested).
9.25 Termination of ERISA Plans. The Company will not
and will not permit any Subsidiary to withdraw from any
Multiemployer Plan or permit any employee benefit plan maintained
by it to be terminated if such withdrawal or termination could
result in withdrawal liability (as described in Part 1 of
Subtitle E of Title IV of ERISA) or the imposition of a Lien on
any Property of the Company or any Subsidiary pursuant to
Section 4068 of ERISA.
9.26 Limitations on Restrictions. The Guarantor will
not and will not permit any of its Subsidiaries to enter into any
agreement or arrangement that would prohibit, prevent or
otherwise limit or impede the Guarantor or such Subsidiary from
encumbering any of its respective assets for the benefit of the
Lenders (other than any such assets subject to a Lien permitted
by Section 9.06(i) or (j)).
Section 10. Events of Default. If one or more of the
following events (herein called "Events of Default") shall occur
and be continuing:
(a) Either Obligor shall (i) default in the payment
when due (whether at stated maturity or upon mandatory or
optional prepayment) of any principal of any Loan or any
Reimbursement Obligation or (ii) default in the payment when
due of any interest on any Loan or any Reimbursement
Obligation or any fee or any other amount payable by it
hereunder or under any other Basic Document and such default
shall continue unremedied for three or more Business Days;
or
(b) Either Obligor or any of their respective
Subsidiaries (the Obligors and such Subsidiaries herein
collectively called the "Relevant Parties") shall default in
the payment when due of any principal of or interest on any
of its Indebtedness aggregating $5,000,000 or more, or in
the payment when due of any amount under any Interest Rate
Protection Agreement for a notional principal amount
exceeding $5,000,000; or any event specified in any note,
agreement, indenture or other document evidencing or
relating to any such Indebtedness or any event specified in
any Interest Rate Protection Agreement shall occur if the
effect of such event is to cause, or (with the giving of any
notice or the lapse of time or both) to permit the holder or
holders Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, Indebtedness to become
due, or to be prepaid in full (whether by redemption,
purchase, offer to purchase or otherwise), prior to its
stated maturity or to have the interest rate thereon reset
to a level so that securities evidencing such Indebtedness
trade at a level specified in relation to the par value
thereof or, in the case of an Interest Rate Protection
Agreement, to permit the payments owing under such Interest
Rate Protection Agreement to be liquidated; or
(c) Any representation, warranty or certification made
or deemed made herein or in any Transaction Document
hereunder or any Transaction Document as defined in the
Existing Credit Agreement (or in any modification or
supplement hereto or thereto) by any party thereto, or any
certificate furnished to any Lender or the Agent pursuant to
the provisions of any Basic Document, shall prove to have
been false or misleading as of the time made or furnished in
any material respect; or
(d) The Company, the Guarantor or Lagasse (as
applicable) shall default in the performance of any of its
obligations under any of Sections 9.01(g), 9.01(k), 9.05
through 9.16, inclusive, 9.18 through 9.22, inclusive, and
9.26 hereof or either the Company or the Guarantor shall
default in the performance of any of its obligations under
Section 4.02, 5.02 or 5.07 of the Security Agreement or the
equivalent provisions under the Lagasse Guarantee and
Security Agreement, Section 4.02 or 4.07 of the Pledge
Agreement or any provisions of any Mortgage (or any Domestic
Subsidiary shall default in the performance of its
obligations under the equivalent provisions in any Guarantee
and Security Agreement delivered pursuant to Section 9.24
hereof); or any Obligor shall default in the performance of
any of its other obligations in this Agreement or any other
Basic Document and such default shall continue unremedied
for a period of ten or more days after notice thereof to the
Company by the Agent or any Lender (through the Agent); or
(e) Any Relevant Party shall admit in writing its
inability to, or be generally unable to, pay its debts as
such debts become due; or
(f) Any Relevant Party shall (i) apply for or consent
to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, examiner or liquidator of
itself or of all or a substantial part of its Property,
(ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the
Bankruptcy Code, (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code
or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or
(g) A proceeding or case shall be commenced, without
the application or consent of the affected Relevant Party,
in any court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or
winding-up, or the composition or readjustment of its debts,
(ii) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of such Relevant Party or
of all or any substantial part of its Property or
(iii) similar relief in respect of such Relevant Party under
any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order for
relief against any Relevant Party shall be entered in an
involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of
money in excess of $5,000,000 in the aggregate (exclusive of
judgment amounts fully covered by insurance where the
insurer has admitted liability in respect of such judgment)
shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction against any
Relevant Party and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay
of execution thereof shall not be procured, within 30 days
from the date of entry thereof and such Relevant Party shall
not, within said period of 30 days, or such longer period
during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be
stayed during such appeal; or
(i) An event or condition specified in Section 9.01(f)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or
condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur
or in the reasonable opinion of the Majority Lenders shall
be reasonably likely to incur a liability to a Plan, a
Multiemployer Plan or the PBGC (or any combination of the
foregoing) that, in the determination of the Majority
Lenders, could (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect; or
(j) A reasonable basis shall exist for the assertion
against the Company or any of its Subsidiaries, or any
predecessor in interest of the Company or any of its
Subsidiaries or Affiliates, of (or there shall have been
asserted against the Company or any of its Subsidiaries) an
Environmental Claim that, in the judgment of the Majority
Lenders is reasonably likely to be determined adversely to
the Company or any of its Subsidiaries, and the amount
thereof (either individually or in the aggregate) is
reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by the Company or any of its
Subsidiaries but after deducting any portion thereof that is
reasonably expected to be paid by other creditworthy Persons
jointly and severally liable therefor); or
(k) Any Change of Control shall have occurred; or
(l) Except for expiration in accordance with its terms
or a voluntary release by the Agent on behalf of the Agent
and the Lenders, the Liens created by the Security Documents
shall at any time not constitute a valid and perfected Lien
on the collateral intended to be covered thereby (to the
extent perfection by filing, registration, recordation or
possession is required herein or therein) in favor of the
Agent, free and clear of all other Liens (other than Liens
permitted under Section 9.06 hereof or under the respective
Security Documents), or, except for expiration in accordance
with its terms, any of the Security Documents shall for
whatever reason be terminated or cease to be in full force
and effect, or the enforceability thereof shall be contested
by either Obligor or Lagasse;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 10 with respect
to any Obligor, the Agent shall, at the direction of the Majority
Lenders (or, with respect to Swingline Loans, upon request of the
Swingline Lender), by notice to the Obligors, terminate the
Commitments and/or declare the principal amount then outstanding
of, and the accrued interest on, the Loans (including the
Swingline Loans), the Reimbursement Obligations and all other
amounts payable by the Obligors hereunder (including, without
limitation, any amounts payable under Section 5.05 or 5.06
hereof) to be forthwith due and payable (provided that if so
requested by the Majority Revolving Credit Lenders, the Agent
shall terminate the Revolving Credit Commitments), whereupon such
amounts shall be immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which
are hereby expressly waived by each Obligor; and (2) in the case
of the occurrence of an Event of Default referred to in
clause (f) or (g) of this Section 10 with respect to any Obligor,
the Commitments shall automatically be terminated and the
principal amount then outstanding of, and the accrued interest
on, the Loans, the Swingline Loans, the Reimbursement Obligations
and all other amounts payable by the Obligors hereunder
(including, without limitation, any amounts payable under
Section 5.05 or 5.06 hereof) shall automatically become
immediately due and payable without presentment, demand, protest
or other formalities of any kind, all of which are hereby
expressly waived by each Obligor.
In addition, upon the occurrence and during the
continuance of any Event of Default (if the Agent has declared
the principal amount then outstanding of, and accrued interest
on, the Revolving Credit Loans and all other amounts payable by
the Company hereunder to be due and payable), the Company agrees
that it shall, if requested by the Agent or the Majority
Revolving Credit Lenders through the Agent (and, in the case of
any Event of Default referred to in clause (f) or (g) of this
Section 10 with respect to either Obligor, forthwith, without any
demand or the taking of any other action by the Agent or such
Lenders) provide cover for the Letter of Credit Liabilities by
paying to the Agent immediately available funds in an amount
equal to the then aggregate undrawn face amount of all Letters of
Credit, which funds shall be held by the Agent in the Collateral
Account as collateral security in the first instance for the
Letter of Credit Liabilities and be subject to withdrawal only as
therein provided.
Section 11. The Agent.
11.01 Appointment, Powers and Immunities. Each Lender
hereby appoints and authorizes the Agent to act as its agent
hereunder and under the other Basic Documents with such powers as
are specifically delegated to the Agent by the terms of this
Agreement and of the other Basic Documents, together with such
other powers as are reasonably incidental thereto. The Agent
(which term as used in this sentence and in Section 11.05 and the
first sentence of Section 11.06 hereof shall include reference to
its affiliates and its own and its affiliates' officers,
directors, employees and agents):
(a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other
Basic Documents, and shall not by reason of this Agreement
or any other Basic Document be a trustee for any Lender;
(b) shall not be responsible to the Lenders for any
recitals, statements, representations or warranties
contained in this Agreement or in any other Basic Document,
or in any certificate or other document referred to or
provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Basic Document or
any other document referred to or provided for herein or
therein or for any failure by the Company or any other
Person to perform any of its obligations hereunder or
thereunder;
(c) shall not, except to the extent expressly
instructed by the Majority Lenders with respect to
collateral security under the Security Documents, be
required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Basic Document; and
(d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other Basic
Document or under any other document or instrument referred
to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence
or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it in good faith. The
Agent may deem and treat the payee (or Registered Holder, as the
case may be) of a Loan as the holder thereof for all purposes
hereof unless and until a notice of the assignment or transfer
thereof shall have been filed with the Agent, together with the
consent of the Company to such assignment or transfer (to the
extent provided in Section 12.06(b) hereof).
11.02 Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone,
telecopy, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by
the Agent. As to any matters not expressly provided for by this
Agreement or any other Basic Document, the Agent shall in all
cases be fully protected in acting, or in refraining from acting,
hereunder or thereunder in accordance with instructions given by
the Majority Lenders or, if provided herein, in accordance with
the instructions given by the Majority Revolving Credit Lenders,
the Majority Term Lenders or all of the Lenders as is required in
such circumstance, and such instructions of such Lenders and any
action taken or failure to act pursuant thereto shall be binding
on all of the Lenders.
11.03 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the
Agent has received notice from a Lender or the Company specifying
such Default and stating that such notice is a "Notice of
Default". In the event that the Agent receives such a notice of
the occurrence of a Default, the Agent shall give prompt notice
thereof to the Lenders. The Agent shall (subject to
Section 11.07 hereof) take such action with respect to such
Default as shall be directed by the Majority Lenders or, if
provided herein, the Majority Revolving Credit Lenders or the
Majority Term Lenders, provided that, unless and until the Agent
shall have received such directions, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such
action, with respect to such Default as it shall deem advisable
in the best interest of the Lenders except to the extent that
this Agreement expressly requires that such action be taken, or
not be taken, only with the consent or upon the authorization of
the Majority Lenders, the Majority Revolving Credit Lenders, the
Majority Term Lenders or all of the Lenders.
11.04 Rights as a Lender. With respect to its
Commitments, its Swingline Commitment and the Loans made by it,
Chase (and any successor acting as Agent) in its capacity as a
Lender or the Swingline Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise
the same as though it were not acting as the Agent, and the term
"Lender" or "Lenders" or "Swingline Lender" shall, unless the
context otherwise indicates, include the Agent in its individual
capacity. Chase (and any successor acting as Agent) and its
affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to make investments in and
generally engage in any kind of banking, trust or other business
with the Obligors (and any of their Subsidiaries or Affiliates)
as if it were not acting as the Agent, and Chase (and any such
successor) and its affiliates may accept fees and other
consideration from the Obligors for services in connection with
this Agreement or otherwise without having to account for the
same to the Lenders or the Swingline Lender.
11.05 Indemnification. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under Section 12.03
hereof, but without limiting the obligations of the Obligors
under said Section 12.03, and including in any event any payments
under any indemnity that the Agent is required to issue to any
bank referred to in Section 4.02 of the Security Agreement to
which remittances in respect of Accounts, as defined therein, are
to be made) ratably in accordance with the aggregate principal
amount of the Loans and Reimbursement Obligations held by the
Lenders (or, if no Loans or Reimbursement Obligations are at the
time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including
by any Lender) arising out of or by reason of any investigation
in or in any way relating to or arising out of this Agreement or
any other Basic Document or any other documents contemplated by
or referred to herein or therein or the transactions contemplated
hereby or thereby (including, without limitation, the costs and
expenses that the Obligors are obligated to pay under
Section 12.03 hereof, and including also any payments under any
indemnity that the Agent is required to issue to any bank
referred to in Section 4.02 of the Security Agreement to which
remittances in respect of Accounts, as defined therein, are to be
made, but excluding, unless a Default has occurred and is
continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such
other documents, provided that no Lender shall be liable for any
of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Agent and Other Lenders. Each
Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of the Guarantor and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or under any
other Basic Document. The Agent shall not be required to keep
itself informed as to the performance or observance by any
Obligor of this Agreement or any of the other Basic Documents or
any other document referred to or provided for herein or therein
or to inspect the Properties or books of the Guarantor or any of
its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to
the Lenders by the Agent hereunder or under the Security
Documents, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the
Guarantor or any of its Subsidiaries (or any of their affiliates)
that may come into the possession of the Agent or any of its
affiliates.
11.07 Failure to Act. Except for action expressly
required of the Agent hereunder and under the other Basic
Documents, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 11.05
hereof against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such
action.
11.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving notice thereof
to the Lenders and the Obligors, and the Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any
such resignation or removal, the Majority Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Majority Lenders and shall have
accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, that shall be a
bank with a combined capital and surplus and undivided profits of
at least $300,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section 11
shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as
the Agent.
11.09 Consents under Other Basic Documents. Except as
otherwise provided in Section 12.04 hereof with respect to this
Agreement, the Agent may, with the prior consent of the Majority
Lenders (but not otherwise), consent to any modification,
supplement or waiver under any of the Basic Documents, provided
that, without the prior consent of each Lender, the Agent shall
not (except as provided herein or in the Security Documents)
release any collateral or otherwise terminate any Lien under any
Basic Document providing for collateral security, or agree to
additional obligations being secured by such collateral security,
except that no such consent shall be required, and the Agent is
hereby authorized, to release any Lien covering (i) Property that
is the subject of a disposition of Property permitted hereunder
or (ii) Receivables to the extent such Receivables secure other
Indebtedness expressly permitted by the Majority Revolving Credit
Lenders, Majority Tranche A Term Loan Lenders and Majority
Tranche B Term Loan Lenders.
11.10 Collateral Sub-Agents. Each Lender by its
execution and delivery of this Agreement agrees, as contemplated
by Section 4.03 of the Security Agreement, that, in the event it
shall hold any Permitted Investments referred to therein, such
Permitted Investments shall be held in the name and under the
control of such Lender, and such Lender shall hold such Permitted
Investments as a collateral sub-agent for the Agent thereunder.
The Obligors by their execution and delivery of this Agreement
hereby consent to the foregoing.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Agent or
any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under
this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
12.02 Notices. Except as otherwise expressly provided
herein or in the Security Documents, all notices, requests and
other communications provided for herein and under the Security
Documents (including, without limitation, any modifications of,
or waivers, requests or consents under, this Agreement) shall be
given or made in writing (including, without limitation, by
telecopy) delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof
(below the name of the Company, in the case of the Guarantor);
or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as
otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by
telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as
aforesaid.
12.03 Expenses, Etc. The Obligors agree, jointly and
severally, to pay or reimburse each of the Lenders and the Agent
for: (a) all reasonable out-of-pocket costs and expenses of the
Agent (including, without limitation, the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy, special New York
counsel to Chase) in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the
other Basic Documents and the extension of credit hereunder and
(ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any
of the other Basic Documents (whether or not consummated);
(b) all reasonable out-of-pocket costs and expenses of the
Lenders and the Agent (including, without limitation, the
reasonable fees and expenses of legal counsel for the Agent and
one legal counsel for the Lenders) in connection with (i) any
Default and any enforcement or collection proceedings resulting
therefrom, including, without limitation, all manner of
participation in or other involvement with (x) bankruptcy,
insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and
(z) workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of
this Section 12.03; (c) all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any governmental
or revenue authority in respect of this Agreement or any of the
other Basic Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration,
recording or perfection of any security interest contemplated by
any Basic Document or any other document referred to therein; and
(d) all costs, expenses and other charges in respect of title
insurance procured with respect to the Liens created pursuant to
the Mortgages.
The Obligors hereby agree, jointly and severally, to
indemnify the Agent and each Lender and their respective
directors, officers, employees, attorneys and agents from, and
hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them
(including, without limitation, any and all losses, liabilities,
claims, damages or expenses incurred by the Agent to any Lender,
whether or not the Agent or any Lender is a party thereto)
arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or
litigation or other proceedings) relating to the extensions of
credit hereunder or any actual or proposed use by the Guarantor
or any of its Subsidiaries of the proceeds of any of the
extensions of credit hereunder, including, without limitation,
the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other
proceedings (but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified or solely by
reason of a breach of this Agreement by such Person). Without
limiting the generality of the foregoing, the Obligors will
(x) indemnify the Agent for any payments that the Agent is
required to make under any indemnity issued to any bank referred
to in Section 4.02 of the Security Agreement to which remittances
in respect to Accounts, as defined therein, are to be made and
(y) indemnify the Agent and each Lender from, and hold the Agent
and each Lender harmless against, any losses, liabilities,
claims, damages or expenses described in the preceding sentence
(including any Lien filed against any Property covered by the
Mortgages or any part of the thereunder in favor of any
governmental entity, but excluding, as provided in the preceding
sentence, any loss, liability, claim, damage or expense incurred
by reason of the gross negligence or willful misconduct of the
Person to be indemnified) arising under any Environmental Law as
a result of the past, present or future operations of the Company
or any of its Subsidiaries (or any predecessor in interest to the
Company or any of its Subsidiaries), or the past, present or
future condition of any site or facility owned, operated or
leased at any time by the Company or any of its Subsidiaries (or
any such predecessor in interest), or any Release or threatened
Release of any Hazardous Materials at or from any such site or
facility, including any such Release or threatened Release that
shall occur during any period when the Agent or any Lender shall
be in possession of any such site or facility following the
exercise by the Agent or any Lender of any of its rights and
remedies hereunder or under any of the Security Documents.
12.04 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may
be modified or supplemented only by an instrument in writing
signed by the Guarantor, the Company and the Majority Lenders, or
by the Guarantor, the Company and the Agent acting with the
consent of the Majority Lenders, and any provision of this
Agreement may be waived by the Majority Lenders or by the Agent
acting with the consent of the Majority Lenders; provided that
(a) no modification, supplement or waiver shall, unless by an
instrument signed by all of the Lenders or by the Agent acting
with the consent of all of the Lenders: (i) increase, or extend
the term of any of the Commitments or the Swingline Commitment,
or extend the time or waive any requirement for the reduction or
termination of any of the Commitments or the Swingline
Commitment, (ii) extend the date fixed for the payment of
principal of or interest on any Loan, the Reimbursement
Obligations or any fee hereunder, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which interest
is payable thereon or any fee is payable hereunder, (v) alter the
rights or obligations of the Company to prepay Loans (except in
connection with any transaction contemplated by clause (ii) to
the proviso to Section 11.09 hereof), (vi) alter the terms of
Section 11.09 hereof or this Section 12.04, (vii) modify the
definition of the term "Majority Lenders", "Majority Revolving
Credit Lenders" or "Majority Term Lenders", or modify in any
other manner the number or percentage of the Lenders required to
make any determinations or waive any rights hereunder or to
modify any provision hereof, (viii) waive any of the conditions
precedent set forth in Section 7.01 or 7.02 hereof or (ix)
release the Guarantor from any of its obligations under Section 6
hereof or Lagasse from any of its obligations under Section 3 of
the Lagasse Guarantee and Security Agreement; (b) no
modification, supplement or waiver shall (i) modify in any manner
any of Sections 2.01(a), 2.03, 9.01(g), 9.01(i), and 9.01(l)
hereof or (ii) modify the definition of the term "Borrowing
Base", "Borrowing Base Certificate", "Eligible Inventory",
"Ineligible Receivable", "Inventory", "Letter of Credit
Documents", "Letter of Credit Interest", "Letter of Credit
Liability", "Receivable Adjustments" or "Receivables", without
the consent of the Majority Revolving Credit Lenders; (c) no
waiver or modification with respect to clause (i) of Section 1402
or 1502 of the Indenture or any similar provision in any
agreement or instrument evidencing Subordinated Indebtedness
shall be effective without the consent of the Lenders holding at
least 66 2/3% of the sum of (i) the aggregate unused Commitments,
(ii) the aggregate unpaid principal amount of the Loans (other
than the Swingline Loans) and (iii) the aggregate amount of all
Letter of Credit Liabilities (the "Supermajority Lenders"); (d)
any modification of any of the rights or obligations of the Agent
or the Issuing Bank hereunder (including, without limitation, any
of the provisions of Section 11.08 hereof) shall require the
consent of the Agent or the Issuing Bank (as the case may be);
and (e) no modification, supplement or waiver with respect to any
provision of Section 2.01(d) or 2.02(b) hereof shall be effective
without the concurrence of the Swingline Bank and, if at the time
any Swingline Loans shall be outstanding, no modification,
supplement or waiver with respect to any provision of Section 9
or 10 hereof shall be effective without the concurrence of the
Swingline Lender.
12.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
12.06 Assignments and Participations.
(a) No Obligor may assign any of its rights or
obligations hereunder without the prior consent of all of the
Lenders and the Agent.
(b) Each Lender may assign any of its Loans, its
Commitments, and, if such Lender is a Revolving Credit Lender,
its Letter of Credit Interest and its interest acquired under
Section 2.01(d) hereof in Swingline Loans (but only with the
consent of, in the case of its outstanding Commitments, the
Company and the Agent and, in the case of the Revolving Credit
Commitment or a Letter of Credit Interest, the Issuing Bank);
provided that
(i) no such consent by the Company or the Agent shall
be required in the case of any assignment to another Lender;
(ii) except to the extent the Company and the Agent
shall otherwise consent, any such partial assignment (other
than to another Lender) shall be in an amount at least equal
to $5,000,000 (or, if less, the aggregate unpaid principal
amount of the Loans and the aggregate Commitments of such
Lender);
(iii) each such assignment by a Lender of its Revolving
Credit Loans, Revolving Credit Commitment or Letter of
Credit Interest shall be made in such manner so that the
same portion of its Revolving Credit Loans, Revolving Credit
Commitment and Letter of Credit Interest is assigned to the
respective assignee;
(iv) each such assignment by a Lender of its Term Loans
or Term Loan Commitment shall be made in such manner so that
the same portion of its Term Loans and Term Loan Commitment,
as the case may be, is assigned to the respective assignee;
(v) upon each such assignment, the assignor and
assignee shall deliver to the Company, the Agent and the
Issuing Bank a Notice of Assignment in the form of Exhibit H
hereto; and
(vi) no consent required of the Company or the Agent
under this Section 12.06(b) shall be unreasonably withheld
or delayed.
Upon execution and delivery by the assignor and the assignee to
the Company, the Agent and the Issuing Bank of such Notice of
Assignment, and upon consent thereto by the Company, the Agent
and the Issuing Bank to the extent required above, the assignee
shall have, to the extent of such assignment (unless otherwise
consented to by the Company, the Agent and the Issuing Bank), the
obligations, rights and benefits of a Lender hereunder holding
the Commitment(s), Loans and, if applicable, Letter of Credit
Interest (or portions thereof) assigned to it and specified in
such Notice of Assignment (in addition to the Commitment(s),
Loans and Letter of Credit Interest, if any, theretofore held by
such assignee) and the assigning Lender shall, to the extent of
such assignment, be released from the Commitment(s) (or
portion(s) thereof) so assigned. Upon each such assignment the
assigning Lender shall pay the Agent an assignment fee of $3,000;
provided that in the case of any such assignment to a Proposed
Lender (as defined in Section 5.08 hereof), such assignment fee
shall be paid by the Company.
(c) A Lender may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loans or
Letter of Credit Interest held by it, or in its Commitments, in
which event each purchaser of a participation (a "Participant")
shall be entitled to the rights and benefits of the provisions of
Section 9.01(m) hereof with respect to its participation in such
Loans, Letter of Credit Interest and Commitments as if (and the
Company shall be directly obligated to such Participant under
such provisions as if) such Participant were a "Lender" for
purposes of said Section, but, except as otherwise provided in
Section 4.07(c) hereof, shall not have any other rights or
benefits under this Agreement or any other Basic Document (the
Participant's rights against such Lender in respect of such
participation to be those set forth in the agreements executed by
such Lender in favor of the Participant). All amounts payable by
the Company to any Lender under Section 5 hereof in respect of
Loans, Letter of Credit Interest held by it, and its Commitments,
shall be determined as if such Lender had not sold or agreed to
sell any participations in such Loans, Letter of Credit Interest
and Commitments, and as if such Lender were funding each of such
Loan, Letter of Credit Interest and Commitments in the same way
that it is funding the portion of such Loan, Letter of Credit
Interest and Commitments in which no participations have been
sold. In no event shall a Lender that sells a participation
agree with the Participant to take or refrain from taking any
action hereunder or under any other Basic Document except that
such Lender may agree with the Participant that it will not,
without the consent of the Participant, agree to (i) increase or
extend the term, or extend the time or waive any requirement for
the reduction or termination, of such Lender's related
Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans,
Reimbursement Obligations or any portion of any fee hereunder
payable to the Participant, (iii) reduce the amount of any such
payment of principal, (iv) reduce the rate at which interest is
payable thereon, or any fee hereunder payable to the Participant,
to a level below the rate at which the Participant is entitled to
receive such interest or fee, (v) alter the rights or obligations
of the Company to prepay the related Loans or (vi) consent to any
modification, supplement or waiver hereof or of any of the other
Basic Documents to the extent that the same, under Section 11.09
or 12.04 hereof, requires the consent of each Lender.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.06,
any Lender may (without notice to the Company, the Agent or any
other Lender and without payment of any fee) (i) assign and
pledge all or any portion of its Loans to any Federal Reserve
Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank and (ii)
assign all or any portion of its rights under this Agreement and
its Loans to an affiliate. No such assignment shall release the
assigning Lender from its obligations hereunder.
(e) A Lender may furnish any information concerning
the Obligors or any of their respective Subsidiaries in the
possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants),
subject, however, to the provisions of Section 12.12(b) hereof.
(f) Anything in this Section 12.06 to the contrary
notwithstanding, no Lender may assign or participate any interest
in any Loan or Reimbursement Obligation held by it hereunder to
the Company or any of its Affiliates or Subsidiaries without the
prior consent of each Lender.
(g) At the request of any Lender that is not a
U.S. Person and is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, the Company shall maintain, or
cause to be maintained, a register (the "Register") that, at the
request of the Company, shall be kept by the Agent on behalf of
the Company at no charge to the Company at the address to which
notices to the Agent are to be sent hereunder, on which it enters
the name of such Lender as the registered owner of each
Registered Loan held by such Lender. A Registered Loan may only
be assigned or otherwise transferred in whole or in part by
registration of such assignment or transfer on the Register. Any
assignment or transfer of all or part of such Loan shall be
effected by registration of such assignment or transfer on the
Register. Prior to the registration of assignment or transfer of
any Registered Loan, the Company shall treat the Person in whose
name such Loan is registered as the owner thereof for the purpose
of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.
(h) The Register shall be available for inspection by
the Company and any Lender that is a Registered Holder at any
reasonable time upon reasonable prior notice.
12.07 Survival. The obligations of the Obligors under
the last paragraph of Section 2.03 hereof and under Sections
5.01, 5.05, 5.06, 5.07 and 12.03 hereof and under Section 6.03 of
the Security Agreement, Section 7.03 of the Lagasse Guarantee and
Security Agreement, and Section 4.13 of the Pledge Agreement, the
obligations of the Guarantor under Section 6.03 hereof, and the
obligations of the Lenders under Section 11.05 hereof, shall
survive the repayment of the Loans and Reimbursement Obligations
and the termination of the Commitments and, in the case of any
Lender that may assign any interest in its Commitments, Loans or
Letter of Credit Interest hereunder, shall survive the making of
such assignment, notwithstanding that such assigning Lender may
cease to be a "Lender" hereunder. In addition, each
representation and warranty made, or deemed to be made by a
notice of any extension of credit (whether by means of a Loan or
a Letter of Credit), herein or pursuant hereto shall survive the
making of such representation and warranty, and no Lender shall
be deemed to have waived, by reason of making any extension of
credit hereunder (whether by means of a Loan or a Letter of
Credit), any Default that may arise by reason of such
representation or warranty proving to have been false or
misleading, notwithstanding that such Lender or the Agent may
have had notice or knowledge or reason to believe that such
representation or warranty was false or misleading at the time
such extension of credit was made.
12.08 Captions. The table of contents and captions
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
12.09 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
12.10 Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with,
the law of the State of New York. Each Obligor hereby submits to
the nonexclusive jurisdiction of the United States District Court
for the Southern District of New York and of the Supreme Court of
the State of New York sitting in New York County (including its
Appellate Division), and of any other appellate court in the
State of New York, for the purposes of all legal proceedings
arising out of or relating to the Basic Documents or the
transactions contemplated hereby. Each Obligor hereby
irrevocably waives, to the fullest extent permitted by applicable
law, any objection that it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
12.11 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE
BASIC DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
12.12 Treatment of Certain Information;
Confidentiality.
(a) Each Obligor acknowledges that from time to time
financial advisory, investment banking and other services may be
offered or provided to such Obligor or one or more of its
Subsidiaries (in connection with this Agreement or otherwise) by
any Lender or by one or more subsidiaries or affiliates of such
Lender and each Obligor hereby authorizes each Lender to share
any information delivered to such Lender by such Obligor and its
Subsidiaries pursuant to this Agreement, or in connection with
the decision of such Lender to enter into this Agreement, with
any such subsidiary or affiliate, it being understood that any
such subsidiary or affiliate receiving such information shall be
bound by the provisions of paragraph (b) below as if it were a
Lender hereunder. Such authorization shall survive the repayment
of the Loans and Reimbursement Obligations and the termination of
the Commitments.
(b) Each Lender and the Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees
and representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures for
handling confidential information of the same nature and in
accordance with safe and sound banking practices, any non-public
information supplied to it by any Obligor pursuant to this
Agreement that is identified by such Person as being confidential
at the time the same is delivered to the Lenders or the Agent,
provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the
Lenders or the Agent, (iii) to regulatory personnel, auditors or
accountants, (iv) to the Agent or any other Lender (or to Chase
Securities, Inc.), (v) in connection with any litigation related
to the Acquisition, the Lagasse Acquisition or the transactions
contemplated by the Credit Agreement or the other Basic Documents
to which the Agent or any of the Lenders is a party, (vi) to a
subsidiary or affiliate of such Lender as provided in
paragraph (a) above or (vii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first
executes and delivers to the respective Lender a Confidentiality
Agreement substantially in the form of Exhibit G hereto (or
executes and delivers to such Lender an acknowledgement to the
effect that it is bound by the provisions of this
Section 12.12(b), which acknowledgement may be included as part
of the respective assignment or participation agreement pursuant
to which such assignee or participant acquires an interest in the
Loans or Letter of Credit Interest hereunder); provided, further,
that in no event shall any Lender or the Agent be obligated or
required to return any materials furnished by any Obligor. The
obligations of any assignee that has executed a Confidentiality
Agreement in the form of Exhibit H hereto shall be superseded by
this Section 12.12 upon the date upon which such assignee becomes
a Lender hereunder pursuant to Section 12.06(b) hereof.
12.13 Certain Tax Information. The Company shall
provide in writing to the Lenders on a timely basis such
information, if any, required by Treasury Regulation
Section 1.1275-2(e).
12.14 Consent to Receivables Financing. Notwith-
standing anything to the contrary in Section 9.05, 9.06 or 9.07
hereof, but subject to their reasonable satisfaction with final
documentation related thereto, the Lenders agree and consent to
the Company entering into a transaction substantially on the
terms set forth in Schedule IX hereto (the "Receivables
Transaction"), provided that the Revolving Credit Commitments
shall be reduced by an amount equal to the aggregate principal
amount of the commitments of purchasers to purchase Receivables,
or to finance the purchase of Receivables, in connection with the
Receivables Transaction.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
UNITED STATIONERS SUPPLY CO.
By
Title:
Address for Notices:
2200 East Golf Road
Des Plaines, Illinois 60016-1267
Attention: Chief Financial Officer
(with a copy to the General
Counsel's Office)
Telecopier No.: (847) 699-4716
Telephone No.: (847) 699-5000 x2135
UNITED STATIONERS INC.
By
Title:
Address for Notices:
2200 East Golf Road
Des Plaines, Illinois 60016-1267
Attention: Chief Financial Officer
(with a copy to the General
Counsel's Office)
Telecopier No.: (847) 699-4716
Telephone No.: (847) 699-5000 x2135
LENDERS
Revolving Credit Commitment THE CHASE MANHATTAN BANK
Tranche A Term
Loan Commitment By
Title:
Tranche B Term Lending Office for all Loans:
Loan Commitment
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Address for Notices:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: John J. Coyle
Telecopier No.: (212) 270-4238
Telephone No.: (212) 270-5632
THE CHASE MANHATTAN BANK,
as Agent
By
Title:
Address for Notices to
Chase as Agent:
The Chase Manhattan Bank
New York Agency
140 East 45th Street -- 29th Floor
New York, New York 10017
Attention: Agent Bank Services
Telecopier No.: (212) 622-0122
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_ _ SCHEDULE I
INDEBTEDNESS AND LIENS
Existing Indebtedness of Guarantor, Supply and its Subsidiaries
outstanding on the Effective Date:
Credit Agreement dated March 30, 1995 among United Stationers
Supply Co., United Stationers, Inc., the lenders party
thereto and The Chase Manhattan Bank (National Association),
as Agent (as modified and supplemented and in effect from
time to time, the "Existing Credit Agreement").
Indebtedness of $150,000,000.00, 12 3/4% Senior Subordinated
Notes due 2005 pursuant to the Indenture date as of May 3,
1995 among United Stationers Supply Co., United Stationers
Inc., and The Bank of New York, as Trustee.
Indebtedness pursuant to the Loan and Security Agreement dated as
of December 3, 1993 between United Stationers Supply Co. and
the CIT Group/Equipment Financing, Inc. (the "CIT Loan
Agreement") and the related guarantees by United Stationers
Inc. Outstanding Principal Amount $964,986.49.
Indebtedness pursuant to the Master Lease Agreement dated as of
November 23, 1992 between United Stationers Supply Co. and
The CIT Group/Equipment Financing, Inc. (the "CIT Lease
Agreement") and the related guarantees by United Stationers
Inc. Outstanding Principal Amount $1,036,133.72.
Industrial Development Bond Loan in the amount of $7,500,000 as
evidenced by (i) Loan Agreement dated as of October 1, 1990
between the Development Authority of Gwinett County, Georgia
("Georgia") and Supply; (ii) the Promissory Note dated
December 7, 1982 executed by Supply in favor of Georgia in
the amount of $7,500,000; (iii) Trust Indenture dated as of
October 1, 1990 between Georgia and PNC (or its successor in
interest); (iv) Reimbursement, Credit and Security Agreement
dated as of October 1, 1990 between Supply and PNC (6448
Best Friend Road, Norcross, Georgia). Outstanding Principal
Amount $7,500,000.
Industrial Development Bond Loan in the amount of $7,500,000 as
evidenced by (i) Mortgage Note dated December 1, 1983
executed by Supply in favor of the City of Des Plaines,
Illinois ("Illinois") and Supply; (ii) Assignment of Rents
and Leases dated December 1, 1983 executed by Supply in
favor of PNC (as successor in interest); (iii) Indenture of
Trust dated as of December 1, 1983 between Illinois and PNC
(as successor in trust); (iv) Guarantee and Indemnification
Agreement dated December 1, 1983 between United and PNC,
successor in interest (as supplemented) (2200 E. Golf Road)
and guaranteed by United. Outstanding Principal Amount
$7,500,000.
Industrial Development Bond Loan in the amount of $8,000,000 as
evidenced by (i) Loan and Security Agreement dated December
1, 1984 between Anne Arundel County, Maryland ("Maryland")
and Supply; (ii) Promissory Note in the amount of $8,000,000
dated December 27, 1984 executed by Supply in favor of
Maryland; and (iii) Indenture of Trust dated December 1,
1984 between Maryland and PNC (as successor in interest);
Guarantee and Indemnification Agreement between United, PNC
(as successor in interest) and Maryland (as supplemented)
(7441 Candlewood Road, Hanover, Maryland). Outstanding
Principal Amount $8,000,000.
Industrial Development Bond Loan in the amount of $6,800,000 as
evidenced by (i) Loan Agreement dated December 1, 1986
between the City of Twinsburg, Ohio ("Ohio") and Supply;
(ii) Indenture of Trust dated December 1, 1986 between Ohio
and Bank of New York (as successor in interest) (as
supplemented); and (iii) Guaranty Agreement dated December
1, 1986 between United and Bank of New York (as successor in
interest) (Twinsburg, Ohio). Outstanding Principal Amount
$6,800,000.
A Deed of Trust dated August 21, 1979 executed by Supply in favor
of John Hancock Mutual Life Insurance Company covering
property located in Dallas, Texas (119 Regal Row), which
secures a note in the amount of $3,000,000. Outstanding
Principal Amount $2,088,240.14.
Loan from Illinois Department of Commerce and Community Affairs
providing financing for infrastructure development on
facility located at 2000 Wolf Business Park, Greenville,
Illinois. Outstanding Principal Amount $174,974.13.
Intercompany Indebtedness of United to Supply evidenced by the
promissory note delivered to the Agent on the Initial
Borrowing Date. Outstanding Principal Amount
[$88,796,000.00].
Intercompany Indebtedness of Supply to United Stationers Hong
Kong Limited and United Worldwide Limited in the amount of
$127,418.
Intercompany Indebtedness of SAH, Inc. to Supply in the amount of
$263,074.00.
United has guaranteed the obligations of Supply under the leases
for its facilities located at (i) 5440 Stationers Way,
Sacramento, California, and (ii) 3365 Enterprise Avenue, Ft.
Lauderdale, Florida.
Supply has guaranteed the obligations of Lagasse under the lease,
as amended, for its facilities located at 1525 Kuebel
Street, Harahan, Louisiana.
The letters of credit set forth on the Letters of Credit Chart
(attached hereto) issued on behalf of United and its
Subsidiaries to remain outstanding or backstopped.
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_ _ _
LETTERS OF CREDIT CHART
LC N ISSUER APPLICAN ISSUE EXPIRY BENEFICIARY OUTSTANDI BACKSTOP (B)
T DATE DATE NG OUTSTANDING
BALANCE (O)
NORWEST
1. Sanwa USSC 9/30/96 6/30/97 Norwest $3,500,000.00 B
663/470/00372
2
2.(SEE ATTACHED [Norwest] USSC/UWL See See See List $xx,xxx.x O
SCHEDULE) List List x
CHASE
1. PG754785 CHASE USSC 3-30-95 4-6-97 PNC 7,684,932.00 B
(Gwimet Co.,
GA IRB)
2. PG754786 CHASE USSC 3-30-95 4-1-99 BANK OF NY 6,960,000.00 B
(Twinsburg,
OH IRB)
3. PG754787 CHASE USSC 3-30-95 3-29-97 PNC 8,120,000.00 O
(Anne Arundel
Co., MD IRB)
4. PG754788 CHASE USSC 3-30-95 3-29-97 PNC 7,612,500.00 O
(City of Des
Plaines, IL
IRB)
5. PG754789 CHASE USSC 3-30-95 3-31-97 AMERICAN 16,379,026.74 O
(Employee NATL.
Benefit
Trust)
PNC
1. A-301673 PNC USSC 12/14/90 01/01/97 PNC, Paying $7,684,932.00 O
(Gwinnett Agent
Co., GA IRB)
2. A-301404 PNC USSC 12/13/86 12/27/98 Bank of New $6,960,000.00 O
(Twinsburg, York OH IRB)
WORKER COMP. AND AUTO LIABILITY
1. 663/470/00332 Sanwa USSC Origina 12/01/96 American $4,500,000.00 O
5 l Motorists
11/01/94 Insurance
Company, et
Latest al.
Amendme
nt
3/5/96
Part C: Existing Indebtedness of Lagasse [to be Repaid on the
Initial Borrowing Date (or, as indicated, by ______________):
Cross-default and Cross-collateralization Agreement dated
December 29, 1995 by and between Hibernia National Bank and
Lagasse in connection with a $12.4 million dollar loan.
Outstanding Principal Amount [$5,500,000.]
Cross-default and Cross-collateralization Agreement dated
December 29, 1995 by and between Hibernia National Bank and
Lagasse in connection with an $878,971.71 dollar loan.
Outstanding Principal Amount [$320,657.]
[Obligations relating to miscellaneous building improvements for
the premises located at 5505 South Lambert Street, Jefferson
Parish, LA, in the amount of $25,000. Lagasse expects to
pay this debt in full prior to October 31, 1996.]
Liens Securing Indebtedness Remaining Outstanding (Guarantor
and Subsidiaries and Lagasse):
[A Deed of Trust and Assignment of Rents dated June 3, 1985,
executed by Supply for the benefit of State Farm Life
Insurance Company (as assigned from First Interstate
Mortgage Company) covering property located in the City of
Industry, California (918 South Stimson Avenue), which
secures a note in the amount of $6,000,000 (to be released
on or about July 31, 1995).]
[Liens pursuant to the Mortgage in favor of PNC Bank, National
Association (Twinsburg, Ohio).]
Liens pursuant to Mortgage and Loan Agreement in favor of the
City of Des Plaines, Illinois (2200 E. Golf Road).
The following UCC financing statements with respect to purchase
money and/or lease obligations:
FILING DEBTOR SECURED PARTY UCC-1 DATE
JURISDICTION FILING UCC-1
NUMBER FILED
UNITED STATIONERS SUPPLY CO.
1. Arizona United Hewlett-Packard 619420 04/30/90
Secretary Stationers Company
of State Supply Co. ("Hewlett")
("Supply")
2. Arizona Supply Hewlett 642697 11/06/90
Secretary
of State
3. California Supply Hewlett 90122489 05/11/90
Secretary
of State
4. Illinois Supply Hewlett 3133482 06/14/93
Secretary
of State
5. Illinois Supply Hewlett 3133483 06/14/93
Secretary
of State
6. Illinois Supply Hewlett 3133484 06/14/93
Secretary
of State
7. Illinois Supply Hewlett 3133485 06/14/93
Secretary
of State
8. Illinois Supply Hewlett 3133480 06/14/93
Secretary
of State
9. Illinois Supply Hewlett 3133479 06/14/93
Secretary
of State
10. Illinois Supply Hewlett 3133486 06/14/93
Secretary
of State
11. Illinois Supply Hewlett 3133481 06/14/93
Secretary
of State
12. Illinois Supply Hewlett 3133489 06/14/93
Secretary
of State
13. Illinois Supply AT&T Systems 3195446 12/03/93
Secretary Leasing
of State Corporation
("AT&T")
14. Illinois Supply Amdahl 3367676 02/23/95
Secretary Corporation
of State ("Amdahl")
15. Illinois Supply Hewlett 3133492 06/14/93
Secretary
of State
16. Illinois Supply Hewlett 3133490 06/14/93
Secretary
of State
17. Illinois Supply Hewlett 3133488 06/14/93
Secretary
of State
18. Illinois Supply Hewlett 3133478 06/14/93
Secretary
of State
19. Illinois Supply Hewlett 3133487 06/14/93
Secretary
of State
20. Illinois Supply Hewlett 3133491 06/14/93
Secretary
of State
21. Illinois Supply Hewlett 3072171 01/12/93
Secretary
of State
22. Illinois Supply Hewlett 3072172 01/12/93
Secretary
of State
23. Illinois Supply Hewlett 3072173 01/12/93
Secretary
of State
24. Illinois Supply Hewlett 3133477 06/14/93
Secretary
of State
25. Illinois Supply Hewlett 3072170 01/12/93
Secretary
of State
26. Illinois Supply Hewlett 3072168 01/12/93
Secretary
of State
27. Illinois Supply Hewlett 3072169 01/12/93
Secretary
of State
28. Illinois Supply AT&T 3055286 11/23/92
Secretary
of State
29. Illinois Supply Amdahl 2853517 06/21/91
Secretary
of State
30. Illinois Supply Illinois 2591158 06/26/89
Secretary Department of Continued
of State Commerce and :
Community 3229674 03/08/94
Affairs
31. Illinois Supply Hewlett 3072176 01/12/93
Secretary
of State
32. Illinois Supply Hewlett 3072175 01/12/93
Secretary
of State
33. Illinois Supply Hewlett 3095899 03/12/93
Secretary
of State
34. Illinois Supply Hewlett 3133476 06/14/93
Secretary
of State
35. Illinois Supply Hewlett 3133476 06/14/93
Secretary
of State
36. Illinois Supply Hewlett 3133474 06/14/93
Secretary
of State
37. Illinois Supply Hewlett 3133475 06/14/93
Secretary
of State
38. Illinois Supply Hewlett 3133473 06/14/93
Secretary
of State
39. Illinois Supply Hewlett 3133471 06/14/93
Secretary
of State
40. Illinois Supply AT&T 3102814 06/14/93
Secretary
of State
41. Illinois Supply Hewlett 3133472 06/14/93
Secretary
of State
42. Illinois Supply NCNB Texas 83-U- 12/28/83
Cook assignee, 46464
County Republic Bank Continued
Dallas ("NCNB : 12/21/88
Texas") 88-U-
31507
43. Illinois Supply NCNB Texas 83-U- 12/28/83
Cook 46465
County Continued
: 12/21/88
88-U-
31508
44. Louisiana, Supply Hewlett 26163747 11/08/90
Jefferson
Parish
45. Maryland, Anne Supply Dana Commercial Vol. 594, 05/21/93
Arundel County Credit Page 111
Corporation (289051)
46. Maryland Supply Norlease, Inc. 60838313- 03/24/86
Secretary ("Norlease") 2799/0544
of State
47. Maryland Supply Norlease 131328048- 05/12/93
Secretary 3509/0927
of State
48. Maryland Supply Norlease 60628390- 03/03/86
Secretary 2793/1412
of State
49. Maryland Supply Norlease 60218145- 01/21/86
Secretary 2782/0099
of State
50. Maryland Supply Norlease 53647930- 12/30/85
Secretary 2777/2410
of State
51. Maryland Supply Norlease 52638099- 09/20/85
Secretary 2748/0404
of State
52. Maryland Supply Norlease 53647931- 12/30/85
Secretary 2777/2411
of State
53. Michigan Supply Hovinga C879018 08/30/94
Secretary Business
of State Systems, Inc.
54. New Jersey Supply Marine Bank, as 1077779 01/09/87
Secretary of Trustee
State (assignee of
New Jersey
Economic
Development
Authority)
55. New Jersey Supply Eaton Financial 1470504 08/20/92
Secretary of Corporation
State
56. New Jersey Supply Canon Financial 1461968 06/26/92
Secretary of Services
State
57. New Jersey Supply Marine Bank, as 1885 #72 01/07/87
Middlesex Trustee Continued
County (assignee of :
New Jersey 1908 12/30/91
Economic #3165
Development
Authority)
58. New York Supply Manufacturers 89-1059* 05/28/89
Greene Bank (assignee (Please
County of LaSalle note that
Computer the above
Corporation) filing
has
lapsed
but is
still on
file with
County
Clerk.)
59. Ohio Supply Pittsburgh Y0006540 01/21/87
Secretary National Bank
of State ("Pittsburgh")
60. Ohio Supply Pittsburgh 391845 01/21/87
Summit
County
61. Oklahoma Supply Hewlett 058037 10/11/88
Oklahoma
County
62. Oklahoma Supply Hewlett 012279 03/06/89
Oklahoma
County
63. Texas Supply Hewlett 90-172791 05/10/90
Secretary
of State
64. Texas Supply Hewlett 90-172792 08/10/90
Secretary
of State
65. Texas Supply Hewlett 90-103710 05/10/90
Secretary
of State
66. Texas Supply Hewlett 90-234645 11/06/90
Secretary
of State
67. Texas Supply John Hancock 79-130599 08/24/79
Secretary Mutual Life
of State Insurance Conti
Company nued:
05/29
/94
07/28
/89
07/05
/94
68. Texas Supply Hewlett 91-105310 05/30/91
Secretary
of State
69. Texas Supply Hewlett 90-083999 04/16/90
Secretary
of State
70. Texas Supply Hewlett 90-094155 04/30/90
Secretary
of State
71. Utah Supply Hewlett 265684 11/06/90
Secretary
of State
UNITED STATIONERS INC.
72. Illinois United Refrigeration 2794650 12/13/90
Secretary Stationers Inc. Systems of
of State ("USI") Illinois
73. Missouri USI M.W.M., Inc. J321703 05/24/93
Jackson
County
74. New Jersey USI Eaton Financial 1480009 10/27/92
Secretary Corporation
of State ("Eaton")
75. New Jersey USI Eaton 1557901 03/08/94
Secretary
of State
76. Oregon USI The Bennett S39900 02/11/95
Secretary Funding Group,
of State Inc. (as
assignee to
Datagraphics
Northwest)
77. Tennessee USI Hewlett-Packard 886372 05/31/91
Secretary Company
of State ("Hewlett")
78. Texas USI Eaton 90-244414 11/20/90
Secretary
of State
79. Texas USI Eaton 90-244415 11/21/90
Secretary
of State
80. Texas USI Pitney Bowes 91-155006 08/08/91
Secretary Credit Corp.
of State
81. Texas USI Crown Credit 94-082354 04/28/94
Secretary Company
of State
Lagasse Bros.,
Inc.
82. California Lagasse Bros. Hibernia 91-034984 2/19/91
Secretary Inc. National Bank
of State ("Lagasse") ("Hibernia") con't
.
8/28/95
83. Florida Lagasse Hibernia 910000039 2/19/91
Secretary 584
of State 950000174 con't
016 .
8/29/95
84. Georgia Lagasse Hibernia 752361 2/4/91
Fulton
County con't
.
8/25/95
85. Illinois Lagasse Hibernia 2987532 8/10/94
Secretary
of State
86. Illinois Lagasse Raymond Leasing 3519723 3/21/96
Corp.
87. Louisiana Lagasse Hibernia 36-52771 2/1/91
Orleans 36-97727
Parish
88. Louisiana Lagasse Lease-America 36-63042 1/27/92
Orleans
Parish
89. Louisiana Lagasse AT&T Credit 36-103170 2/27/96
Orleans Corporation
Parish
90. Louisiana Lagasse Hibernia 36-76724 8/30/93
Orleans
Parish
91. Louisiana Lagasse Hibernia 36-104137 3/19/96
Orleans
Parish
92. Louisiana Lagasse Hibernia 36-107006 6/7/96
Orleans
Parish
93. Louisiana Lagasse Hibernia 26-204103 12/29/95
Jefferson
Parish
94. North Carolina Lagasse Hibernia 0754955 2/4/91
Secretary of 1262841
State con't
9/13/95
95. Texas Lagasse Hibernia 191018254 2/1/91
Secretary
of State con't
.
8/28/95
96. Washington Lagasse Hibernia 94-220- 8/8/94
Secretary of 0446
State
97. Indiana Lagasse Hibernia 1931666 8/10/94
Secretary
of State
DAFS02...:\33\78533\0001\6517\SCH0296P.580
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05/08/95 10:20pm JAT
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this box.
_ _ _ Text should begin immediately below this line. _
_ _ SCHEDULE II
ENVIRONMENTAL MATTERS
The Guarantor under state direction has investigated
the presence of petroleum contamination at its facility in
Edison, N.J. While Guarantor is not responsible for the
contamination, i.e., did not cause it, it could be required to
undertake certain corrective action to minimize the adverse
effects.
None of the facilities owned or operated by Guarantor
or its Subsidiaries is a treatment, storage or disposal facility
under the Resource Conservation and Recovery Act ("RCRA").
Several of the facilities, however, generate hazardous wastes,
which, although not prompting permitting obligations, requires
the registration and procurement of an EPA identification number.
Many of the facilities currently and historically
owned, operated or leased by the Guarantor or its Subsidiaries
contain asbestos-containing building materials ("ACM"), e.g.,
floor tiles and ceiling materials. These materials are
manageable and Guarantor does not believe that the existence of
ACM at any individual facility is reasonably likely to give rise
to environmental liabilities in excess of $10,000 unless for some
reason the ACM had to be removed. For specific locations that
contain ACM, Guarantor incorporates by reference the asbestos-
related information contained in Environmental Reports listed on
Attachment A.
It is possible that some of the electrical equipment
located either in the Guarantor's facilities or on real estate
owned or leased by Guarantor currently contain or historically
contained PCB-containing oils. For the most part, the electrical
equipment is owned by the local utility company in the area. The
Guarantor does not believe that the current or historic presence
of PCBs at any individual facility is reasonably likely to give
rise to environmental liabilities in excess of $10,000.
Guarantor incorporates by reference those portions of the
Environmental Reports on Attachment A that identify the
facilities that have or may have PCB-containing equipment.
There are underground storage tanks ("USTs") located
at, on or under some of the real property owned, operated, or
leased by the Guarantor and its Subsidiaries, and there
previously were some USTs located at the Company's facilities,
which have been removed or closed in place. Guarantor is not
aware of any current leaks or spills from any individual UST that
is reasonably likely to give rise to an environmental claim in
excess of $10,000. To the extent any of the USTs need to be
closed, the cost of closure could exceed $10,000. Guarantor
incorporates by reference those portions of the Environmental
Reports on Attachment A that identify the facilities that have or
previously had USTs.
ENVIRONMENTAL SURVEYS
UNITED STATIONERS SUPPLY CO.
Date of
Property How Held Survey Type of Survey
898 Carol Court Leased 10/11/89 Report Transmittal
Carol Stream, Illinois Environmental
Assessment (Two
parcels 160 and 110
acres) between
Fullerton Avenue and
Schmale Road, DuPage
County, Illinois)
Hazardous Wastes
Questionnaire by ASI
as proposed tenant,
Hazardous Materials
List
6725 Business Parkway Leased
Meadowridge Industrial
Park
Elkridge, Maryland
3030 Orange Grove Road Leased 01/04/93 Phase I Environmental
North Highlands, Assessment
California
18910-60 San Jose Avenue Leased 02/16/95 Final Report Phase I
City of Industry, Environmental Site
California Assessment
732 Striker Avenue Leased
Sacramento, California
1630 Westbelt Drive Leased 12/02/91 Report of Phase I
Columbus, Ohio Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
707 Parkway View Drive Leased 12/02/91 Report of Phase I
Pittsburgh, Pennsylvania Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
5523 N.W. 161st Street Leased 12/02/91 Report of Phase I
Hialeah, Florida Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
07/13/93 Report of Limited
Soil and Groundwater
Testing Program
5400 N.W. 163 Street Leased 12/02/91 Report of Phase I
Hialeah, Florida Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
07/13/93 Report of a Limited
Soil and Groundwater
Testing Program
724 Massman Drive Leased 12/02/91 Report of Phase I
Nashville, Tennessee Environmental Site
(48,000 square feet) Assessment and
Asbestos Survey of
Limited Scope
04/23/93 UST Closure
Regulatory Records
Review
724 Massman Drive Leased 12/02/91 Report of Phase I
Nashville, Tennessee Environmental Site
(18,000 square feet) Assessment and
Asbestos Survey of
Limited Scope
04/23/93 UST Closure
Regulatory Records
Review
1075 Hawthorn Drive Leased
Itasca, Illinois 60143
601 Raritan Way Owned 12/02/91 Report of Phase I
Denver, Colorado Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
5400 West 12th Street Owned 12/02/91 Report of Phase I
Jacksonville, Florida with a Environmental Site
partial Assessment and
sublet Asbestos Survey of
to a Limited Scope
third
party
3402 Queens Palm Drive Owned 12/02/91 Report of Phase I
Tampa, Florida Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
07/16/93 Report of Results of
Phase II
Environmental
Assessment
11/23/93 Report of Results of
Battery Wastewater
Assessment
4800 Highlands Parkway Owned 12/02/91 Report of Phase I
Smyrna, Georgia Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
7509 Boone Avenue, North Owned 12/02/91 Report of Phase I
Brooklyn Park, Minnesota Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
01/17/95 Report of
Neutralization Sump
Sampling and Wash
Basin Residue
Sampling
9755 International Owned 11/09/91 Environmental Site
Boulevard Assessment
Cincinnati, Ohio
01/19/95 Report of Wastewater
Sampling
9450 Allen Drive Owned 12/02/91 Report of Phase I
Valley View, Ohio Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
02/15/88 Environmental Audit
for Rite Aid
Distribution Center
on Allen Road
07/18/88 Analytical Report
from Wadsworth/Alert
Laboratories
8711 West Port Avenue Owned 12/02/91 Report of Phase I
Milwaukee, Wisconsin Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
01/17/95 Report of Soil
Sampling
5345 West 81st Street Owned 11/26/91 Report of Phase I
Indianapolis, Indiana Environmental Site
Assessment and
Asbestos Survey of
Limited Scope
01/17/95 UST Records Review
and Report of Phase
II Environmental Site
Assessment
Commerce Park III Owned 12/02/91 Report of Phase I
1400 Westinghouse Environmental Site
Boulevard Assessment and
Charlotte, North Carolina Asbestos Survey of
Limited Scope
01/18/95 Report of Preliminary
Ground-Water and Soil
Assessment
Commerce Park III
1400 Westinghouse
Boulevard
Charlotte, North
Carolina
Owned
II. LAGASSE BROS., INC.
1525 Kuebel Street Lease 10/23/96 Environmental Report
Harahan, LA 70123
There was also delivered a copy of the Operations and Maintenance
Program for Asbestos-Containing Materials in United Stationers
Distribution Warehouses prepared by Law Engineering, Inc. dated
November 23, 1993.
UNITED REPORTS PREPARED BY LAW
UNITED STATIONERS SUPPLY/TEMPE, AZ
UNITED STATIONERS SUPPLY/INDUSTRY, CA
UNITED STATIONERS SUPPLY/ANTELOPE, SACRAMENTO CO., CA
UNITED STATIONERS SUPPLY/DENVER, CO
UNITED STATIONERS SUPPLY/FORT LAUDERDALE, FL
UNITED STATIONERS SUPPLY/NORCROSS, GA
UNITED STATIONERS SUPPLY/FOREST PARK, IL
UNITED STATIONERS SUPPLY/HARAHAN, LA
UNITED STATIONERS SUPPLY/HANOVER, MD
UNITED STATIONERS SUPPLY/WOBURN, MA
UNITED STATIONERS SUPPLY/LIVONIA, MI
UNITED STATIONERS SUPPLY/EAGAN, MN
UNITED STATIONERS SUPPLY/NORTH KANSAS CITY, MO
UNITED STATIONERS SUPPLY/GREENVILLE, IL
UNITED STATIONERS SUPPLY/COXSACKIE, NY
UNITED STATIONERS SUPPLY/EDISON, NJ
UNITED STATIONERS SUPPLY/CHARLOTTE, NC
UNITED STATIONERS SUPPLY/SPRING DALE, OH
UNITED STATIONERS SUPPLY/TWINSBURG, OH
UNITED STATIONERS SUPPLY/TULSA, OK
UNITED STATIONERS SUPPLY/PORTLAND, OR
UNITED STATIONERS SUPPLY/PENNSAUKEN, NJ
UNITED STATIONERS SUPPLY/MEMPHIS, TN
UNITED STATIONERS SUPPLY/NASHVILLE, TN
UNITED STATIONERS SUPPLY/DALLAS, TX
UNITED STATIONERS SUPPLY/HOUSTON, TX
UNITED STATIONERS SUPPLY/LUBBOCK, TX
UNITED STATIONERS SUPPLY/SAN ANTONIO, TX
UNITED STATIONERS SUPPLY/SALT LAKE CITY, UT
UNITED STATIONERS SUPPLY/TUKWILA, WA
UNITED STATIONERS SUPPLY/BOLT, FT. WORTH, TX
UNITED STATIONERS SUPPLY/MOCKINGBIRD LANE, DALLAS, TX
UNITED STATIONERS SUPPLY/JESSUP, MD
UNITED STATIONERS SUPPLY/CITY OF INDUSTRY
DAFS02...:\33\78533\0001\6517\SCH0296R.010
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this box.
_ _ _ Text should begin immediately below this line. _
_ _ SCHEDULE III
SUBSIDIARIES AND INVESTMENTS
Part A
- United Stationers Supply Co.
- United Business Computers, Inc. ("UBC")1
- United Stationers Hong Kong Limited
- United Worldwide Limited
- SAH, Inc.
- CJS/GT Corp.
- Lagasse Bros., Inc.
Part B
Guarantor:
None
Supply:
- $500,000 Revolving Credit Loan Agreement dated
July 1, 1993 between United Business Computers, Inc.,
as Borrower, and Supply, as Lender
- $1,244,874 net in CJS/GT Corp. CJS/GT Corp. is a
general partner of a partnership that owns a building
located at 4303 Pleasantdale Road, Doraville, GA. The
building is presently fully leased.
Lagasse:
NONE
DAFS02...:\33\78533\0001\6517\SCH0296R.070
SCHEDULE IV
Real Property
I. DISPOSITIONS
The Company currently contemplates disposing of the real
property interest and all personal property (including furniture
and equipment) and fixtures at the locations listed below. All
facilities are warehouse space, except as otherwise noted.
PART A
California
- City of Industry (Los Angeles area) - 18960 E. San
Jose Avenue (Lease)
- North Highland (Sacramento area) - 3030 Orange
Grove (Lease)
- Sacramento - 5440 Stationers Way (Lease)
Colorado
- Denver - 501 Raritan Way (Fee)
- Denver - 2500-A West 5th Ave. (Lease)
- Denver - 2465 W. 4th Ave. (Lease)
Florida
- Hialeah (Miami area) - 5523 NW 161st Street
(Lease) [VACATED]
5400 NW 163rd Street (Lease)
[VACATED]
Georgia
- Smyrna (Atlanta) - 4800 Highlands Parkway (Fee)
[CLOSED]
- Doraville - 4303 Pleasantdale Road (this property
is not a facility and was acquired in satisfaction of a
debt owed to Supply) (Fee)
Illinois
- Des Plaines (Chicago area) - 2200 East Golf Road
(Corporate headquarters) (Fee)
- Forest Park (Chicago area) - 1900 South Des
Plaines Road (Fee)
- Forest Park (Chicago area) - 7750 Industrial -
Annex (Lease)
- Forest Park (Chicago area) - 7725 Industrial Drive
(Lease)
- Carol Stream (Chicago area) - 898 Carol Court
(Lease)
- Bensenville (Chicago area) - 1161 Ellis Street
(Lease)2
Louisiana
- New Orleans - 425 Ninth Street (Fee)
Maryland
- Elkridge (Baltimore area) - 6725 Business Parkway
(Lease) [VACATED]
Minnesota
- Brooklyn Park (St. Paul area) - 7509 Boone Avenue
(Fee)
- Eagan (Minneapolis area) - 1720 Alexander Road
(Fee)
North Carolina
- Charlotte - 10800-Z S. Commerce Blvd. (Lease)
Ohio
- Valley View (Cleveland area) - 9450 Allen Drive
(Fee) [CLOSED]
- Springdale (Cincinnati area) - 201 W.
Crescentville Road (Lease)
Tennessee
- Nashville - 724 Massman Drive (entire facility)
1920 Nolensville Road (Lease)
Texas
- Fort Worth (DFW area) - 3300 West Bolt Street (Old
SDC corporate office building) (Fee) [SOLD]
Wisconsin
- Milwaukee - 8711 West Point Avenue
PART B
California
- Sacramento - 723 Striker Avenue [VACATED]
Colorado
- Denver - 2500A West 5th Street/2465 W. 4th Avenue
(Leasehold)
Illinois
- Itasca (Chicago area) - 1075 Hawthorn Drive
(Leasehold) [CLOSED]
- Mount Prospect (Chicago area) - 1661 Feehanville
Drive (Leasehold)
North Carolina
- Charlotte - 1949-2001 Freedom Drive (Leasehold)
Ohio
- Twinsburg (Cleveland area) - 2100 Highland Road (Fee)
Tennessee
- Memphis - 2843 Harbor Avenue (Leasehold)3
Texas
- Dallas (DFW area) - 613-21 Mockingbird Lane/3439
Irving Boulevard
REAL PROPERTY INTERESTS
United Stationers Supply Co.
Arizona
Leasehold
- Tempe - 1013 West Alameda Drive
California
Fee Owned
- City of Industry (Los Angeles area) - 918 South
Stimson Avenue
Leasehold
- City of Industry (Los Angeles area) - 18305-385
San Jose Avenue
- City of Industry - 18960 E. San Jose Avenue
[VACATED]
- North Highland - 3030 Orange Grove
- Sacramento - 723 Striker Avenue [VACATED]
- Sacramento - 5440 Stationers Way
Colorado
Fee Owned
- Denver - 501 Raritan Way
Leasehold
- Denver - 2500A West 5th Street
- Denver - 2465 W. 4th Avenue
Connecticut
Leasehold
- North Branford - 104-5 Branford
Florida
Fee Owned
- Jacksonville - 5400 West 12th Street
- Tampa - 3402 Queen Palm Drive
Leasehold
- Ft. Lauderdale - 3365 Enterprise Avenue
- Hialeah - 5523 NW 161st Street [VACATED]
- Hialeah - 5400 NW 163rd Street [VACATED]
- Orlando - 4315 W. 34th Street
Georgia
Fee Owned
- Norcross (Atlanta area) - 6448 Best Friend Road
- Doraville - 4303 Pleasantdale Road (CJS/GT Corp.,
a subsidiary of Supply is a general partner in a
partnership that owns this building. The building is
presently fully leased.)
- Smyrna - 4800 Highlands Parkway [SOLD]
Illinois
Fee Owned
- Des Plaines - 2200 East Golf Road4
- Forest Park - 1900 South Des Plaines Road
- Greenville (St. Louis area) - 2000 Wolf Business
Park
Leasehold
- Carol Stream - 898 Carol Court
- Forest Park - 7750 Industrial - Annex
- Forest Park - 7725 Industrial Drive
- Itasca - 1075 Hawthorn Drive [CLOSED]
- Mount Prospect - 1661 Feehanville Drive
- Woodale - 376 Balm Court
Indiana
Fee Owned
- Indianapolis - 5345 West 81st Street
Louisiana
Leasehold
- Lafayette - 223 I.B. Street
- Harahan - 1000 Edwards Avenue
- New Orleans - 300 Plauche Street and Bevin Street
Maryland
Fee Owned
- Hanover (Baltimore area) - 7441 Candlewood Road
Leasehold
- Elkridge - 6725 Business Parkway [VACATED]
- Hanover - 7465 Candlewood Road (the property is
subleased to Andrews Office Supply)
- Jessup - 8155 Stayton Drive [CLOSED]
Massachusetts
Fee Owned
- Woburn (Boston area) - 415 Wildwood Avenue
Michigan
Fee Owned
- Livonia (Detroit area) - 32432 Capitol Drive
Leasehold
- Livonia (Detroit area) - 13001 Merriman Road
- Wyoming - 900 47th Street S.W.
Minnesota
Fee Owned
- Brooklyn Park (St. Paul area) - 7509 Boone Avenue
- Eagan (Minneapolis area) - 1720 Alexander Road
Missouri
Leasehold
- Kansas City - 1606 Linn Street
New Jersey
Fee Owned
- Edison (New York area) - 77 Executive Avenue
- Pennsauken (Philadelphia area) - 9009 Pennsauken
Highway
Leasehold
- Edison - 260 Meadow Road
- Pennsauken - 9020 Pennsauken Highway
New York
Fee Owned
- Coxsackie (Albany area) - Route 9W and Wolf Road
Leasehold
- Manhattan - 537-45 W. 27th Street/538-46 W. 28th
Street [VACATED]
North Carolina
Fee Owned
- Charlotte - 10800-Z S. Commerce Blvd.
Leasehold
- Charlotte - 1949-2001 Freedom Drive [VACATED]
Ohio
Fee Owned
- Sharonville (Cincinnati area) - 9775 International
Drive
- Twinsburg (Cleveland area) - 2100 Highland Road
- Valley View - 9450 Allen Drive [CLOSED]
Leasehold
- Columbus - 1630 Westbelt Drive
- Springdale - 201 W. Crescentville Road
Oklahoma
Fee Owned
- Tulsa - 1870 North 109th East Avenue
Leasehold
- Tulsa - 11525 East Pine Street
Oregon
Leasehold
- Portland - 4409 S.E. 24th Street
- Portland - 5035 S.E. 24th Street
Pennsylvania
Leasehold
- Pittsburgh - 707 Parkway View Drive [VACATED]
- Warrendale (Pittsburgh area) - 760 Commonwealth
Drive
Tennessee
Leasehold
- Memphis - 2843 Harbor Avenue
- Nashville - 1920 Nolensville Road
- Nashville - 724 Massman Drive - 48,000 sq. ft.
- Nashville - 720 Massman Drive - 18,000 sq. ft.
Texas
Fee Owned
- Dallas - 119 Regal Row
- Fort Worth - 3300 West Bolt Street [SOLD]
Leasehold
- Dallas - 613-21 Mockingbird Lane
- Dallas - 3439 Irving Blvd.
- Houston - 1160 Silber Road
- Houston - 2155 Silber Road
- Lubbock - 116 Slaton Road
- San Antonio - 3615 Highpoint Drive
Utah
Leasehold
- Salt Lake City - 888/890 West 2600
- Salt Lake City - 889 W. 2500 South Street
- Salt Lake City - 2495 S. 900 West (Lease expires
May 1, 1995) [VACANT]
Washington
Leasehold
- Tukwila - 18351 Cascade Avenue South, Building 255
- Tukwila - 18300 Southcenter Parkway
Wisconsin
Fee Owned
- Milwaukee - 8711 West Point Avenue
Lagasse Bros., Inc.
California
Leasehold
- Hayward - 30735 Weigman Road
- Union City (San Francisco area) -
30580 Whipple Road
- Bell (Los Angeles area) - 5650 Bandini Blvd
Florida
- Dania (Miami area) - 2317 Sterling Road
- Tampa - 4719-27 Distribution Drive
Georgia
- Atlanta - 5215-E Westgate Drive
Illinois
- Bensenville (Chicago area) - 1161 Ellis Street
Indiana
- Indianapolis - 2402 N. Shade Land Ave.
Louisiana
Fee Owned
- New Orleans - 425 Ninth Street
Leasehold
- Harahan (New Orleans area) - 1525 Kuebel Street
North Carolina
- Charlotte - 2700 Hutchinson McDonald Rd.
Ohio
- Valley View (Cleveland area) - 6065 Towpath Drive
Texas
- Dallas - 4830 Lakawana Street
- Houston - 1218 Silber Road
- San Antonio - 4511 Macro Street
Washington
- Kent (Seattle area) - 22035 West Valley Highway
III. MORTGAGES
United Stationers Supply Co.
Fee Owned
California
- City of Industry (Los Angeles area) - 918 South
Stimson Avenue
Colorado
- Denver - 501 Raritan Way****
Florida
- Jacksonville - 5400 West 12th Street*
- Tampa - 3402 Queen Palm Drive*
Illinois
- Des Plaines - 2200 East Golf Road
- Forest Park - 1900 South Des Plaines Road
- Greenville (St. Louis area) - 2000 Wolf Business
Park
Indiana
- Indianapolis - 5345 West 81st Street
Maryland
- Hanover (Baltimore area) - 7441 Candlewood Road*
Massachusetts
- Woburn (Boston area) - 415 Wildwood Avenue
Michigan
- Livonia (Detroit area) - 32342 Capitol Drive
Minnesota
- Brooklyn Park (St. Paul area) - 7509 Boone Avenue
North*
- Eagan (Minneapolis area) - 1720 Alexander Road*
New Jersey
- Pennsauken (Philadelphia area) - 9009 Pennsauken
Highway
New York
- Coxsackie (Albany area) - Route 9W and Wolf Road*
North Carolina
- Charlotte - 1400 Westinghouse Blvd.
Ohio
- Sharonville (Cincinnati area) - 9775 International
Drive
Texas
- Dallas - 119 Regal Row
Wisconsin
- Milwaukee - 8711 West Point Avenue
Leasehold
Arizona
- Tempe - 1005-1017 West Alameda Drive
California
- Sacramento - 5440 Stationers Way
Illinois
- Carol Stream - 898 Carol Stream
Louisiana
- New Orleans - 300 Plauche Street and Bevin Street
Tennessee
- Memphis - 2843 Harbor Avenue5*
- Nashville - 724 Massman Drive*
Texas
- San Antonio - 3615 Highpoint
Washington
- Tukwila - 18351 Cascade Avenue South, Building 255
Lagasse Bros. Inc.
Fee Owned
[NONE]
Leasehold
Louisiana
- Harahan (New Orleans area) - 1525 Kuebel Street
DAFS02...:\33\78533\0001\6517\SCH0296R.150
Do not delete this box or the codes above it; do not type above
this box.
_ _ _ Text should begin immediately below this line. _
_ _ SCHEDULE V
LITIGATION
Guarantor:
None
Supply and it subsidiaries:
None
Lagasse
None
SCHEDULE VI
CAPITALIZATION
[SEE ATTACHED]
Schedule VI
Outstanding as
of
Class of Stock: Authorized: Effective Date:
Common Stock,
par value $0.10 per 11,446,306.04
share 40,000,000.00
Nonvoting Common
Stock,
par value $0.01 per 5,000,000.00 758,993.90
share
Preferred Stock,
par value $0.01 per 1,500,000.00 26,697.44
share
The following series of preferred stock have been designated pursuant to a
certificate of designations, rights and preferences dated March 30, 1995
Issued and Outstanding
Series of Stock: Designated: as of the Effective Date:
Series A Preferred Stock,
par value $0.01 per 15,000.00 15,000.00 1
share
Series C Preferred Stock,
par value $0.01 per 15,000.00 11,697.4398
share
1 Dividends accrued, but not issued are 3,087.5001
The following represent warrants issued pursuant to the Warrant Agreements
mentioned in Section 8.15
Issued and Outstanding
Warrant type: as of the Effective Date:
Lender Warrants 1,227,438.05
Preferred B Warrants 182,188.74
The following represent options authorized and issued by the Guarantor
Outstanding as of
Option Authorized: Effective Date:
Plan/Agreement:
United Stationers Inc.
Management Stock 2,605,924.28 2,515,120.00
Option Plan
Jeffrey K. Hewson 14,648.00 14,648.00
SCHEDULE VII
TARGET EBITDA
Fiscal Year
Ended EBITDA
1995 $ 80,000,000
1996 $135,000,000
1997 $140,000,000
1998 $142,500,000
1999 $145,000,000
2000 $145,000,000
2001 $145,000,000
SCHEDULE VIII
TAXES
Guarantor:
None
Supply and its Subsidiaries:
- - United Stationers Hong Kong Limited does not join in filing
consolidated returns.
- - There is a federal income tax refund controversy pending in
federal district court for the 1986 year.
- - There is a federal income tax refund controversy pending
with respect to the 1988 through 1990 taxable years in
federal district court.
- - The statute of limitations for fiscal years ended August 31,
1991 and August 31, 1992 have been extended to June 30,
1997. Certain issues in both taxable years were "unagreed"
at the agent level and are being appealed. Based on an
initial meeting with an appeals officer, a favorable outcome
is anticipated.
Lagasse
None
SCHEDULE IX
UNITED STATIONERS INC.
ACCOUNTS RECEIVABLE FUNDING PROGRAM
Structural Overview
The proposed transaction involves a two tier structure. In the
first tier, United Stationers ("US") will establish United
Stationers Funding Corporation ("USFC"), a wholly owned, special
purpose bankruptcy remote subsidiary that will purchase, on a
revolving basis, all of the trade receivables (the "Receivables")
generated by US. In the second tier, the purchase by USFC will
be financed by the sale of an undivided percentage interest in
the Receivables. The sale by US will be structured as a true
sale for bankruptcy purposes, which will ensure that the assets
and liabilities of USFC will not be substantively consolidated
with those of US. In addition, reserve levels and other
structural enhancements will be established that are consistent
with an investment grade rating.
Purchase/Transferor: USFC, a bankruptcy remote, special-purpose
corporation wholly owned by US.
Seller: US
Servicer: Seller or any successor servicer
Program Description: Seller will sell to USFC all Receivables
at a Purchase Price equal to their fair
market value. USFC will purchase the
Receivables with a combination of cash and
obligations under a Subordinated Note.
USFC will derive the cash from the sales
of undivided percentage interests in the
Receivables.
Initial Contribution from Seller: Receivables that would have
a fair market value of $xx million shall
be contributed in the form of equity.
Bankruptcy-remote Characteristics: USFC will have at least two
independent directors and its by-laws will
require the consent of all independent
directors for the filing of a voluntary
bankruptcy petition by USFC or an
amendment of its by-laws. The program
documents will include other provisions
relating to independent operations of USFC
customary in programs of this nature.
Use of Proceeds: USFC will sell undivided interests in the
Receivables pursuant to a receivables
sales agreement and will use the proceeds
to fund the purchase of additional
Receivables or to repay the Subordinated
Note. The undivided interests in the
Receivables shall be evidenced by the
issuance of Certificates.
Aggregate Program: An amount up to $150,000,000
Expiration Date: The Receivables sales agreement will have
a maturity equal to or longer than that of
the existing Revolver, subject to earlier
termination of the program in accordance
with the terms of the program documents.
Purchase: A purchase of an interest or an additional
interest in the Receivables whether by
increasing the Purchaser's Investment or
by applying the Purchaser's Interest in
Collections as a reinvestment in the
Purchaser's Investment.
Security: An assignment of a first priority,
perfected ownership interest in USFC's
valid first priority, perfected ownership
interest in the Receivables, any related
security and proceeds thereof.
Sale of Receivables (Seller to USFC)
Receivable: All trade receivables generated by Seller
in the ordinary course of business.
Eligible Receivable: Usual and customary for transactions of
this type.
Purchase Price: The purchase price for the Receivables
conveyed to USFC shall be a dollar amount
equal to the aggregate unpaid balance of
the Eligible Receivables, less a discount
representing the sum of (i) a market rate
of interest, (ii) the cost of servicing
the receivables, and (iii) a percentage
representing historical losses.
Sales of Interests in the Receivables (USFC to Purchasers)
Purchaser's Investment: The aggregate purchase price for the
Receivables less any amounts paid by USFC
as a reduction to the Purchaser's
Investment.
Purchaser's Interest: The Purchaser's percentage interest in the
Receivables shall equal the Purchaser's
Investment plus the Reserve (as defined
below), expressed as a percentage of the
Eligible Pool Balance.
Reserve: The Reserve shall be in the form of an
overcollateralization of Receivables. The
Reserve will be a percentage of the
Purchaser's Interest calculated in manner
that is usual and customary for a
transaction of this type.
Eligible Pool Balance:The Eligible Pool Balance shall mean at
any date the outstanding unpaid principal
balance of all Eligible Receivables
reduced by the aggregate amount by which
the unpaid principal balance of Eligible
Receivables of an obligor exceed the
Concentration Limit.
Payment of the Purchase Price: The Purchaser will pay for the
purchase of undivided interests in the
Receivables in cash.
Reinvestments: Prior to the Expiration Date, USFC may
sell additional interests in the
Receivables for a purchase price equal to
the Purchaser's Interest in Collections
received on such day and not otherwise
required to be paid to or set aside for
the benefit of the Purchaser.
Concentration Limit: The aggregate amount of Receivables with
respect to a single obligor and such
obligor's subsidiaries and affiliates may
not constitute more than xx% of the
aggregate amount of the Receivables.
Collection Procedures and Lockbox: Cash collections on
Receivables will be remitted to a lockbox
in the name of USFC.
Reporting Requirements: Usual and customary for transactions
of this type.
EXHIBIT A
[Form of Borrowing Base Certificate]
BORROWING BASE CERTIFICATE
Monthly Accounting Period ended ____________, _____
Reference is made to the Credit Agreement dated as of
March 30, 1995 (as amended and restated as of October 31, 1996
and thereafter as modified and supplemented and in effect from
time to time, the "Credit Agreement"), between United Stationers
Supply Co. (together with its successors and assigns, the
"Company"), United Stationers Inc. as parent guarantor (together
with its successors and assigns, the "Guarantor"), the lenders
named therein, and The Chase Manhattan Bank, as Agent. Terms
defined in the Credit Agreement are used herein as defined
therein.
Pursuant to Section 9.01(g) of the Credit Agreement,
the undersigned, a Responsible Officer of the Company, hereby
certifies that, to the best of [his/her] knowledge, attached
hereto as Annex 1 is a true and accurate calculation of the
Borrowing Base as at the end of the monthly accounting period
ended ____________, _____ determined in accordance with the
requirements of the Credit Agreement.
To the best of my knowledge, all Inventory covered by
this Certificate has been produced in compliance with all
applicable laws, including, without limitation, the minimum wage
and overtime requirements of the Fair Labor Standards Act of
1938, as amended.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be duly executed on behalf of the Company and not
individually as of the __________ day of ____________, ______.
By:____________________________
Name
Title:
Annex 1
UNITED STATIONERS SUPPLY CO.
Borrowing Base Certificate
(000's omitted)
************************************************************
Receivables as of the last day of the
immediately preceding month ______
Less: Receivable Adjustments as of the
last day of the preceding Monthly
Accounting Period (______)
Subtotal: ______
Less: Ineligible Receivables as of the
last day of the preceding Monthly
Accounting Period (determined without
duplication):
Receivables not payable in Dollars (______)
(other than up to $10,000,000 Canadian
dollars)
Receivables (other than in connection
with a published promotional program)
payable more than 60 days after the
issuance of the billing statement
therefor (______)
Receivables due from Subsidiaries and
Affiliates (______)
Export Receivables (other than (1)
Receivables of account debtors located
in Canada and not exceeding
$10,000,000 and (2) Receivables of
account debtors located in a U.S.
Territory or Protectorate and not
exceeding $5,000,000) (______)
Receivables from creditors with
unsatisfactory credit standing (as
determined by the Majority Lenders)
or with respect to which, subsequent
to the creation of such Receivable,
an event described in Section 10(f)
or (g) of the Credit Agreement shall
have occurred (______)
Receivables over 90 days from issuance
of original billing statement
date (______)
Receivables with excess of 50% of
balances past 90 days from
invoice date (______)
Receivables exceeding concentration of
10% of aggregate Receivables (______)
Receivables subject to dispute (______)
Receivables evidenced by Instruments (______)
Receivables arising out of sale or
return transactions (______)
Catalogue Receivables6 (______)
Government Receivables including
state and local public universities (______)
Receivables from employees (______)
Receivables payable on COD basis (______)
Total Ineligible Receivables (______)
Total Eligible Receivables ______
Annex 1 to
Borrowing Base
Certificate of the Company
UNITED STATIONERS SUPPLY CO.
Borrowing Base Certificate
(000's omitted)
ELIGIBLE INVENTORY
Inventory at lower of cost or market
covered by appropriate filings: ______
[Less: Calendars7 (______)
Catalogs (______)
In excess of 100% of prior
12 months' sales (______)
New Inventory (to extent
value exceeds $25,000,000) (______)
Inventory for internal use] (______)
Less: (______)
Total Eligible Inventory ______
Annex 1 to
Borrowing Base
Certificate of the Company
UNITED STATIONERS SUPPLY CO.
Borrowing Base Certificate
(000's omitted)
BORROWING BASE
Borrowing Base:
80% of Eligible Receivables ______
Plus: 50% of Eligible Inventory ______
Plus: Cover for Letter of Credit
Liabilities ______
Subtotal ______
Less: Eligible Inventory in excess
of [65]%8 of Borrowing Base: (______)
Less: Any portion of the above
attributable to Eligible
Receivables and Eligible
Inventory of Lagasse that
is in excess of the outstanding
amount of Lagasse Advances (______)
Borrowing Base: ______
Revolving Credit Loans and Letter of
Credit Liabilities (______)
Unused Borrowing Base: ______
EXECUTION COPY
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated as of
October 31, 1996 between UNITED STATIONERS SUPPLY CO., a
corporation duly organized and validly existing under the laws of
the State of Illinois (together with its successors and assigns,
the "Company"); and THE CHASE MANHATTAN BANK, as agent for the
lenders party to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the
"Agent").
The Company, United Stationers Inc., the parent
corporation of the Company and a corporation duly organized and
validly existing under the laws of the State of Delaware
(together with its successors and assigns, the "Guarantor");
certain lenders; and the Agent are parties to a Credit Agreement
dated as of March 30, 1995 (as amended and restated as of October
31 and thereafter modified and supplemented and in effect from
time to time, the "Credit Agreement"), providing, subject to the
terms and conditions thereof, for extensions of credit (by making
of loans and issuing letters of credit) to be made by said
lenders to the Company in an aggregate principal amount not
exceeding on the date hereof $540,000,000.
To induce said lenders to enter into the Credit
Agreement and to extend credit thereunder, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company has agreed to pledge and grant a
security interest in the Collateral (as hereinafter defined) as
security for the Secured Obligations (as hereinafter defined).
Accordingly, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition, as
used herein:
"Accounts" shall have the meaning ascribed thereto in
Section 3(c) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.
"Collateral Account" shall have the meaning ascribed
thereto in Section 4.01 hereof.
"Copyright Collateral" shall mean all Copyrights,
whether now owned or hereafter acquired by the Company,
including each Copyright identified in Annex 2 hereto.
"Copyrights" shall mean all copyrights, copyright
registrations and applications for copyright registrations,
including, without limitation, all renewals and extensions
thereof, the right to recover for all past, present and
future infringements thereof, and all other rights of any
kind whatsoever accruing thereunder or pertaining thereto.
"Documents" shall have the meaning ascribed thereto in
Section 3(i) hereof.
"Equipment" shall have the meaning ascribed thereto in
Section 3(g) hereof.
"Foreign Subsidiary" shall mean any Subsidiary of the
Company that is not organized or created under the laws of
the United States of America, any State thereof or the
District of Columbia.
"Instruments" shall have the meaning ascribed thereto
in Section 3(d) hereof.
"Intellectual Property" shall mean, collectively, all
Copyright Collateral, all Patent Collateral and all
Trademark Collateral, together with (a) all inventions,
processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or
other agreements granted to the Company with respect to any
of the foregoing, in each case whether now or hereafter
owned or used including, without limitation, the licenses or
other agreements with respect to the Copyright Collateral,
the Patent Collateral or the Trademark Collateral, listed in
Annex 4 hereto, except to the extent that a security
interest therein may not be granted without the consent of a
licensor; (c) all information, customer lists,
identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge,
surveys, engineering reports, test reports, manuals,
materials standards, processing standards, performance
standards, catalogs, computer and automatic machinery
software and programs; (d) all field repair data, sales data
and other information relating to sales or service of
products now or hereafter manufactured; (e) all accounting
information and all media in which or on which any
information or knowledge or data or records may be recorded
or stored and all computer programs used for the compilation
or printout of such information, knowledge, records or data;
(f) all licenses, consents, permits, variances,
certifications and approvals of governmental agencies now or
hereafter held by the Company, except to the extent that a
security interest therein may not be granted without the
consent of a licensor; and (g) all causes of action, claims
or warranties now or hereafter owned or acquired by the
Company in respect of any of the items listed above.
"Inventory" shall have the meaning ascribed thereto in
Section 3(e) hereof.
"Motor Vehicles" shall mean motor vehicles, tractors,
trailers and other like property, whether or not the title
thereto is governed by a certificate of title or ownership.
"Patent Collateral" shall mean all Patents, whether now
owned or hereafter acquired by the Company, including each
Patent identified in Annex 3 hereto.
"Patents" shall mean all patents and patent
applications, including, without limitation, the inventions
and improvements described and claimed therein together with
the reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof, all income, royalties,
damages and payments now or hereafter due and/or payable
under and with respect thereto, including, without
limitation, damages and payments for past or future
infringements thereof, the right to sue for past, present
and future infringements thereof, and all rights
corresponding thereto throughout the world.
"Pledged Stock" shall have the meaning ascribed thereto
in Section 3(a) hereof.
"Secured Obligations" shall mean, collectively, (a) the
principal of and interest on the Loans made by the Lenders
to, and the Note(s) held by each Lender of, the Company and
all other amounts from time to time owing to the Lenders or
the Agent by the Company under the Basic Documents
including, without limitation, all Reimbursement Obligations
and interest thereon, (b) the Interest Rate Protection
Obligations required by Section 9.15 of the Credit Agreement
and (c) all obligations of the Company to the Lenders and
the Agent hereunder.
"Trademark Collateral" shall mean all Trademarks,
whether now owned or hereafter acquired by the Company,
including each Trademark identified in Annex 4 hereto.
Notwithstanding the foregoing, the Trademark Collateral does
not and shall not include any Trademark that would be
rendered invalid, abandoned, void or unenforceable by reason
of its being included as part of the Trademark Collateral.
"Trademarks" shall mean all trade names, trademarks and
service marks, logos, trademark and service mark
registrations, and applications for trademark and service
mark registrations, including, without limitation, all
renewals of trademark and service mark registrations, all
rights corresponding thereto throughout the world, the right
to recover for all past, present and future infringements
thereof, all other rights of any kind whatsoever accruing
thereunder or pertaining thereto, together, in each case,
with the product lines and goodwill of the business
connected with the use of, and symbolized by, each such
trade name, trademark and service mark.
"Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect from time to time in the State
of New York.
Section 2. Representations and Warranties. The
Company represents and warrants to the Lenders and the Agent
that:
(a) The Company is (or, at the time that the Company
acquires any interest therein, will be) the sole beneficial
owner of the Collateral and no Lien exists or will exist
upon the Collateral at any time (and no right or option to
acquire the same exists in favor of any other Person),
except for Liens permitted under Section 9.06 of the Credit
Agreement and except for the pledge and security interest in
favor of the Agent for the benefit of the Lenders created or
provided for herein, which pledge and security interest
constitute a perfected pledge and security interest in and
to all of the Collateral (other than Intellectual Property
registered or otherwise located outside of the United States
of America), subject to no equal or prior security interest
or pledge except as permitted under Section 9.06 of the
Credit Agreement.
(b) The Pledged Stock represented by the certificates
identified in Annex 1 hereto is, and all other Pledged Stock
in which the Company shall hereafter grant a security
interest pursuant to Section 3 hereof will be, duly
authorized, validly existing, fully paid and non-assessable
and none of such Pledged Stock is or will be subject to any
contractual restriction, or any restriction under the
charter or by-laws of the relevant issuer thereof, upon the
transfer of such Pledged Stock (except for any such
restriction contained herein or in the Credit Agreement).
(c) The Pledged Stock represented by the certificates
identified in Annex 1 hereto constitutes all of the issued
and outstanding shares of capital stock of each class of
each issuer thereof on the date hereof (or, in the case of
any Foreign Subsidiary, not less than 65% of the issued and
outstanding shares of capital stock of each class of such
Foreign Subsidiary on the date hereof), and said Annex 1
correctly identifies, as at the date hereof, the respective
class and par value of the shares comprising such Pledged
Stock, the respective number of shares represented by each
such certificate, and the respective beneficial and
registered owner of such shares.
(d) Annexes 2, 3 and 4 hereto, respectively, set forth
a complete and correct list of all Copyrights, Patents and
Trademarks owned by the Company on the date hereof; except
pursuant to licenses and other user agreements entered into
by the Company in the ordinary course of business, that are
listed in Annex 5 hereto, the Company owns and possesses the
right to use, and has done nothing to authorize or enable
any other Person to use, any Copyright, Patent or Trademark
listed in said Annexes 2, 3 and 4, and all registrations
listed in said Annexes 2, 3 and 4 are valid and in full
force and effect; except as may be set forth in said
Annex 5, the Company owns and possesses the right to use all
Copyrights, Patents and Trademarks.
(e) Annex 5 hereto sets forth a complete and correct
list of all licenses and other user agreements included in
the Intellectual Property on the date hereof.
(f) To the Company's knowledge, (i) except as set
forth in Annex 5 hereto, there is no violation by others of
any right of the Company with respect to any Copyright,
Patent or Trademark listed in Annexes 2, 3 and 4 hereto,
respectively, and (ii) the Company is not infringing in any
respect upon any Copyright, Patent or Trademark of any other
Person; and no proceedings have been instituted or are
pending against the Company or, to the Company's knowledge,
threatened, and no claim against the Company has been
received by the Company, alleging any such violation, except
as may be set forth in said Annex 5.
(g) The Company does not own any Trademarks registered
in the United States of America to which the last sentence
of the definition of Trademark Collateral applies.
(h) Any goods now or hereafter produced by the Company
or any of its Subsidiaries included in the Collateral have
been and will be produced in compliance with the
requirements of the Fair Labor Standards Act, as amended.
Section 3. Collateral. As collateral security for the
prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations, the
Company hereby pledges and grants to the Agent, for the benefit
of the Lenders as hereinafter provided, a security interest in
all of the Company's right, title and interest in the following
Property, whether now owned by the Company or hereafter acquired
and whether now existing or hereafter coming into existence (all
being collectively referred to herein as "Collateral"):
(a) all shares of capital stock of whatever class of
each Subsidiary of the Company (other than United Business
Computors, Inc., a Delaware corporation ("UBC"), for so long
as, and to the extent, the Stockholders' Agreement dated
July 1, 1993 between the Company, Theodore J. Crayne and
United Business Computers, Inc. prohibits transfer of the
shares of UBC, as described in Annex III to the Credit
Agreement) now or hereafter owned by the Company or any
other Subsidiary of the Company, including, without
limitation, from and after the effectiveness of the Mergers,
the shares of stock represented by the certificates
identified in Annex 1 hereto, in each case together with the
certificates representing the same (collectively, the
"Pledged Stock");
(b) all shares, securities, moneys or Property
representing a dividend on any of the Pledged Stock, or
representing a distribution or return of capital upon or in
respect of the Pledged Stock, or resulting from a split-up,
revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor,
and any subscription warrants, rights or options issued to
the holders of, or otherwise in respect of, the Pledged
Stock;
(c) all accounts and general intangibles (each as
defined in the Uniform Commercial Code) of the Company
constituting any right to the payment of money, including
(but not limited to) all moneys due and to become due to the
Company in respect of any loans or advances or for Inventory
or Equipment or other goods sold or leased or for services
rendered, all moneys due and to become due to the Company
under any guarantee (including a letter of credit) of the
purchase price of Inventory or Equipment sold by the Company
and all tax refunds (such accounts, general intangibles and
moneys due and to become due being herein called
collectively "Accounts");
(d) all instruments, chattel paper or letters of
credit (each as defined in the Uniform Commercial Code) of
the Company evidencing, representing, arising from or
existing in respect of, relating to, securing or otherwise
supporting the payment of, any of the Accounts, including
(but not limited to) promissory notes, drafts, bills of
exchange and trade acceptances (herein collectively called
"Instruments");
(e) all inventory (as defined in the Uniform
Commercial Code) of the Company, all goods obtained by the
Company in exchange for such inventory, and any products
made or processed from such inventory including all
substances, if any, commingled therewith or added thereto
(herein collectively called "Inventory");
(f) all Intellectual Property and all other accounts or
general intangibles not constituting Intellectual Property
or Accounts;
(g) all equipment (as defined in the Uniform
Commercial Code) of the Company, including all Motor
Vehicles (herein collectively called "Equipment");
(h) each contract and other agreement of the Company
relating to the sale or other disposition of Inventory or
Equipment;
(i) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of the Company covering,
evidencing or representing Inventory or Equipment (herein
collectively called "Documents");
(j) all rights, claims and benefits of the Company
against any Person arising out of, relating to or in
connection with Inventory or Equipment purchased by the
Company, including, without limitation, any such rights,
claims or benefits against any Person storing or
transporting such Inventory or Equipment;
(k) the balance from time to time in the Collateral
Account; and
(l) all other tangible and intangible personal
Property and fixtures of the Company, including, without
limitation, all proceeds, products, accessions, rents,
profits, income, benefits, substitutions and replacements of
and to any of the property of the Company described in the
preceding clauses of this Section 3 (including, without
limitation, any proceeds of insurance thereon and all causes
of action, claims and warranties now or hereafter held by
the Company in respect of any of the items listed above)
and, to the extent related to any Property described in said
clauses or such proceeds, products and accessions, all
books, correspondence, credit files, records, invoices and
other papers, including without limitation all tapes, cards,
computer runs and other papers and documents in the
possession or under the control of the Company or any
computer bureau or service company from time to time acting
for the Company;
provided that Collateral shall not include (i) shares of capital
stock of any class issued by any Foreign Subsidiary to the extent
that the percentage of issued and outstanding shares of capital
stock of such class subject to the Lien of this Agreement would
constitute more than 65% of the issued and outstanding shares of
capital stock of such class and (ii) any tangible personal
Property located outside the United States of America.
Section 4. Cash Proceeds of Collateral.
4.01 Collateral Account. The Agent shall establish
with Chase a cash collateral account (the "Collateral Account")
in the name and under the control of the Agent into which there
shall be deposited from time to time the cash proceeds of any of
the Collateral (including proceeds of insurance thereon) required
to be delivered to the Agent pursuant hereto and into which the
Company may from time to time deposit any additional amounts that
it wishes to pledge to the Agent for the benefit of the Lenders
as additional collateral security hereunder or that, as provided
in Sections 2.10 and 10 of the Credit Agreement, it is required
to pledge as additional collateral security hereunder. The
balance from time to time in the Collateral Account shall
constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied as
hereinafter provided. As promptly as possible after any amount
is deposited into the Collateral Account pursuant to the second
or third sentence of Section 4.02 hereof, the Agent shall remit
the balance of such amount (if any) to the Company's account
(#910-2-668754) with Chase. However, the Agent may (and, if
instructed by the Lenders of the Credit Agreement shall) at any
time in its (or their) discretion apply or cause to be applied
the balance from time to time outstanding to the credit of the
Collateral Account to the repayment of the principal of the
Revolving Credit Loans outstanding, to accrued interest on the
principal so repaid, and to the payment of any commitment fees
with respect to the Revolving Credit Commitments, in each case in
accordance with the Credit Agreement. Notwithstanding the above,
at any time following the occurrence and during the continuance
of an Event of Default, the Agent may (and, if instructed by the
Lenders as specified in Section 11.03 of the Credit Agreement,
shall) in its (or their) discretion apply or cause to be applied
(subject to collection) the balance from time to time standing to
the credit of the Collateral Account to the payment of the
Secured Obligations in the manner specified in Section 5.09
hereof. The balance from time to time in the Collateral Account
shall be subject to withdrawal only as provided herein.
4.02 Proceeds of Accounts. The Company shall
within 90 days of the Closing Date instruct all account debtors
and other Persons obligated in respect of all Accounts to make
all payments in respect of the Accounts either (a) directly to
the Agent (by instructing that such payments be remitted to a
post office box which shall be in the name and under the control
of the Agent) or (b) to one or more other banks in the United
States of America (by instructing that such payments be remitted
to a post office box which shall be in the name and under the
control of such other bank(s)) under arrangements, in form and
substance satisfactory to the Agent pursuant to which the Company
shall have irrevocably instructed such other bank(s) (and such
other bank(s) shall have agreed) to remit all proceeds of such
payments directly to the Agent for deposit into the Collateral
Account. All payments made to the Agent, as provided in the
preceding sentence, shall be immediately deposited in the
Collateral Account. In addition to the foregoing, the Company
agrees that if the proceeds of any Collateral hereunder
(including the payments made in respect of Accounts) shall be
received by it, the Company shall as promptly as possible deposit
such proceeds into the Collateral Account. Until so deposited,
all such proceeds shall be held in trust by the Company for and
as the property of the Agent and shall not be commingled with any
other funds or property of the Company.
4.03 Investment of Balance in Collateral Account.
Amounts on deposit in the Collateral Account shall be invested
from time to time in such Permitted Investments as the Company
(or, after the occurrence and during the continuance of an Event
of Default, the Agent) shall determine, which Permitted
Investments shall be held in the name and be under the control of
the Agent, provided that (i) at any time after the occurrence and
during the continuance of an Event of Default, the Agent may
(and, if instructed by the Lenders as specified in Section 11.03
of the Credit Agreement, shall) in its (or their) discretion at
any time and from time to time elect to liquidate any such
Permitted Investments and to apply or cause to be applied the
proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 5.09 hereof and (ii) if requested by
the Company, such Permitted Investments may be held in the name
and under the control of one or more of the Lenders (and in that
connection each Lender, pursuant to Section 11.10 of the Credit
Agreement, has agreed that such Permitted Investments shall be
held by such Lender as a collateral sub-agent for the Agent
hereunder).
4.04 Cover for Letter of Credit Liabilities. Amounts
deposited into the Collateral Account as cover for Letter of
Credit Liabilities under the Credit Agreement pursuant to
Section 2.10(h) or Section 10 thereof shall be held by the Agent
in a separate sub-account (designated "Letter of Credit
Liabilities Sub-Account") and all amounts held in such
sub-account shall constitute collateral security first for the
Letter of Credit Liabilities outstanding from time to time and
second as collateral security for the other Secured Obligations
hereunder.
Section 5. Further Assurances; Remedies. In
furtherance of the grant of the pledge and security interest
pursuant to Section 3 hereof, the Company hereby agrees with each
Lender and the Agent as follows:
5.01 Delivery and Other Perfection. The Company
shall:
(a) if any of the shares, securities, moneys or other
Property required to be pledged by the Company under
clauses (a) and (b) of Section 3 hereof are received by the
Company, forthwith either (x) transfer and deliver to the
Agent such shares or securities so received by the Company
(together with the certificates for any such shares and
securities duly endorsed in blank or accompanied by undated
stock powers duly executed in blank), all of which
thereafter shall be held by the Agent, pursuant to the terms
of this Agreement, as part of the Collateral or (y) take
such other action as the Agent shall deem necessary or
appropriate to duly record the Lien created hereunder in
such shares, securities, moneys or Property in said
clauses (a) and (b);
(b) deliver and pledge to the Agent any and all
Instruments, endorsed and/or accompanied by such instruments
of assignment and transfer in such form and substance as the
Agent may request; provided, that so long as no Event of
Default shall have occurred and be continuing, the Company
may retain for collection in the ordinary course any
Instruments received by the Company in the ordinary course
of business and the Agent shall, promptly upon request of
the Company, make appropriate arrangements for making any
Instrument pledged by the Company available to the Company
for purposes of presentation, collection or renewal (any
such arrangement to be effected, to the extent deemed
appropriate by the Agent, against trust receipt or like
document);
(c) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document, agreement
or other papers that may be necessary or desirable (in the
judgment of the Agent) to create, preserve, perfect or
validate the security interest granted pursuant hereto or to
enable the Agent to exercise and enforce its rights
hereunder with respect to such pledge and security interest,
including, without limitation, after the occurrence of an
Event of Default, causing any or all of the Stock Collateral
to be transferred of record into the name of the Agent or
its nominee (and the Agent agrees that if any Stock
Collateral is transferred into its name or the name of its
nominee, the Agent will thereafter promptly give to the
Company copies of any notices and communications received by
it with respect to the Stock Collateral), provided that
notices to account debtors in respect of any Accounts or
Instruments shall be subject to the provisions of clause (i)
below;
(d) without limiting the obligations of the Company
under Section 5.04(c) hereof, upon the acquisition after the
date hereof by the Company of any Equipment covered by a
certificate of title or ownership, cause the Agent to be
listed as the lienholder on such certificate of title and
within 120 days of the acquisition thereof deliver evidence
of the same to the Agent;
(e) keep full and accurate books and records relating
to the Collateral, and stamp or otherwise mark such books
and records in such manner as the Agent may reasonably
require in order to reflect the security interests granted
by this Agreement;
(f) furnish to the Agent from time to time (but,
unless an Event of Default shall have occurred and be
continuing, no more frequently than quarterly) statements
and schedules further identifying and describing the
Copyright Collateral, the Patent Collateral and the
Trademark Collateral, respectively, and such other reports
in connection with the Copyright Collateral, the Patent
Collateral and the Trademark Collateral, as the Agent may
reasonably request, all in reasonable detail;
(g) promptly upon request of the Agent, following
receipt by the Agent of any statements, schedules or reports
pursuant to clause (f) above, modify this Agreement by
amending Annexes 2, 3 and/or 4 hereto, as the case may be,
to include any Copyright, Patent or Trademark that becomes
part of the Collateral under this Agreement;
(h) permit representatives of the Agent, upon
reasonable notice, at any time during normal business hours
to inspect and make abstracts from its books and records
pertaining to the Collateral, and permit representatives of
the Agent to be present at the Company's place of business
to receive copies of all communications and remittances
relating to the Collateral, and forward copies of any
notices or communications received by the Company with
respect to the Collateral, all in such manner as the Agent
may require; and
(i) upon the occurrence and during the continuance of
any Event of Default, upon request of the Agent, promptly
notify (and the Company hereby authorizes the Agent so to
notify) each account debtor in respect of any Accounts or
Instruments that such Collateral has been assigned to the
Agent hereunder, and that any payments due or to become due
in respect of such Collateral are to be made directly to the
Agent.
5.02 Other Financing Statements and Liens. Except for
financing statements securing Liens expressly permitted by
Section 9.06 of the Credit Agreement and protective filings filed
against the Company in respect of equipment, furniture or
fixtures leased to or Property consigned with the Company,
without the prior written consent of the Agent (granted with the
authorization of the Lenders as specified in Section 11.09 of the
Credit Agreement), the Company shall not file or suffer to be on
file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with
respect to the Collateral in which the Agent is not named as the
sole secured party for the benefit of the Lenders.
5.03 Preservation of Rights. The Agent shall not be
required to take steps necessary to preserve any rights against
prior parties to any of the Collateral.
5.04 Special Provisions Relating to Certain
Collateral.
(a) Stock Collateral.
(1) The Company will cause the Pledged Stock to
constitute at all times 100% (or, with respect to any issuer that
is a Foreign Subsidiary, at least 65%) of the total number of
shares of each class of capital stock of each Subsidiary of the
Company then outstanding.
(2) Unless an Event of Default shall have occurred and
be continuing and the Agent shall have given notice to the
Company of its intention to exercise rights arising hereunder or
under any other Basic Document with respect to the Pledged Stock,
the Company shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the
Pledged Stock for all purposes not inconsistent with the terms of
this Agreement, the Credit Agreement, the Notes or any other
instrument or agreement referred to herein or therein, provided
that the Company agrees that it will not vote the Collateral in
any manner that is inconsistent with the terms of this Agreement,
the Credit Agreement, the Notes or any such other instrument or
agreement; and the Agent shall execute and deliver to the Company
or cause to be executed and delivered to the Company all such
proxies, powers of attorney, dividend and other orders, and all
such instruments, without recourse, as the Company may reasonably
request for the purpose of enabling the Company to exercise the
rights and powers that it is entitled to exercise pursuant to
this Section 5.04(a)(2).
(3) Unless and until an Event of Default has occurred
and is continuing, the Company shall be entitled to receive and
retain any dividends on the Collateral paid in cash out of earned
surplus.
(4) If any Event of Default shall have occurred, then
so long as such Event of Default shall continue, and whether or
not the Agent or any Lender exercises any available right to
declare any Secured Obligation due and payable or seeks or
pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Credit Agreement, the
Notes or any other agreement relating to such Secured Obligation,
all dividends and other distributions on the Pledged Stock shall
be paid directly to the Agent and retained by it as part of the
Collateral, subject to the terms of this Agreement, and, if the
Agent shall so request in writing, the Company agrees to execute
and deliver to the Agent appropriate additional dividend,
distribution and other orders and documents to that end, provided
that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of
the Company (except to the extent theretofore applied to the
Secured Obligations), be returned by the Agent to the Company.
(b) Intellectual Property.
(1) For the purpose of enabling the Agent to exercise
rights and remedies under Section 5.05 hereof at such time as the
Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, the Company hereby grants to
the Agent, to the extent assignable, an irrevocable,
non-exclusive license (exercisable without payment of royalty or
other compensation to the Company) to use, assign, license or
sublicense any of the Intellectual Property now owned or
hereafter acquired by the Company, wherever the same may be
located, including in such license reasonable access to all media
in which any of the licensed items may be recorded or stored and
to all computer programs used for the compilation or printout
thereof.
(2) Notwithstanding anything contained herein to the
contrary, but subject to the provisions of Section 9.05 of the
Credit Agreement that limit the right of the Company to dispose
of its Property, so long as no Event of Default shall have
occurred and be continuing, the Company will be permitted to
exploit, use, enjoy, protect, license, sublicense, assign, sell,
dispose of or take other actions with respect to the Intellectual
Property in the ordinary course of the business of the Company.
In furtherance of the foregoing, unless an Event of Default shall
have occurred and be continuing the Agent shall from time to
time, upon the request of the Company, execute and deliver any
instruments, certificates or other documents, in the form so
requested, that the Company shall have certified are appropriate
(in its judgment) to allow it to take any action permitted above
(including relinquishment of the license provided pursuant to
clause (1) immediately above as to any specific Intellectual
Property). Further, upon the payment in full of all of the
Secured Obligations and cancellation or termination of the
Commitments and Letter of Credit Liabilities or earlier
expiration of this Agreement or release of the Collateral, the
license granted pursuant to clause (1) immediately above shall
expire by its own terms without further action on the part of the
Company or the Agent. The exercise of rights and remedies under
Section 5.05 hereof by the Agent shall not terminate the rights
of the holders of any licenses or sublicenses theretofore granted
by the Company in accordance with the first sentence of this
clause (2).
(c) Motor Vehicles. At any time after the occurrence
and during the continuance of an Event of Default, the Company
shall, upon the request of the Agent, deliver to the Agent
originals of the certificates of title or ownership for the Motor
Vehicles owned by it with the Agent listed as lienholder and take
such other action as the Agent shall deem appropriate to perfect
the security interest created hereunder in all such Motor
Vehicles.
5.05 Events of Default, Etc. During the period during
which an Event of Default shall have occurred and be continuing:
(a) the Company shall, at the request of the Agent,
assemble the Collateral owned by it at such place or places,
reasonably convenient to both the Agent and the Company,
designated in its request;
(b) the Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the
Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of,
any of the Collateral;
(c) the Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party
under the Uniform Commercial Code (whether or not said Code
is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws
in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to
exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Agent were
the sole and absolute owner thereof (and the Company agrees
to take all such action as may be appropriate to give effect
to such right);
(d) the Agent in its discretion may, in its name or in
the name of the Company or otherwise, demand, sue for,
collect or receive any money or other Property at any time
payable or receivable on account of or in exchange for any
of the Collateral, but shall be under no obligation to do
so; and
(e) the Agent may, upon ten business days' prior
written notice to the Company of the time and place, with
respect to the Collateral or any part thereof that shall
then be or shall thereafter come into the possession,
custody or control of the Agent, the Lenders or any of their
respective agents, sell, lease, assign or otherwise dispose
of all or any part of such Collateral, at such place or
places as the Agent deems best, and for cash or for credit
or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of
performance or notice of intention to effect any such
disposition or of the time or place thereof (except such
notice as is required above or by applicable statute and
cannot be waived), and the Agent or any Lender or anyone
else may be the purchaser, lessee, assignee or recipient of
any or all of the Collateral so disposed of at any public
sale (or, to the extent permitted by law, at any private
sale) and thereafter hold the same absolutely, free from any
claim or right of whatsoever kind, including any right or
equity of redemption (statutory or otherwise), of the
Company, any such demand, notice and right or equity being
hereby expressly waived and released. In the event of any
sale, assignment, or other disposition of any of the
Trademark Collateral, the goodwill connected with and
symbolized by the Trademark Collateral subject to such
disposition shall be included, and the Company shall supply
to the Agent or its designee, for inclusion in such sale,
assignment or other disposition, all Intellectual Property
relating to such Trademark Collateral. The Agent may,
without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and
such sale may be made at any time or place to which the sale
may be so adjourned.
The proceeds of each collection, sale or other disposition under
this Section 5.05, including by virtue of the exercise of the
license granted to the Agent in Section 5.04(b) hereof, shall be
applied in accordance with Section 5.09 hereof.
The Company recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended,
and applicable state securities laws, the Agent may be compelled,
with respect to any sale of all or any part of the Collateral, to
limit purchasers to those who will agree, among other things, to
acquire the Collateral for their own account, for investment and
not with a view to the distribution or resale thereof. The
Company acknowledges that any such private sales may be at prices
and on terms less favorable to the Agent than those obtainable
through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially
reasonable manner and that the Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the
respective issuer thereof to register it for public sale.
5.06 Deficiency. If the proceeds of sale, collection
or other realization of or upon the Collateral pursuant to
Section 5.05 hereof are insufficient to cover the costs and
expenses of such realization and the payment in full of the
Secured Obligations, the Company shall remain liable for any
deficiency.
5.07 Removals, Etc. Without at least 30 days' prior
written notice to the Agent, the Company shall not (i) maintain
any of its books and records with respect to the Collateral at
any office or maintain its principal place of business at any
place, or permit any Inventory or Equipment to be located
anywhere, other than at 2200 East Golf Road, Des Plaines,
Illinois, 60016-1267 or at one of the locations identified in
Annex 6 hereto or in transit from one of such locations to
another or (ii) change its name, or the name under which it does
business, from the name shown on the signature pages hereto.
5.08 Private Sale. The Agent and the Lenders shall
incur no liability as a result of the sale of the Collateral, or
any part thereof, at any private sale pursuant to Section 5.05
hereof conducted in a commercially reasonable manner. The
Company hereby waives any claims against the Agent or any Lender
arising by reason of the fact that the price at which the
Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale or
was less than the aggregate amount of the Secured Obligations,
even if the Agent accepts the first offer received and does not
offer the Collateral to more than one offeree.
5.09 Application of Proceeds. Except as otherwise
herein expressly provided and except as provided below in this
Section 5.09, the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant hereto,
and any other cash at the time held by the Agent under Section 4
hereof or this Section 5, shall be applied by the Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Agent and the fees
and expenses of its agents and counsel, and all expenses
incurred and advances made by the Agent in connection
therewith;
Next, to the payment in full of the Secured
Obligations, in each case equally and ratably in accordance
with the respective amounts thereof then due and owing or as
the Lenders holding the same may otherwise agree; and
Finally, to the payment to the Company, or its
successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
Notwithstanding the foregoing, the proceeds of any cash or other
amounts held in the "Letter of Credit Liabilities Sub-Account" of
the Collateral Account pursuant to Section 4.04 hereof shall be
applied first to the Letter of Credit Liabilities outstanding
from time to time and second to the other Secured Obligations in
the manner provided above in this Section 5.09.
As used in this Section 5, "proceeds" of Collateral
shall mean cash, securities and other Property realized in
respect of, and distributions in kind of, Collateral, including
any thereof received under any reorganization, liquidation or
adjustment of debt of the Company or any issuer of or obligor on
any of the Collateral.
5.10 Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Agent while no Event of
Default has occurred and is continuing, upon the occurrence and
during the continuance of any Event of Default the Agent is
hereby appointed the attorney-in-fact of the Company for the
purpose of carrying out the provisions of this Section 5 and
taking any action and executing any instruments that the Agent
may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the
foregoing, so long as the Agent shall be entitled under this
Section 5 to make collections in respect of the Collateral, the
Agent shall have the right and power to receive, endorse and
collect all checks made payable to the order of the Company
representing any dividend, payment or other distribution in
respect of the Collateral or any part thereof and to give full
discharge for the same.
5.11 Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, the Company shall
(i) file such financing statements and other documents in such
offices as the Agent may request to perfect the security
interests granted by Section 3 of this Agreement and (ii), at the
request of the Agent, cause the Agent to be listed as the
lienholder on all certificates of title or ownership relating to
Motor Vehicles owned by the Company
5.12 Termination. When all Secured Obligations shall
have been paid in full and the Commitments of the Lenders under
the Credit Agreement and all Letter of Credit Liabilities shall
have expired or been terminated, this Agreement shall terminate,
and the Agent shall forthwith cause to be assigned, transferred
and delivered, against receipt but without any recourse, warranty
or representation whatsoever, any remaining Collateral and money
received in respect thereof, to or on the order of the Company
and to be released and canceled all licenses and rights referred
to in Section 5.04(b) hereof. The Agent shall also execute and
deliver to the Company upon such termination such Uniform
Commercial Code termination statements, certificates for
terminating the Liens on the Motor Vehicles and such other
documentation as shall be reasonably requested by the Company to
effect the termination and release of the Liens on the
Collateral.
5.13 Further Assurances. The Company agrees that,
from time to time upon the written request of the Agent, the
Company will execute and deliver such further documents and do
such other acts and things as the Agent may reasonably request in
order fully to effect the purposes of this Agreement.
5.14 Release of Motor Vehicles. So long as no Event
of Default shall have occurred and be continuing, upon the
request of the Company, the Agent shall execute and deliver to
the Company such instruments as the Company shall reasonably
request to remove the notation of the Agent as lienholder on any
certificate of title for any Motor Vehicle; provided that any
such instruments shall be delivered, and the release effective
only upon receipt by the Agent of a certificate from the Company
stating that the Motor Vehicle the lien on which is to be
released is to be sold or has suffered a casualty loss (with
title thereto passing to the casualty insurance company (or its
designee) therefor in settlement of the claim for such loss) and
any proceeds of such sale or casualty loss to the extent required
by the Credit Agreement being paid to the Agent hereunder.
Section 6. Miscellaneous.
6.01 No Waiver. No failure on the part of the Agent
or any Lender to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Agent or any Lender of any right,
power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any
remedies provided by law.
6.02 Notices. All notices, requests, consents and
demands hereunder shall be in writing and telecopied or delivered
to the intended recipient at its "Address for Notices" specified
pursuant to Section 12.02 of the Credit Agreement and shall be
deemed to have been given at the times specified in said
Section 12.02.
6.03 Expenses. The Company agrees to reimburse each
of the Lenders and the Agent for all reasonable costs and
expenses of the Lenders and the Agent (including, without
limitation, the reasonable fees and expenses of legal counsel) in
connection with (i) any Default and any enforcement or collection
proceeding resulting therefrom, including, without limitation,
all manner of participation in or other involvement with (w)
performance by the Agent of any obligations of the Company in
respect of the Collateral that the Company has failed or refused
to perform, (x) bankruptcy, insolvency, receivership,
foreclosure, winding up or liquidation proceedings, or any actual
or attempted sale, or any exchange, enforcement, collection,
compromise or settlement in respect of any of the Collateral, and
for the care of the Collateral and defending or asserting rights
and claims of the Agent in respect thereof, by litigation or
otherwise, including expenses of insurance, (y) judicial or
regulatory proceedings and (z) workout, restructuring or other
negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated)
and (ii) the enforcement of this Section 6.03, and all such costs
and expenses shall be Secured Obligations entitled to the
benefits of the collateral security provided pursuant to
Section 3 hereof.
6.04 Amendments, Etc. The terms of this Agreement may
be waived, altered or amended only by an instrument in writing
duly executed by the Company and the Agent (with the consent of
the Lenders as specified in Section 11.09 of the Credit
Agreement). Any such amendment or waiver shall be binding upon
the Agent and each Lender each holder of any of the Secured
Obligations and the Company.
6.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective
successors and assigns of the Company, the Agent, the Lenders and
each holder of any of the Secured Obligations (provided, however,
that the Company shall not assign or transfer its rights
hereunder without the prior written consent of the Agent).
6.06 Captions. The captions and section headings
appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any
provision of this Agreement.
6.07 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and either of the parties
hereto may execute this Agreement by signing any such
counterpart.
6.08 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the law of the State of New
York.
6.09 Agents and Attorneys-in-Fact. The Agent may
employ agents and attorneys-in-fact in connection herewith and
shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it in good faith.
6.10 Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest
extent permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Agent and the Lenders in
order to carry out the intentions of the parties hereto as nearly
as may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed and delivered as of the
day and year first above written.
UNITED STATIONERS SUPPLY CO.
By
Title:
THE CHASE MANHATTAN BANK,
as Agent
By
Title:
EXECUTION COPY
GUARANTEE AND SECURITY AGREEMENT
GUARANTEE AND SECURITY AGREEMENT dated as of
October 31, 1996 between LAGASSE BROS., INC., a corporation duly
organized and validly existing under the laws of the State of
Louisiana (the "Subsidiary Guarantor"); and THE CHASE MANHATTAN
BANK, as agent for the lenders party to the Credit Agreement
referred to below (in such capacity, together with its successors
in such capacity, the "Agent").
United Stationers Supply Co. (the "Company"), United
Stationers Inc., the parent corporation of the Company and a
corporation duly organized and validly existing under the laws of
the State of Delaware (together with its successors and assigns,
the "Parent Guarantor" and, together with the Company, the
"Obligors"), certain lenders and the Agent are parties to an
Amended and Restated Credit Agreement dated as of October 31,
1996 (as modified and supplemented and in effect from time to
time, the "Credit Agreement"), providing, subject to the terms
and conditions thereof, for extensions of credit (by making of
loans and issuing letters of credit) to be made by said lenders
to the Company in an aggregate principal amount not exceeding on
the date hereof $540,000,000. Under the term of the Credit
Agreement, up to $25,000,000 aggregate principal amount of the
proceeds of such extensions of credit may from time to time be
made available to the Subsidiary Guarantor by the making of
advances from the Company to the Subsidiary Guarantor pursuant to
an open account not evidenced by a negotiable instrument (each
such advance, a "Subsidiary Advance").
To induce said lenders to enter into the Credit
Agreement and to extend credit thereunder, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Subsidiary Guarantor has agreed to
guarantee the Guaranteed Obligations (as hereinafter defined),
and to pledge and grant a security interest in the Collateral (as
hereinafter defined) as security for the Secured Obligations (as
hereinafter defined). Accordingly, the parties hereto agree as
follows:
Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition, as
used herein:
"Accounts" shall have the meaning ascribed thereto in
Section 4(d) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 4 hereof.
"Copyright Collateral" shall mean all Copyrights,
whether now owned or hereafter acquired by the Subsidiary
Guarantor, including each Copyright identified in Annex 2
hereto.
"Copyrights" shall mean all copyrights, copyright
registrations and applications for copyright registrations,
including, without limitation, all renewals and extensions
thereof, the right to recover for all past, present and
future infringements thereof, and all other rights of any
kind whatsoever accruing thereunder or pertaining thereto.
"Documents" shall have the meaning ascribed thereto in
Section 4(j) hereof.
"Equipment" shall have the meaning ascribed thereto in
Section 4(h) hereof.
"Foreign Subsidiary" shall mean any Subsidiary of the
Subsidiary Guarantor that is not organized or created under
the laws of the United States of America, any State thereof
or the District of Columbia.
"Guaranteed Obligations" shall have the meaning
ascribed thereto in Section 3.01 hereof.
"Instruments" shall have the meaning ascribed thereto
in Section 4(e) hereof.
"Intellectual Property" shall mean, collectively, all
Copyright Collateral, all Patent Collateral and all
Trademark Collateral, together with (a) all inventions,
processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or
other agreements granted to the Subsidiary Guarantor with
respect to any of the foregoing, in each case whether now or
hereafter owned or used including, without limitation, the
licenses or other agreements with respect to the Copyright
Collateral, the Patent Collateral or the Trademark
Collateral, listed in Annex 5 hereto, except to the extent
that a security interest therein may not be granted without
the consent of a licensor; (c) all information, customer
lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge,
surveys, engineering reports, test reports, manuals,
materials standards, processing standards, performance
standards, catalogs, computer and automatic machinery
software and programs; (d) all field repair data, sales data
and other information relating to sales or service of
products now or hereafter manufactured; (e) all accounting
information and all media in which or on which any
information or knowledge or data or records may be recorded
or stored and all computer programs used for the compilation
or printout of such information, knowledge, records or data;
(f) all licenses, consents, permits, variances,
certifications and approvals of governmental agencies now or
hereafter held by the Subsidiary Guarantor, except to the
extent that a security interest therein may not be granted
without the consent of a licensor; and (g) all causes of
action, claims or warranties now or hereafter owned or
acquired by the Company in respect of any of the items
listed above.
"Inventory" shall have the meaning ascribed thereto in
Section 4(f) hereof.
"Issuers" shall mean, collectively, the respective
corporations identified on Annex 1 hereto under the caption
"Issuer".
"Lagasse Collateral Account" shall have the meaning
ascribed thereto in Section 5.01 hereof.
"Motor Vehicles" shall mean motor vehicles, tractors,
trailers and other like Property, whether or not the title
thereto is governed by a certificate of title or ownership.
"Patent Collateral" shall mean all Patents, whether now
owned or hereafter acquired by the Subsidiary Guarantor,
including each Patent identified in Annex 3 hereto.
"Patents" shall mean all patents and patent
applications, including, without limitation, the inventions
and improvements described and claimed therein together with
the reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof, all income, royalties,
damages and payments now or hereafter due and/or payable
under and with respect thereto, including, without
limitation, damages and payments for past or future
infringements thereof, the right to sue for past, present
and future infringements thereof, and all rights
corresponding thereto throughout the world.
"Pledged Stock" shall have the meaning ascribed thereto
in Section 4(a) hereof.
"Secured Obligations" shall mean, collectively, (a) the
Guaranteed Obligations, which include the principal of and
interest on the Loans made by the Lenders to the Company and
all other amounts from time to time owing to the Lenders or
the Agent by the Company under the Basic Documents
including, without limitation, all Reimbursement Obligations
and interest thereon, (b) the Interest Rate Protection
Obligations required under Section 9.15 of the Credit
Agreement and (c) all obligations of the Subsidiary
Guarantor hereunder and under the other Basic Documents
(including, without limitation, in respect of the guarantee
under Section 3 hereof).
"Stock Collateral" shall mean, collectively, the
Collateral described in clauses (a) through (c) of Section 4
hereof and the proceeds of and to any such Property and, to
the extent related to any such Property or such proceeds,
all books, correspondence, credit files, records, invoices
and other papers.
"Trademark Collateral" shall mean all Trademarks,
whether now owned or hereafter acquired by the Subsidiary
Guarantor, including each Trademark identified in Annex 4
hereto. Notwithstanding the foregoing, the Trademark
Collateral does not and shall not include any Trademark that
would be rendered invalid, abandoned, void or unenforceable
by reason of its being included as part of the Trademark
Collateral.
"Trademarks" shall mean all trade names, trademarks and
service marks, logos, trademark and service mark
registrations, and applications for trademark and service
mark registrations, including, without limitation, all
renewals of trademark and service mark registrations, all
rights corresponding thereto throughout the world, the right
to recover for all past, present and future infringements
thereof, all other rights of any kind whatsoever accruing
thereunder or pertaining thereto, together, in each case,
with the product lines and goodwill of the business
connected with the use of, and symbolized by, each such
trade name, trademark and service mark.
"Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect from time to time in the State
of New York.
Section 2. Representations and Warranties. The
Subsidiary Guarantor represents and warrants to the Lenders and
the Agent that:
2.01 No Breach. None of the execution and delivery of
this Agreement, the making of the Subsidiary Advances, the
consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict
with or result in a breach of, or require any consent under, any
applicable law or regulation, or an order, writ, injunction or
decree of any court or governmental authority or agency, or any
agreement or instrument to which the Subsidiary Guarantor or any
of its Subsidiaries is a party or by which any of them is bound
or to which any of them is subject, or constitute a default under
any such agreement or instrument, or (except for the Liens
created hereunder) result in the creation or imposition of any
Lien upon any Property of the Subsidiary Guarantor or any such
Subsidiary pursuant to the terms of any such agreement or
instrument.
2.02 Action. This Agreement has been duly and validly
executed and delivered by the Subsidiary Guarantor and
constitutes its legal, valid and binding obligation, enforceable
in accordance with its terms.
2.03 Approvals. No authorizations, approvals or
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency, or any securities
exchange are necessary for the execution, delivery or performance
by the Subsidiary of this Agreement or for the validity or
enforceability hereof or for the making of the Subsidiary
Advances.
2.04 Taxes. The Subsidiary Guarantor and its
Subsidiaries have filed all Federal income tax returns and all
material tax returns that are required to be filed by the
Subsidiary Guarantor and its Subsidiaries and have paid all taxes
due pursuant to such returns or pursuant to any assessment
received by the Subsidiary Guarantor or any of its Subsidiaries.
2.05 Collateral.
(a) The Subsidiary Guarantor is (or, at the time that
the Subsidiary Guarantor acquires any interest therein, will
be) the sole beneficial owner of the Collateral and no Lien
exists or will exist upon the Collateral at any time (and no
right or option to acquire the same exists in favor of any
other Person), except for Liens permitted under Section 9.06
of the Credit Agreement and except for the pledge and
security interest in favor of the Agent for the benefit of
the Lenders created or provided for herein, which pledge and
security interest constitute a perfected pledge and security
interest in and to all of the Collateral (other than
Intellectual Property registered or otherwise located
outside of the United States of America), subject to no
equal or prior security interest or pledge except as
permitted under Section 9.06 of the Credit Agreement.
(b) The Pledged Stock represented by the certificates
identified in Annex 1 hereto is, and all other Pledged Stock
in which the Subsidiary Guarantor shall hereafter grant a
security interest pursuant to Section 3 hereof will be, duly
authorized, validly existing, fully paid and non-assessable
and none of such Pledged Stock is or will be subject to any
contractual restriction, or any restriction under the
charter or by-laws of the relevant issuer thereof, upon the
transfer of such Pledged Stock (except for any such
restriction contained herein or in the Credit Agreement).
(c) The Pledged Stock represented by the certificates
identified in Annex 1 hereto constitutes all of the issued
and outstanding shares of capital stock of each class of
each issuer thereof on the date hereof (or, in the case of
any Foreign Subsidiary, not less than 65% of the issued and
outstanding shares of capital stock of each class of such
Foreign Subsidiary on the date hereof), and said Annex 1
correctly identifies, as at the date hereof, the respective
class and par value of the shares comprising such Pledged
Stock, the respective number of shares represented by each
such certificate, and the respective beneficial and
registered owner of such shares.
(d) Annexes 2, 3 and 4 hereto, respectively, set forth
a complete and correct list of all Copyrights, Patents and
Trademarks owned by the Subsidiary Guarantor on the date
hereof; except pursuant to licenses and other user
agreements entered into by the Subsidiary Guarantor in the
ordinary course of business, that are listed in Annex 5
hereto, the Subsidiary Guarantor owns and possesses the
right to use, and has done nothing to authorize or enable
any other Person to use, any Copyright, Patent or Trademark
listed in said Annexes 2, 3 and 4, and all registrations
listed in said Annexes 2, 3 and 4 are valid and in full
force and effect; except as may be set forth in said
Annex 5, the Subsidiary Guarantor owns and possesses the
right to use all Copyrights, Patents and Trademarks.
(e) Annex 5 hereto sets forth a complete and correct
list of all licenses and other user agreements included in
the Intellectual Property on the date hereof.
(f) To the Subsidiary Guarantor's knowledge,
(i) except as set forth in Annex 5 hereto, there is no
violation by others of any right of the Subsidiary Guarantor
with respect to any Copyright, Patent or Trademark listed in
Annexes 2, 3 and 4 hereto, respectively, and (ii) the
Subsidiary Guarantor is not infringing in any respect upon
any Copyright, Patent or Trademark of any other Person; and
no proceedings have been instituted or are pending against
the Subsidiary Guarantor or, to the Subsidiary Guarantor's
knowledge, threatened, and no claim against the Subsidiary
Guarantor has been received by the Subsidiary Guarantor,
alleging any such violation, except as may be set forth in
said Annex 5.
(g) The Subsidiary Guarantor does not own any
Trademarks registered in the United States of America to
which the last sentence of the definition of Trademark
Collateral applies.
(h) Any goods now or hereafter produced by the
Subsidiary Guarantor or any of its Subsidiaries included in
the Collateral have been and will be produced in compliance
with the requirements of the Fair Labor Standards Act, as
amended.
Section 3. The Guarantee.
3.01 The Guarantee. The Subsidiary Guarantor hereby
guarantees to each Lender and the Agent and their respective
successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the
principal of and interest on the Loans made by the Lenders to the
Company and all other amounts from time to time owing to the
Lenders or the Agent by the Company under the Credit Agreement
and by the Company under any if the other Basic Documents, and
all obligations of the Company to any Lender in respect of any
Interest Rate Protection Agreement and all Reimbursement
Obligations and interest thereon, in each case strictly in
accordance with the terms thereof (such obligations being herein
collectively called the "Guaranteed Obligations"). The
Subsidiary Guarantor hereby further agrees that if the Company
shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations,
the Subsidiary Guarantor will promptly pay the same, without any
demand or notice whatsoever, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
3.02 Obligations Unconditional. The obligations of
the Subsidiary Guarantor under Section 3.01 hereof are absolute
and unconditional irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of the
Company under the Credit Agreement or any other agreement or
instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor, it
being the intent of this Section 3.02 that the obligations of the
Subsidiary Guarantor hereunder shall be absolute and
unconditional under any and all circumstances. Without limiting
the generality of the foregoing, it is agreed that the occurrence
of any one or more of the following shall not alter or impair the
liability of the Subsidiary Guarantor hereunder which shall
remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice
to the Subsidiary Guarantor, the time for any performance of
or compliance with any of the Guaranteed Obligations shall
be extended, or such performance or compliance shall be
waived;
(ii) any of the acts mentioned in any of the
provisions of the Credit Agreement or any other agreement or
instrument referred to herein or therein shall be done or
omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed
Obligations shall be modified, supplemented or amended in
any respect, or any right under the Credit Agreement or any
other agreement or instrument referred to herein or therein
shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be
released or exchanged in whole or in part or otherwise dealt
with; or
(iv) any lien or security interest granted to, or in
favor of, the Agent or any Lender or Lenders as security for
any of the Guaranteed Obligations shall fail to be
perfected.
The Subsidiary Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Lender
exhaust any right, power or remedy or proceed against the Company
under the Credit Agreement or any other agreement or instrument
referred to herein or therein, or against any other Person under
any other guarantee of, or security for, any of the Guaranteed
Obligations.
3.03 Reinstatement. The obligations of the Subsidiary
Guarantor under this Section 3 shall be automatically reinstated
if and to the extent that for any reason any payment by or on
behalf of any Obligor in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the
Subsidiary Guarantor agrees that it will indemnify the Agent and
each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees of counsel) incurred by the
Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
3.04 Subrogation. The Subsidiary Guarantor hereby
waives, until payment in full of the Guaranteed Obligations, all
rights of subrogation or contribution, whether arising by
contract or operation of law (including, without limitation, any
such right arising under the Federal Bankruptcy Code) or
otherwise by reason of any payment by it pursuant to the
provisions of this Section 3.
3.05 Remedies. The Subsidiary Guarantor agrees that,
as between the Subsidiary Guarantor and the Lenders, the
obligations of the Company under the Credit Agreement may be
declared to be forthwith due and payable as provided in
Section 10 of the Credit Agreement (and shall be deemed to have
become automatically due and payable in the circumstances
provided in said Section 10) for purposes of Section 3.01 hereof
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company and that,
in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall
forthwith become due and payable by the Subsidiary Guarantor for
purposes of said Section 3.01.
3.06 Continuing Guarantee. The guarantee in this
Section 3 is a continuing guarantee, and shall apply to all
Guaranteed Obligations whenever arising.
3.07 General Limitation on Guarantee Obligations. The
obligations of the Subsidiary Guarantor under Section 3.01 hereof
shall be limited to the sum of (i) the aggregate outstanding
amount of Lagasse Advances and (ii) the amount, if any,
recoverable by any holders of Senior Subordinated Debt pursuant
to any guarantee by the Subsidiary Guarantor of such Senior
Subordinated Debt. In addition, in any action or proceeding
involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of the
Subsidiary Guarantor under Section 3.01 hereof would otherwise be
held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of
the amount of its liability under said Section 3.01, then,
notwithstanding any other provision hereof to the contrary, the
amount of such liability shall, without any further action by
such Subsidiary Guarantor, any Lender, the Agent or any other
Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or
proceeding.
Section 4. Collateral. As collateral security for the
prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations, the
Subsidiary Guarantor hereby pledges and grants to the Agent, for
the benefit of the Lenders as hereinafter provided, a security
interest in all of the Subsidiary Guarantor's right, title and
interest in the following Property, whether now owned by the
Subsidiary Guarantor or hereafter acquired and whether now
existing or hereafter coming into existence (all being
collectively referred to herein as "Collateral"):
(a) the shares of common/preferred stock of the
Issuers represented by the certificates identified in
Annex 1 hereto and all other shares of capital stock of
whatever class of the Issuers, now or hereafter owned by the
Subsidiary Guarantor, in each case together with the
certificates evidencing the same (collectively, the "Pledged
Stock");
(b) all shares, securities, moneys or Property
representing a dividend on any of the Pledged Stock, or
representing a distribution or return of capital upon or in
respect of the Pledged Stock, or resulting from a split-up,
revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor,
and any subscription warrants, rights or options issued to
the holders of, or otherwise in respect of, the Pledged
Stock;
(c) without affecting the obligations of the
Subsidiary Guarantor under any provision prohibiting such
action hereunder or under the Credit Agreement, in the event
of any consolidation or merger in which an Issuer is not the
surviving corporation, all shares of each class of the
capital stock of the successor corporation (unless such
successor corporation is the Subsidiary Guarantor itself)
formed by or resulting from such consolidation or merger
(the Pledged Stock, together with all other certificates,
shares, securities, properties or moneys as may from time to
time be pledged hereunder pursuant to clause (a) or (b)
above and this clause (c) being herein collectively called
the "Stock Collateral");
(d) all accounts and general intangibles (each as
defined in the Uniform Commercial Code) of the Subsidiary
Guarantor constituting any right to the payment of money,
including (but not limited to) all moneys due and to become
due to the Subsidiary Guarantor in respect of any loans or
advances or for Inventory or Equipment or other goods sold
or leased or for services rendered, all moneys due and to
become due to the Subsidiary Guarantor under any guarantee
(including a letter of credit) of the purchase price of
Inventory or Equipment sold by the Subsidiary Guarantor and
all tax refunds (such accounts, general intangibles and
moneys due and to become due being herein called
collectively "Accounts");
(e) all instruments, chattel paper or letters of
credit (each as defined in the Uniform Commercial Code) of
the Subsidiary Guarantor evidencing, representing, arising
from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Accounts,
including (but not limited to) promissory notes, drafts,
bills of exchange and trade acceptances (herein collectively
called "Instruments");
(f) all inventory (as defined in the Uniform
Commercial Code) of the Subsidiary Guarantor, all goods
obtained by the Subsidiary Guarantor in exchange for such
inventory, and any products made or processed from such
inventory including all substances, if any, commingled
therewith or added thereto (herein collectively called
"Inventory");
(g) all Intellectual Property and all other accounts or
general intangibles not constituting Intellectual Property
or Accounts;
(h) all equipment (as defined in the Uniform
Commercial Code) of the Subsidiary Guarantor, including all
Motor Vehicles (herein collectively called "Equipment");
(i) each contract and other agreement of the
Subsidiary Guarantor relating to the sale or other
disposition of Inventory or Equipment;
(j) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of the Subsidiary
Guarantor covering, evidencing or representing Inventory or
Equipment (herein collectively called "Documents");
(k) all rights, claims and benefits of the Subsidiary
Guarantor against any Person arising out of, relating to or
in connection with Inventory or Equipment purchased by the
Subsidiary Guarantor, including, without limitation, any
such rights, claims or benefits against any Person storing
or transporting such Inventory or Equipment;
(l) the balance from time to time in the Lagasse
Collateral Account; and
(m) all other tangible and intangible personal
Property and fixtures of the Subsidiary Guarantor,
including, without limitation, all proceeds, products,
offspring, accessions, rents, profits, income, benefits,
substitutions and replacements of and to any of the Property
of the Subsidiary Guarantor described in the preceding
clauses of this Section 4 (including, without limitation,
any proceeds of insurance thereon and all causes of action,
claims and warranties now or hereafter held by the
Subsidiary Guarantor in respect of any of the items listed
above) and, to the extent related to any Property described
in said clauses or such proceeds, products and accessions,
all books, correspondence, credit files, records, invoices
and other papers, including without limitation all tapes,
cards, computer runs and other papers and documents in the
possession or under the control of the Subsidiary Guarantor
or any computer bureau or service company from time to time
acting for the Subsidiary Guarantor.
provided that Collateral shall not include (i) shares of capital
stock of any class issued by any Foreign Subsidiary to the extent
that the percentage of issued and outstanding shares of capital
stock of such class subject to the Lien of this Agreement would
constitute more than 65% of the issued and outstanding shares of
capital stock of such class and (ii) any tangible personal
Property located outside the United States of America.
Section 5. Cash Proceeds of Collateral.
5.01 Lagasse Collateral Account. The Agent shall
establish with Chase a cash collateral account (the "Lagasse
Collateral Account") in the name and under the control of the
Agent into which there shall be deposited from time to time the
cash proceeds of any of the Collateral (including proceeds of
insurance thereon) and into which the Subsidiary Guarantor may
from time to time deposit any additional amounts that it wishes
to pledge to the Agent for the benefit of the Lenders as
additional collateral security hereunder or that, as provided in
Sections 2.10 and 10 of the Credit Agreement, the Company is
required to pledge as additional collateral security hereunder.
The balance from time to time in the Lagasse Collateral Account
shall constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied as
hereinafter provided. As promptly as possible after any amount
is deposited into the Lagasse Collateral Account pursuant to the
second or third sentence of Section 5.02 hereof, the Agent shall
remit the balance of such amount (if any) to the Subsidiary
Guarantor's account with Chase. However, the Agent may (and, if
instructed by the Lenders of the Credit Agreement shall) at any
time in its (or their) discretion apply or cause to be applied
the balance from time to time outstanding to the credit of the
Lagasse Collateral Account to the repayment of the principal of
the Revolving Credit Loans outstanding, to accrued interest on
the principal so repaid, and to the payment of any commitment
fees with respect to the Revolving Credit Commitments, in each
case the Credit Agreement and to the extent of the Subsidiary
Guarantor's obligations hereunder. Notwithstanding the above, at
any time following the occurrence and during the continuance of
an Event of Default, the Agent may (and, if instructed by the
Lenders as specified in Section 11.03 of the Credit Agreement,
shall) in its (or their) discretion apply or cause to be applied
(subject to collection) the balance from time to time standing to
the credit of the Lagasse Collateral Account to the payment of
the Secured Obligations in the manner specified in Section 6.09
hereof. The balance from time to time in the Lagasse Collateral
Account shall be subject to withdrawal only as provided herein.
5.02 Proceeds of Accounts. The Subsidiary Guarantor
shall within 90 days of the Effective Date instruct all account
debtors and other Persons obligated in respect of all Accounts to
make all payments in respect of the Accounts either (a) directly
to the Agent (by instructing that such payments be remitted to a
post office box which shall be in the name and under the control
of the control of the Agent) or (b) to one or more other banks in
the United States of America (by instructing that such payments
be remitted to a post office box which shall be in the name and
under the control of such other bank(s)) under arrangements, in
form and substance satisfactory to the Agent pursuant to which
the Subsidiary Guarantor shall have irrevocably instructed such
other bank (and such other bank shall have agreed) to remit all
proceeds of such payments directly to the Agent for deposit into
the Lagasse Collateral Account. All payments made to the Agent,
as provided in the preceding sentence, shall be immediately
deposited in the Lagasse Collateral Account. In addition to the
foregoing, the Subsidiary Guarantor agrees that if the proceeds
of any Collateral hereunder (including the payments made in
respect of Accounts) shall be received by it, the Subsidiary
Guarantor shall as promptly as possible deposit such proceeds
into the Lagasse Collateral Account. Until so deposited, all
such proceeds shall be held in trust by the Subsidiary Guarantor
for and as the Property of the Agent and shall not be commingled
with any other funds or Property of the Subsidiary Guarantor.
5.03 Investment of Balance in Lagasse Collateral
Account. Amounts on deposit in the Lagasse Collateral Account
shall be invested from time to time in such Permitted Investments
as the Subsidiary Guarantor (or, after the occurrence and during
the continuance of a Default, the Agent) shall determine, which
Permitted Investments shall be held in the name and be under the
control of the Agent, provided that (i) at any time after the
occurrence and during the continuance of an Event of Default, the
Agent may (and, if instructed by the Lenders as specified in
Section 11.03 of the Credit Agreement, shall) in its (or their)
discretion at any time and from time to time elect to liquidate
any such Permitted Investments and to apply or cause to be
applied the proceeds thereof to the payment of the Secured
Obligations in the manner specified in Section 6.09 hereof and
(ii) if requested by the Subsidiary Guarantor, such Permitted
Investments may be held in the name and under the control of one
or more of the Lenders (and in that connection each Lender,
pursuant to Section 11.10 of the Credit Agreement) has agreed
that such Permitted Investments shall be held by such Lender as a
collateral sub-agent for the Agent hereunder).
5.04 Cover for Letter of Credit Liabilities. Amounts
deposited into the Lagasse Collateral Account as cover for Letter
of Credit Liabilities under the Credit Agreement pursuant to
Section 2.10(h) or Section 10 of the Credit Agreement shall be
held by the Agent in a separate sub-account (designated "Letter
of Credit Liabilities Sub-Account") and all amounts held in such
sub-account shall constitute collateral security first for the
Letter of Credit Liabilities outstanding from time to time and
second as collateral security for the other Secured Obligations
hereunder.
Section 6. Further Assurances; Remedies. In
furtherance of the grant of the pledge and security interest
pursuant to Section 4 hereof, the Subsidiary Guarantor hereby
agrees with each Lender and the Agent as follows:
6.01 Delivery and Other Perfection. The Subsidiary
Guarantor shall:
(a) if any of the shares, securities, moneys or
Property required to be pledged by the Subsidiary Guarantor
under clauses (a), (b) and (c) of Section 4 hereof are
received by the Subsidiary Guarantor, forthwith either
(x) transfer and deliver to the Agent such shares or
securities so received by the Subsidiary Guarantor (together
with the certificates for any such shares and securities
duly endorsed in blank or accompanied by undated stock
powers duly executed in blank), all of which thereafter
shall be held by the Agent, pursuant to the terms of this
Agreement, as part of the Collateral or (y) take such other
action as the Agent shall deem necessary or appropriate to
duly record the Lien created hereunder in such shares,
securities, moneys or Property in said clauses (a), (b)
and (c);
(b) deliver and pledge to the Agent any and all
Instruments, endorsed and/or accompanied by such instruments
of assignment and transfer in such form and substance as the
Agent may request; provided, that so long as no Default
shall have occurred and be continuing, the Subsidiary
Guarantor may retain for collection in the ordinary course
any Instruments received by the Subsidiary Guarantor in the
ordinary course of business and the Agent shall, promptly
upon request of the Subsidiary Guarantor, make appropriate
arrangements for making any Instrument pledged by the
Subsidiary Guarantor available to the Subsidiary Guarantor
for purposes of presentation, collection or renewal (any
such arrangement to be effected, to the extent deemed
appropriate by the Agent, against trust receipt or like
document);
(c) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document, agreement
or other papers that may be necessary or desirable (in the
judgment of the Agent) to create, preserve, perfect or
validate the security interest granted pursuant hereto or to
enable the Agent to exercise and enforce its rights
hereunder with respect to such pledge and security interest,
including, without limitation, after the occurrence of an
Event of Default, causing any or all of the Stock Collateral
to be transferred of record into the name of the Agent or
its nominee (and the Agent agrees that if any Stock
Collateral is transferred into its name or the name of its
nominee, the Agent will thereafter promptly give to the
Subsidiary Guarantor copies of any notices and
communications received by it with respect to the Stock
Collateral), provided that notices to account debtors in
respect of any Accounts or Instruments shall be subject to
the provisions of clause (i) below;
(d) without limiting the obligations of the Subsidiary
Guarantor under Section 6.04(c) hereof, upon the acquisition
after the date hereof by the Subsidiary Guarantor of any
Equipment covered by a certificate of title or ownership,
cause the Agent to be listed as the lienholder on such
certificate of title and within 120 days of the acquisition
thereof deliver evidence of the same to the Agent;
(e) keep full and accurate books and records relating
to the Collateral, and stamp or otherwise mark such books
and records in such manner as the Agent may reasonably
require in order to reflect the security interests granted
by this Agreement;
(f) furnish to the Agent from time to time (but,
unless a Default shall have occurred and be continuing, no
more frequently than quarterly) statements and schedules
further identifying and describing the Copyright Collateral,
the Patent Collateral and the Trademark Collateral,
respectively, and such other reports in connection with the
Copyright Collateral, the Patent Collateral and the
Trademark Collateral, as the Agent may reasonably request,
all in reasonable detail;
(g) promptly upon request of the Agent, following
receipt by the Agent of any statements, schedules or reports
pursuant to clause (f) above, modify this Agreement by
amending Annexes 2, 3 and/or 4 hereto, as the case may be,
to include any Copyright, Patent or Trademark that becomes
part of the Collateral under this Agreement;
(h) permit representatives of the Agent, upon
reasonable notice, at any time during normal business hours
to inspect and make abstracts from its books and records
pertaining to the Collateral, and permit representatives of
the Agent to be present at the Subsidiary Guarantor's place
of business to receive copies of all communications and
remittances relating to the Collateral, and forward copies
of any notices or communications received by the Subsidiary
Guarantor with respect to the Collateral, all in such manner
as the Agent may require; and
(i) upon the occurrence and during the continuance of
any Default, upon request of the Agent, promptly notify (and
the Subsidiary Guarantor hereby authorizes the Agent so to
notify) each account debtor in respect of any Accounts or
Instruments that such Collateral has been assigned to the
Agent hereunder, and that any payments due or to become due
in respect of such Collateral are to be made directly to the
Agent.
6.02 Other Financing Statements and Liens. Except for
financing statements securing Liens expressly permitted by
Section 9.06 of the Credit Agreement and protective filings filed
against the Company in respect of equipment, furniture or
fixtures leased to or Property consigned with the Subsidiary
Guarantor, the Subsidiary Guarantor shall not file or suffer to
be on file, or authorize or permit to be filed or to be on file,
in any jurisdiction, any financing statement or like instrument
with respect to the Collateral in which the Agent is not named as
the sole secured party for the benefit of the Lenders.
6.03 Preservation of Rights. The Agent shall not be
required to take steps necessary to preserve any rights against
prior parties to any of the Collateral.
6.04 Special Provisions Relating to Certain
Collateral.
(a) Stock Collateral.
(1) The Subsidiary Guarantor will cause the Stock
Collateral to constitute at all times 100% (or, with respect to
any issuer that is a Foreign Subsidiary, at least 65%) of the
total number of shares of each class of capital stock of each
Issuer then outstanding.
(2) Unless an Event of Default shall have occurred and
be continuing, and the Agent shall have given notice to the
Company of its intention to exercise rights arising hereunder or
under any other Basic Document with respect to the Stock
Collateral, the Subsidiary Guarantor shall have the right to
exercise all voting, consensual and other powers of ownership
pertaining to the Stock Collateral for all purposes not
inconsistent with the terms of this Agreement, the Credit
Agreement or any other instrument or agreement referred to herein
or therein, provided that the Subsidiary Guarantor agrees that it
will not vote the Stock Collateral in any manner that is
inconsistent with the terms of this Agreement, the Credit
Agreement or any such other instrument or agreement; and the
Agent shall execute and deliver to the Subsidiary Guarantor or
cause to be executed and delivered to the Subsidiary Guarantor
all such proxies, powers of attorney, dividend and other orders,
and all such instruments, without recourse, as the Subsidiary
Guarantor may reasonably request for the purpose of enabling the
Subsidiary Guarantor to exercise the rights and powers that it is
entitled to exercise pursuant to this Section 6.04(a)(2).
(3) Unless and until an Event of Default has occurred
and is continuing, the Subsidiary Guarantor shall be entitled to
receive and retain any dividends on the Stock Collateral paid in
cash out of earned surplus.
(4) If any Event of Default shall have occurred, then
so long as such Event of Default shall continue, and whether or
not the Agent or any Lender exercises any available right to
declare any Secured Obligation due and payable or seeks or
pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Credit Agreement or
any other agreement relating to such Secured Obligation, all
dividends and other distributions on the Stock Collateral shall
be paid directly to the Agent and retained by it as part of the
Stock Collateral, subject to the terms of this Agreement, and, if
the Agent shall so request in writing, the Subsidiary Guarantor
agrees to execute and deliver to the Agent appropriate additional
dividend, distribution and other orders and documents to that
end, provided that if such Event of Default is cured, any such
dividend or distribution theretofore paid to the Agent shall,
upon request of the Subsidiary Guarantor (except to the extent
theretofore applied to the Secured Obligations), be returned by
the Agent to the Subsidiary Guarantor.
(b) Intellectual Property.
(1) For the purpose of enabling the Agent to exercise
rights and remedies under Section 6.05 hereof at such time as the
Agent shall be lawfully entitled to exercise such rights and
remedies, and for no other purpose, the Subsidiary Guarantor
hereby grants to the Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment
of royalty or other compensation to the Subsidiary Guarantor) to
use, assign, license or sublicense any of the Intellectual
Property now owned or hereafter acquired by the Subsidiary
Guarantor, wherever the same may be located, including in such
license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof.
(2) Notwithstanding anything contained herein to the
contrary, but subject to the provisions of Section 9.05 of the
Credit Agreement that limit the right of the Subsidiary Guarantor
to dispose of its Property, so long as no Event of Default shall
have occurred and be continuing, the Subsidiary Guarantor will be
permitted to exploit, use, enjoy, protect, license, sublicense,
assign, sell, dispose of or take other actions with respect to
the Intellectual Property in the ordinary course of the business
of the Subsidiary Guarantor. In furtherance of the foregoing,
unless an Event of Default shall have occurred and be continuing
the Agent shall from time to time, upon the request of the
Subsidiary Guarantor, execute and deliver any instruments,
certificates or other documents, in the form so requested, that
the Subsidiary Guarantor shall have certified are appropriate (in
its judgment) to allow it to take any action permitted above
(including relinquishment of the license provided pursuant to
clause (1) immediately above as to any specific Intellectual
Property). Further, upon the payment in full of all of the
Secured Obligations and cancellation or termination of the
Commitments and Letter of Credit Liabilities or earlier
expiration of this Agreement or release of the Collateral, the
license granted pursuant to clause (1) immediately above shall
expire by its own terms without further action on the part of the
Company or the Agent. The exercise of rights and remedies under
Section 6.05 hereof by the Agent shall not terminate the rights
of the holders of any licenses or sublicenses theretofore granted
by the Subsidiary Guarantor in accordance with the first sentence
of this clause (2).
(c) Motor Vehicles. At any time after the occurrence
and during the continuance of an Event of Default, the Subsidiary
Guarantor shall, upon the request of the Agent, deliver to the
Agent originals of the certificates of title or ownership for the
Motor Vehicles owned by it with the Agent listed as lienholder
and take such other action as the Agent shall deem appropriate to
perfect the security interest created hereunder in all such Motor
Vehicles.
6.05 Events of Default, Etc. During the period during
which an Event of Default shall have occurred and be continuing:
(a) the Subsidiary Guarantor shall, at the request of
the Agent, assemble the Collateral owned by it at such place
or places, reasonably convenient to both the Agent and the
Subsidiary Guarantor, designated in its request;
(b) the Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the
Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of,
any of the Collateral;
(c) the Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party
under the Uniform Commercial Code (whether or not said Code
is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws
in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to
exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Agent were
the sole and absolute owner thereof (and the Subsidiary
Guarantor agrees to take all such action as may be
appropriate to give effect to such right);
(d) the Agent in its discretion may, in its name or in
the name of the Subsidiary Guarantor or otherwise, demand,
sue for, collect or receive any money or Property at any
time payable or receivable on account of or in exchange for
any of the Collateral, but shall be under no obligation to
do so; and
(e) the Agent may, upon ten business days' prior
written notice to the Subsidiary Guarantor of the time and
place, with respect to the Collateral or any part thereof
that shall then be or shall thereafter come into the
possession, custody or control of the Agent, the Lenders or
any of their respective agents, sell, lease, assign or
otherwise dispose of all or any part of such Collateral, at
such place or places as the Agent deems best, and for cash
or for credit or for future delivery (without thereby
assuming any credit risk), at public or private sale,
without demand of performance or notice of intention to
effect any such disposition or of the time or place thereof
(except such notice as is required above or by applicable
statute and cannot be waived), and the Agent or any Lender
or anyone else may be the purchaser, lessee, assignee or
recipient of any or all of the Collateral so disposed of at
any public sale (or, to the extent permitted by law, at any
private sale) and thereafter hold the same absolutely, free
from any claim or right of whatsoever kind, including any
right or equity of redemption (statutory or otherwise), of
the Subsidiary Guarantor, any such demand, notice and right
or equity being hereby expressly waived and released. In
the event of any sale, assignment, or other disposition of
any of the Trademark Collateral, the goodwill connected with
and symbolized by the Trademark Collateral subject to such
disposition shall be included, and the Subsidiary Guarantor
shall supply to the Agent or its designee, for inclusion in
such sale, assignment or other disposition, all Intellectual
Property relating to such Trademark Collateral. The Agent
may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to
which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under
this Section 6.05, including by virtue of the exercise of the
license granted to the Agent in Section 6.04(b) hereof, shall be
applied in accordance with Section 6.09 hereof.
The Subsidiary Guarantor recognizes that, by reason of
certain prohibitions contained in the Securities Act of 1933, as
amended, and applicable state securities laws, the Agent may be
compelled, with respect to any sale of all or any part of the
Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account,
for investment and not with a view to the distribution or resale
thereof. The Subsidiary Guarantor acknowledges that any such
private sales may be at prices and on terms less favorable to the
Agent than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Agent shall have no
obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to
permit the respective Issuer or issuer thereof to register it for
public sale.
6.06 Deficiency. If the proceeds of sale, collection
or other realization of or upon the Collateral pursuant to
Section 6.05 hereof are insufficient to cover the costs and
expenses of such realization and the payment in full of the
Secured Obligations, the Subsidiary Guarantor shall remain liable
for any deficiency.
6.07 Removals, Etc. Without at least 30 days' prior
written notice to the Agent, the Subsidiary Guarantor shall not
(i) maintain any of its books and records with respect to the
Collateral at any office or maintain its principal place of
business at any place, or permit any Inventory or Equipment to be
located anywhere, other than at the address indicated beneath the
signature of the Company to the Credit Agreement or at one of the
locations identified in Annex 6 hereto or in transit from one of
such locations to another or (ii) change its name, or the name
under which it does business, from the name shown on the
signature pages hereto.
6.08 Private Sale. The Agent and the Lenders shall
incur no liability as a result of the sale of the Collateral, or
any part thereof, at any private sale pursuant to Section 6.05
hereof conducted in a commercially reasonable manner. The
Subsidiary Guarantor hereby waives any claims against the Agent
or any Lender arising by reason of the fact that the price at
which the Collateral may have been sold at such a private sale
was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured
Obligations, even if the Agent accepts the first offer received
and does not offer the Collateral to more than one offeree.
6.09 Application of Proceeds. Except as otherwise
herein expressly provided and except as provided below in this
Section 6.09, the proceeds of any collection, sale or other
realization of all or any part of the Collateral pursuant hereto,
and any other cash at the time held by the Agent under Section 5
hereof or this Section 6, shall be applied by the Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Agent and the fees
and expenses of its agents and counsel, and all expenses
incurred and advances made by the Agent in connection
therewith;
Next, to the payment in full of the Secured
Obligations, in each case equally and ratably in accordance
with the respective amounts thereof then due and owing or as
the Lenders holding the same may otherwise agree; and
Finally, to the payment to the Subsidiary Guarantor, or
its successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
Notwithstanding the foregoing, the proceeds of any cash or other
amounts held in the "Letter of Credit Liabilities Sub-Account" of
the Lagasse Collateral Account pursuant to Section 5.04 hereof
shall be applied first to the Letter of Credit Liabilities
outstanding from time to time and second to the other Secured
Obligations in the manner provided above in this Section 6.09.
As used in this Section 6, "proceeds" of Collateral
shall mean cash, securities and other Property realized in
respect of, and distributions in kind of, Collateral, including
any thereof received under any reorganization, liquidation or
adjustment of debt of the Subsidiary Guarantor or any issuer of
or obligor on any of the Collateral.
6.10 Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Agent while no Event of
Default has occurred and is continuing, upon the occurrence and
during the continuance of any Event of Default the Agent is
hereby appointed the attorney-in-fact of the Subsidiary Guarantor
for the purpose of carrying out the provisions of this Section 6
and taking any action and executing any instruments that the
Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the
foregoing, so long as the Agent shall be entitled under this
Section 6 to make collections in respect of the Collateral, the
Agent shall have the right and power to receive, endorse and
collect all checks made payable to the order of the Subsidiary
Guarantor representing any dividend, payment or other
distribution in respect of the Collateral or any part thereof and
to give full discharge for the same.
6.11 Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, the Subsidiary
Guarantor shall (i) file such financing statements and other
documents in such offices as the Agent may request to perfect the
security interests granted by Section 4 of this Agreement,
(ii) at the request of the Agent, cause the Agent to be listed as
the lienholder on all certificates of title or ownership relating
to Motor Vehicles owned by the Subsidiary Guarantor and (iii)
deliver to the Agent all certificates identified in Annex 1
hereto, accompanied by undated stock powers duly executed in
blank.
6.12 Termination. When all Secured Obligations shall
have been paid in full and the Commitments of the Lenders under
the Credit Agreement and all Letter of Credit Liabilities shall
have expired or been terminated, this Agreement shall terminate,
and the Agent shall forthwith cause to be assigned, transferred
and delivered, against receipt but without any recourse, warranty
or representation whatsoever, any remaining Collateral and money
received in respect thereof, to or on the order of the Subsidiary
Guarantor and to be released and canceled all licenses and rights
referred to in Section 6.04(b) hereof. The Agent shall also
execute and deliver to the Subsidiary Guarantor upon such
termination such Uniform Commercial Code termination statements,
certificates for terminating the Liens on the Motor Vehicles and
such other documentation as shall be reasonably requested by the
Subsidiary Guarantor to effect the termination and release of the
Liens on the Collateral.
6.13 Further Assurances. The Subsidiary Guarantor
agrees that, from time to time upon the written request of the
Agent, the Subsidiary Guarantor will execute and deliver such
further documents and do such other acts and things as the Agent
may reasonably request in order fully to effect the purposes of
this Agreement.
6.14 Release of Motor Vehicles. So long as no Default
shall have occurred and be continuing, upon the request of the
Subsidiary Guarantor, the Agent shall execute and deliver to the
Subsidiary Guarantor such instruments as the Subsidiary Guarantor
shall reasonably request to remove the notation of the Agent as
lienholder on any certificate of title for any Motor Vehicle;
provided that any such instruments shall be delivered, and the
release effective only upon receipt by the Agent of a certificate
from the Subsidiary Guarantor stating that the Motor Vehicle the
lien on which is to be released is to be sold or has suffered a
casualty loss (with title thereto passing to the casualty
insurance company (or its designee) therefor in settlement of the
claim for such loss) and any proceeds of such sale or casualty
loss being paid to the Agent hereunder.
Section 7. Miscellaneous.
7.01 No Waiver. No failure on the part of the Agent
or any Lender to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Agent or any Lender of any right,
power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any
remedies provided by law.
7.02 Notices. All notices, requests, consents and
demands hereunder shall be in writing and telecopied or delivered
to the intended recipient at its "Address for Notices" specified
pursuant to Section 12.02 of the Credit Agreement and shall be
deemed to have been given at the times specified in said
Section 12.02.
7.03 Expenses. The Subsidiary Guarantor agrees to
reimburse each of the Lenders and the Agent for all reasonable
costs and expenses of the Lenders and the Agent (including,
without limitation, the reasonable fees and expenses of legal
counsel) in connection with (i) any Default and any enforcement
or collection proceeding resulting therefrom, including, without
limitation, all manner of participation in or other involvement
with (w) performance by the Agent of any obligations of the
Subsidiary Guarantor in respect of the Collateral that the
Subsidiary Guarantor has failed or refused to perform, (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or
liquidation proceedings, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in
respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of the
Agent in respect thereof, by litigation or otherwise, including
expenses of insurance, (y) judicial or regulatory proceedings and
(z) workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of
this Section 7.03, and all such costs and expenses shall be
Secured Obligations entitled to the benefits of the collateral
security provided pursuant to Section 4 hereof.
7.04 Amendments, Etc. The terms of this Agreement may
be waived, altered or amended only by an instrument in writing
duly executed by the Subsidiary Guarantor and the Agent (with the
consent of the Lenders as specified in Section 11.09 of the
Credit Agreement). Any such amendment or waiver shall be binding
upon the Agent and each Lender, each holder of any of the Secured
Obligations and the Subsidiary Guarantor.
7.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective
successors and assigns of the Subsidiary Guarantor, the Agent,
the Lenders and each holder of any of the Secured Obligations
(provided, however, that the Subsidiary Guarantor shall not
assign or transfer its rights hereunder without the prior written
consent of the Agent).
7.06 Captions. The captions and section headings
appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any
provision of this Agreement.
7.07 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and either of the parties
hereto may execute this Agreement by signing any such
counterpart.
7.08 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the law of the State of New
York.
7.09 Agents and Attorneys-in-Fact. The Agent may
employ agents and attorneys-in-fact in connection herewith and
shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it in good faith.
7.10 Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest
extent permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Agent and the Lenders in
order to carry out the intentions of the parties hereto as nearly
as may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Guarantee and Security Agreement to be duly executed and
delivered as of the day and year first above written.
LAGASSE BROS., INC.
By _________________________
Title:
THE CHASE MANHATTAN BANK
as Agent
By _________________________
Title:
ANNEX 1
Pledged Stock
[See Section 4.05(b) and (c)]
None.
ANNEX 2
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
[See Section 4.05(d)]
Title Date Filed Registration No. Effective Date
ANNEX 3
LIST OF PATENTS AND PATENT APPLICATIONS
[See Section 4.05(d)]
File Patent Country Registration No. Date
ANNEX 4
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE MARK REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS
[See Section 4.05(d)]
U.S. Trademarks
Application (A)
Registration (R) Registration
Mark or Series No. (S) or Filing Date
Foreign Trademarks
Application (A) Registration or
Mark Registration (R) Country Filing Date (F)
ANNEX 5
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
[See Section 4.05(d), (e) and (f)]
ANNEX 6
LIST OF LOCATIONS
[See Section 6.07]
EXECUTION COPY
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT dated as of
October 31, 1996 between UNITED STATIONERS INC., a corporation
duly organized and validly existing under the laws of the State
of Delaware (together with its successors and assigns, the
"Pledgor"); and THE CHASE MANHATTAN BANK, as agent for the
lenders (the "Lenders") party to the Credit Agreement referred to
below (in such capacity, together with its successors in such
capacity, the "Agent").
WHEREAS, United Stationers Supply Co. (as successor by
merger to Associated Stationers, Inc.), a wholly-owned subsidiary
of the Pledgor and a corporation duly organized and validly
existing under the laws of the State of Illinois (the "Company"),
the Pledgor, the Lenders and the Agent are parties to a Credit
Agreement dated as of March 30, 1995 (as amended and restated as
of October 31, 1996 and as further modified and supplemented and
in effect from time to time, the "Credit Agreement"), providing,
subject to the terms and conditions thereof, for extensions of
credit to be made by the Lenders to the Company in an aggregate
principal amount not exceeding on the date hereof, $540,000,000;
WHEREAS, to induce said lenders to enter into the
Credit Agreement and to extend credit thereunder, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Pledgor has agreed to pledge
and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as hereinafter
defined).
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition, as
used herein:
"Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.
"Foreign Subsidiary" shall mean any Subsidiary of the
Pledgor that is not organized or created under the laws of
the United States of America, any State thereof or the
District of Columbia.
"Pledged Stock" shall have the meaning ascribed thereto
in Section 3(a) hereof.
"Secured Obligations" shall mean, collectively, (a) the
Guaranteed Obligations, which include the principal of and
interest on the Loans made by the Lenders to, and the
Note(s) held by each Lender of, the Company and all other
amounts from time to time owing to the Lenders or the Agent
by the Company under the Basic Documents including, without
limitation, all Reimbursement Obligations and interest
thereon, (b) all obligations of the Pledgor under the Credit
Agreement and the other Basic Documents (including, without
limitation, in respect of its Guarantee under Section 6 of
the Credit Agreement) and (c) all obligations of the Pledgor
to the Lenders and the Agent hereunder.
"Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect from time to time in the State
of New York.
Section 2. Representations and Warranties. The
Pledgor represents and warrants to the Lenders and the Agent
that:
(a) The Pledgor is (or at the time that the Pledgor
acquires any interest therein, will be) the sole beneficial
owner of the Collateral and no Lien exists or will exist
upon the Collateral at any time (and no right or option to
acquire the same exists in favor of any other Person),
except for the pledge and security interest in favor of the
Agent for the benefit of the Lenders created or provided for
herein, which pledge and security interest constitute a
first priority perfected pledge and security interest in and
to all of the Collateral.
(b) The Pledged Stock represented by certificates
identified in Annex 1 hereto is, and all other Pledged Stock
in which the Pledgor shall hereafter grant a security
interest pursuant to Section 3 hereof will be, duly
authorized, validly existing, fully paid and non-assessable
and none of such Pledged Stock is or will be subject to any
contractual restriction, or any restriction under the
charter or by-laws of the Company, upon the transfer of such
Pledged Stock (except for any such restriction contained
herein or in the Credit Agreement).
(c) The Pledged Stock represented by certificates
identified in Annex 1 hereto constitutes all of the issued
and outstanding shares of capital stock of any class of the
Company beneficially owned by the Pledgor on the date hereof
(whether or not registered in the name of the Pledgor) and
said Annex 1 correctly identifies, as at the date hereof,
the respective class and par value of the shares represented
by such certificate and, the Pledgor is the registered owner
of all such shares.
Section 3. The Pledge. As collateral security for the
prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations, the
Pledgor hereby pledges and grants to the Agent, for the benefit
of the Lenders as hereinafter provided, a security interest in
all of the Pledgor's right, title and interest in the following
Property, whether now owned by the Pledgor or hereafter acquired
and whether now existing or hereafter coming into existence (all
being collectively referred to herein as "Collateral"):
(a) the shares of common stock of the Company
represented by the certificates identified in Annex 1 hereto
and all other shares of capital stock of whatever class of
the Company or any other Subsidiary of the Pledgor, now or
hereafter owned by the Pledgor, in each case together with
the certificates representing the same (collectively, the
"Pledged Stock");
(b) all shares, securities, moneys or Property
representing a dividend on any of the Pledged Stock, or
representing a distribution or return of capital upon or in
respect of the Pledged Stock, or resulting from a split-up,
revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor,
and any subscription warrants, rights or options issued to
the holders of, or otherwise in respect of, the Pledged
Stock;
(c) without affecting the obligations of the Pledgor
under any provision prohibiting such action hereunder or
under the Credit Agreement, in the event of any
consolidation or merger in which the Company is not the
surviving corporation, all shares of each class of the
capital stock of the successor corporation (unless such
successor corporation is the Company itself) formed by or
resulting from such consolidation or merger; and
(d) all proceeds of and to any of the Property of the
Pledgor described in the preceding clauses of this Section 3
(including, without limitation, all causes of action, claims
and warranties now or hereafter held by the Pledgor in
respect of any of the items listed above) and, to the extent
related to any Property described in said clauses or such
proceeds, all books, correspondence, credit files, records,
invoices and other papers;
provided that Collateral shall not include shares of capital
stock of any class issued by any Foreign Subsidiary to the extent
that the percentage of issued and outstanding shares of capital
stock of such class subject to the Lien of this Agreement would
constitute more than 65% of the issued and outstanding shares of
capital stock of such class.
Section 4. Further Assurances; Remedies. In
furtherance of the grant of the pledge and security interest
pursuant to Section 3 hereof, the Pledgor hereby agrees with each
Lender and the Agent as follows:
4.01 Delivery and Other Perfection. The Pledgor
shall:
(a) if any of the shares, securities, moneys or other
Property required to be pledged by the Pledgor under
clauses (a), (b) and (c) of Section 3 hereof are received by
the Pledgor, forthwith either (x) transfer and deliver to
the Agent such shares or securities so received by the
Pledgor (together with the certificates representing any
such shares and securities duly endorsed in blank or
accompanied by undated stock powers duly executed in blank),
all of which thereafter shall be held by the Agent, pursuant
to the terms of this Agreement, as part of the Collateral or
(y) take such other action as the Agent shall deem necessary
or appropriate to duly record the Lien created hereunder in
such shares, securities, moneys or other Property in said
clauses (a), (b) and (c);
(b) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document, agreement
or other papers that may be necessary or desirable (in the
judgment of the Agent) to create, preserve, perfect or
validate the security interest granted pursuant hereto or to
enable the Agent to exercise and enforce its rights
hereunder with respect to such pledge and security interest,
including, without limitation, following the occurrence of
an Event of Default, causing any or all of the Collateral to
be transferred of record into the name of the Agent or its
nominee (and the Agent agrees that if any Collateral is
transferred into its name or the name of its nominee, the
Agent will thereafter promptly give to the Pledgor copies of
any notices and communications received by it with respect
to the Collateral);
(c) keep full and accurate books and records relating
to the Collateral, and stamp or otherwise mark such books
and records in such manner as the Agent may reasonably
require in order to reflect the security interests granted
by this Agreement; and
(d) permit representatives of the Agent, upon
reasonable notice, at any time during normal business hours
to inspect and make abstracts from its books and records
pertaining to the Collateral, and permit representatives of
the Agent to be present at the Pledgor's place of business
to receive copies of all communications and remittances
relating to the Collateral, and forward copies of any
notices or communications received by the Pledgor with
respect to the Collateral, all in such manner as the Agent
may require.
4.02 Other Financing Statements and Liens. The
Pledgor shall not file or suffer to be on file, or authorize or
permit to be filed or to be on file, in any jurisdiction, any
financing statement or like instrument with respect to the
Collateral in which the Agent is not named as the sole secured
party for the benefit of the Lenders.
4.03 Preservation of Rights. The Agent shall not be
required to take steps necessary to preserve any rights against
prior parties to any of the Collateral.
4.04 Collateral.
(a) The Pledgor will cause the Collateral to
constitute at all times 100% (or, with respect to any issuer that
is a Foreign Subsidiary, at least 65%) of the total number of
shares of each class of capital stock of the Company and each
other Subsidiary of the Pledgor then outstanding.
(b) Unless an Event of Default shall have occurred and
be continuing and the Agent shall have given notice to the
Pledgor of its intention to exercise rights arising hereunder or
under any other Basic Document with respect to the Pledged Stock,
the Pledgor shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the
Collateral for all purposes not inconsistent with the terms of
this Agreement, the Credit Agreement, the Notes or any other
instrument or agreement referred to herein or therein, provided
that the Pledgor agrees that it will not vote the Collateral in
any manner that is inconsistent with the terms of this Agreement,
the Credit Agreement, the Notes or any such other instrument or
agreement; and the Agent shall execute and deliver to the Pledgor
or cause to be executed and delivered to the Pledgor all such
proxies, powers of attorney, dividend and other orders, and all
such instruments, without recourse, as the Pledgor may reasonably
request for the purpose of enabling the Pledgor to exercise the
rights and powers that it is entitled to exercise pursuant to
this Section 4.04(b).
(c) Unless and until an Event of Default has occurred
and is continuing, and subject to the provisions of Section 9.09
of the Credit Agreement, the Pledgor shall be entitled to receive
and retain any dividends on the Collateral paid in cash out of
earned surplus.
(d) If any Event of Default shall have occurred, then
so long as such Event of Default shall continue, and whether or
not the Agent or any Lender exercises any available right to
declare any Secured Obligation due and payable or seeks or
pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Credit Agreement, the
Notes or any other agreement relating to such Secured Obligation,
all dividends and other distributions on the Collateral shall be
paid directly to the Agent and retained by it as part of the
Collateral, subject to the terms of this Agreement, and, if the
Agent shall so request in writing, the Pledgor agrees to execute
and deliver to the Agent appropriate additional dividend,
distribution and other orders and documents to that end, provided
that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of
the Pledgor (except to the extent theretofore applied to the
Secured Obligations), be returned by the Agent to the Pledgor.
4.05 Events of Default, Etc. During the period during
which an Event of Default shall have occurred and be continuing:
(a) the Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party
under the Uniform Commercial Code (whether or not said Code
is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws
in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to
exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Agent were
the sole and absolute owner thereof (and the Pledgor agrees
to take all such action as may be appropriate to give effect
to such right);
(b) the Agent in its discretion may, in its name or in
the name of the Pledgor or otherwise, demand, sue for,
collect or receive any money or property at any time payable
or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so; and
(c) the Agent may, upon ten business days' prior
written notice to the Pledgor of the time and place, with
respect to the Collateral or any part thereof that shall
then be or shall thereafter come into the possession,
custody or control of the Agent, the Lenders or any of their
respective agents, sell, lease, assign or otherwise dispose
of all or any part of such Collateral, at such place or
places as the Agent deems best, and for cash or for credit
or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of
performance or notice of intention to effect any such
disposition or of the time or place thereof (except such
notice as is required above or by applicable statute and
cannot be waived), and the Agent or any Lender or anyone
else may be the purchaser, lessee, assignee or recipient of
any or all of the Collateral so disposed of at any public
sale (or, to the extent permitted by law, at any private
sale) and thereafter hold the same absolutely, free from any
claim or right of whatsoever kind, including any right or
equity of redemption (statutory or otherwise), of the
Pledgor, any such demand, notice and right or equity being
hereby expressly waived and released. The Agent may,
without notice or publication, adjourn any public or private
sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and
such sale may be made at any time or place to which the sale
may be so adjourned.
The proceeds of each collection, sale or other disposition under
this Section 4.05 shall be applied in accordance with
Section 4.09 hereof.
The Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended,
and applicable state securities laws, the Agent may be compelled,
with respect to any sale of all or any part of the Collateral, to
limit purchasers to those who will agree, among other things, to
acquire the Collateral for their own account, for investment and
not with a view to the distribution or resale thereof. The
Pledgor acknowledges that any such private sales may be at prices
and on terms less favorable to the Agent than those obtainable
through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially
reasonable manner and that the Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the
respective issuer thereof to register it for public sale.
4.06 Deficiency. If the proceeds of sale, collection
or other realization of or upon the Collateral pursuant to
Section 4.05 hereof are insufficient to cover the costs and
expenses of such realization and the payment in full of the
Secured Obligations, the Pledgor shall remain liable for any
deficiency.
4.07 Removals, Etc. Without at least 30 days' prior
written notice to the Agent, the Pledgor shall not (i) maintain
any of its books and records with respect to the Collateral at
any office or maintain its principal place of business at any
place other than at 2200 East Golf Road, Des Plaines, Illinois
60016-1267 or (ii) change its name, or the name under which it
does business, from the name shown on the signature pages hereto.
4.08 Private Sale. The Agent and the Lenders shall
incur no liability as a result of the sale of the Collateral, or
any part thereof, at any private sale pursuant to Section 4.05
hereof conducted in a commercially reasonable manner. The
Pledgor hereby waives any claims against the Agent or any Lender
arising by reason of the fact that the price at which the
Collateral may have been sold at such a private sale was less
than the price that might have been obtained at a public sale or
was less than the aggregate amount of the Secured Obligations,
even if the Agent accepts the first offer received and does not
offer the Collateral to more than one offeree.
4.09 Application of Proceeds. Except as otherwise
herein expressly provided, the proceeds of any collection, sale
or other realization of all or any part of the Collateral
pursuant hereto, and any other cash at the time held by the Agent
under this Section 4, shall be applied by the Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Agent and the fees
and expenses of its agents and counsel, and all expenses
incurred and advances made by the Agent in connection
therewith;
Next, to the payment in full of the Secured
Obligations, in each case equally and ratably in accordance
with the respective amounts thereof then due and owing or as
the Lenders holding the same may otherwise agree; and
Finally, to the payment to the Pledgor, or its
successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
As used in this Section 4, "proceeds" of Collateral
shall mean cash, securities and other property realized in
respect of, and distributions in kind of, Collateral, including
any thereof received under any reorganization, liquidation or
adjustment of debt of the Pledgor or any issuer of or obligor on
any of the Collateral.
4.10 Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Agent while no Event of
Default has occurred and is continuing, upon the occurrence and
during the continuance of any Event of Default the Agent is
hereby appointed the attorney-in-fact of the Pledgor for the
purpose of carrying out the provisions of this Section 4 and
taking any action and executing any instruments that the Agent
may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and
coupled with an interest. Without limiting the generality of the
foregoing, so long as the Agent shall be entitled under this
Section 4 to make collections in respect of the Collateral, the
Agent shall have the right and power to receive, endorse and
collect all checks made payable to the order of the Pledgor
representing any dividend, payment or other distribution in
respect of the Collateral or any part thereof and to give full
discharge for the same.
4.11 Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, the Pledgor shall
deliver to the Agent all certificates identified in Section 3(a)
hereof, accompanied by undated stock powers duly executed in
blank.
4.12 Termination. When all Secured Obligations shall
have been paid in full and the Commitments of the Lenders under
the Credit Agreement and all Letter of Credit Liabilities shall
have expired or been terminated, this Agreement shall terminate,
and the Agent shall forthwith cause to be assigned, transferred
and delivered, against receipt but without any recourse, warranty
or representation whatsoever, any remaining Collateral and money
received in respect thereof, to or on the order of the Pledgor.
4.13 Expenses. The Pledgor agrees to pay to the Agent
all out-of-pocket expenses (including reasonable expenses for
legal services of every kind) of, or incident to, the enforcement
of any of the provisions of this Section 4, or performance by the
Agent of any obligations of the Pledgor in respect of the
Collateral which the Pledgor has failed or refused to perform, or
any actual or attempted sale, or any exchange, enforcement,
collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or
asserting rights and claims of the Agent in respect thereof, by
litigation or otherwise, and all such expenses shall be Secured
Obligations to the Agent secured under Section 3 hereof.
4.14 Further Assurances. The Pledgor agrees that,
from time to time upon the written request of the Agent, the
Pledgor will execute and deliver such further documents and do
such other acts and things as the Agent may reasonably request in
order fully to effect the purposes of this Agreement.
Section 5. Miscellaneous.
5.01 No Waiver. No failure on the part of the Agent
or any Lender to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Agent or any Lender of any right,
power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any
remedies provided by law.
5.02 Notices. All notices, requests, consents and
demands hereunder shall be in writing and telecopied or delivered
to the intended recipient at its "Address for Notices" specified
pursuant to Section 12.02 of the Credit Agreement and shall be
deemed to have been given at the times specified in said
Section 12.02.
5.03 Amendments, Etc. The terms of this Agreement may
be waived, altered or amended only by an instrument in writing
duly executed by the Pledgor and the Agent (with the consent of
the Lenders as specified in Section 11.09 of the Credit
Agreement).
5.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective
successors and assigns of the Pledgor, the Agent, the Lenders and
each holder of any of the Secured Obligations (provided, however,
that the Pledgor shall not assign or transfer its rights
hereunder without the prior written consent of the Agent).
5.06 Captions. The captions and section headings
appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any
provision of this Agreement.
5.07 Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall
constitute one and the same instrument and either of the parties
hereto may execute this Agreement by signing any such
counterpart.
5.08 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the law of the State of New
York.
5.09 Agents and Attorneys-in-Fact. The Agent may
employ agents and attorneys-in-fact in connection herewith and
shall not be responsible for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it in good faith.
5.10 Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest
extent permitted by law, (i) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Agent and the Lenders in
order to carry out the intentions of the parties hereto as nearly
as may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this
Pledge Agreement to be duly executed and delivered as of the day
and year first above written.
UNITED STATIONERS INC.
By
Title:
THE CHASE MANHATTAN BANK,
as Agent
By
Title:
EXHIBIT G
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Credit Agreement dated as of March 30,
1995 (the "Credit Agreement" as amended and
restated as of October 31, 1996), among United
Stationers Supply Co. (as successor by merger to
Associated Stationers, Inc., the "Company"),
United Stationers Inc. (as successor by merger to
Associated Holdings, Inc.), as parent guarantor,
the lenders named therein and The Chase Manhattan
Bank, as Agent.
Dear Ladies and Gentlemen:
As a Lender party to the Credit Agreement, we have
agreed with the Company pursuant to Section 12.12 of the Credit
Agreement to use reasonable precautions to keep confidential,
except as otherwise provided therein, all non-public information
identified by the Company as being confidential at the time the
same is delivered to us pursuant to the Credit Agreement.
As provided in said Section 12.12, we are permitted to
provide you, as a prospective [holder of a participation in the
Loans (as defined in the Credit Agreement)] [assignee Lender],
with certain of such non-public information subject to the
execution and delivery by you, prior to receiving such non-public
information, of a Confidentiality Agreement in this form. Such
information will not be made available to you until your
execution and return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you
agree (on behalf of yourself and each of your affiliates,
directors, officers, employees and representatives) that (A) such
information will not be used by you except in connection with the
proposed [participation][assignment] mentioned above and (B) you
shall use reasonable precautions, in accordance with your
customary procedures for handling confidential information and in
accordance with safe and sound practices, to keep such
information confidential, provided that nothing herein shall
limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process,
(ii) to your counsel or to counsel for any of the Lenders or the
Agent, (iii) to regulatory personnel, auditors or accountants,
(iv) to the Agent or any other Lender (or to Chase Securities,
Inc.), (v) in connection with any litigation related to the
Acquisition or the transactions contemplated by the Credit
Agreement or the other Basic Documents to which you or any one or
more of the Lenders or the Agent is a party, or (vi) to a
subsidiary or affiliate of yours as provided in Section 12.12(a)
of the Credit Agreement; and provided that in no event shall you
be obligated to return any materials furnished to you pursuant to
this Confidentiality Agreement.
Please indicate your agreement to the foregoing by
signing as provided below the enclosed copy of this
Confidentiality Agreement and returning the same to us.
Very truly yours,
[INSERT NAME OF LENDER]
By_________________________
The foregoing is agreed to
as of the date of this letter.
[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]
By_________________________
EXHIBIT H
[Form of Notice of Assignment]
NOTICE OF ASSIGNMENT
[Date]
United Stationers Supply Co.
2200 East Golf Road
Des Plaines, IL 60016-1267
The Chase Manhattan Bank, as Agent
4 Chase Metrotech Center -- 13th Floor
Brooklyn, New York 11245
Attention: New York Agency
[Name of Issuing Bank]
_________________________
_________________________
Attention: _____________
Re: Credit Agreement dated as of March 30,
1995 (the "Credit Agreement" as amended and
restated as of October 31, 1996), among United
Stationers Supply Co., as successor by merger to
Associated Stationers, Inc. (the "Company"),
United Stationers Inc., as successor by merger to
Associated Holdings, Inc., as parent guarantor,
the lenders named therein and The Chase Manhattan
Bank, as Agent.
Dear Ladies and Gentlemen:
We hereby give notice that, effective as of the date
hereof, [Name of Assignor] (the "Assignor") has assigned its
rights and obligations with respect to % (representing
$_____________) of the Assignor's outstanding [[Revolving Credit]
[Tranche A Term Loan] [Tranche B Term Loan] Commitment and]
[[Revolving Credit] [Tranche A Term] [Tranche B Term] Loans]
(such interest in such rights and obligations being hereinafter
referred to as the "Assigned Interest") under the Credit
Agreement to [Name of Assignee] (the "Assignee"). The Assignee
hereby agrees (i) to become a "Lender" pursuant to
Section 12.06(b) of the Credit Agreement (if not already a Lender
under the Credit Agreement) and (ii) agrees to assume all the
obligations of the Assignor thereunder with respect to the
Assigned Interest.
The address for notices, lending office(s) and payment
instructions for the Assignee are as follows:
Address for Notices:
Attention:
Telephone:
Telecopier:
Lending Office for Base Rate
Loans:
Lending Office for Loans other
than Base Rate Loans:
Payment Instructions:
[We hereby request the Company to record on the
Register referred to in Section 12.06(g) of the Credit Agreement
the [[Tranche A] [Tranche B]] Term Loans assigned hereunder.]9
Please sign and return the enclosed copy of this letter
to the undersigned to indicate your receipt hereof, and your
consent to or notice of (as applicable) the above-mentioned
assignment and assumption, and your agreement to the release of
the Assignor from its obligations under the Credit Agreement with
respect to the Assigned Interest. As a condition to the
effectiveness of the above-mentioned assignment and assumption,
the Assignee hereby agrees to pay to the Agent on the date hereof
an assignment fee of $3,500.
Very truly yours,
[NAME OF ASSIGNOR]
By
Title:
[NAME OF ASSIGNEE]
By
Title:
ACKNOWLEDGED OR CONSENTED TO
(AS APPLICABLE):
UNITED STATIONERS SUPPLY CO.
By
Title:
THE CHASE MANHATTAN BANK,
as Agent
By
Title:
[NAME OF ISSUING BANK],
as Issuing Bank
By
Title:
_______________________________
1Supply owns 77 of the 122 issued and outstanding shares. It
owns 55 shares outright and 22 are held in escrow. Theodore J.
Crayne ("Crayne") owns the remaining 45 shares which are issued
and outstanding. The Supply and Crayne have entered into that
certain Stockholders' Agreement dated as of July 1, 1993 (the
"Stockholder's Agreement") to govern the shares. The escrowed
shares will be earned by and delivered to Crayne as certain
performance standards are met. So long as the Delaware General
Corporation Law does not prohibit it from doing so, the
Stockholders' Agreement provides that the Supply shall purchase
from Crayne his stock upon his termination by United Business
Computers, Inc. In addition, Crayne may, at the times and at the
prices determined as set forth in the Stockholders' Agreement,
purchase the Supply's stock in UBC. The Stockholders' Agreement
provides that neither shareholder may pledge the stock.
2 Lagasse property acquired as part of the Lagasse
Acquisition.
3 The Company is considering consolidating the Memphis
and Nashville operations in a new location which may service
both markets.
4 On or about March 16, 1995, Supply was notified of an
action filed by The Illinois State Toll Highway Authority to
condemn approximately 4,336 square feet of land and to obtain a
temporary construction easement for a period of three years
across and upon approximately 24,090 square feet of land
constituting a part of the property.
**** This mortgage secures the Tranche A Term Loans and the
Tranche B Term Loans only.
[5. The facility will be mortgaged post-closing.]
* This Mortgage secures the Tranche A Term Loans and the
Tranche B Term Loans only.
6 Catalogue Receivables shall not constitute Ineligible
Receivables (unless they so constitute for other reasons)
for purposes of determinations made as of the last day of
September, October, November, December, January or February.
7 Calendars shall not be excluded from Eligible Inventory for
purposes of any determination of "Eligible Inventory" made
as of the last day of June, July, August, September,
October, November or December.
8 At any time after February 28 but before November 1, this
percentage shall be 60% (not 65%).
9 Insert this language if Assignee will acquire
Registered Loans hereunder.
Exhibit 99.3
Kathleen S. Dvorak
Director, Investor Relations
or
Daniel H. Bushell
Chief Financial Officer
United Stationers Inc.
(847) 699-5000
FOR IMMEDIATE RELEASE
UNITED STATIONERS COMPLETES
ACQUISITION OF LAGASSE BROS., INC.
Des Plaines, Ill., Nov. 4, 1996 -- United Stationers Inc.
(NASDAQ: USTR) announced today that its subsidiary, United
Stationers Supply Co., has completed the acquisition of all of
the capital stock of Lagasse Bros., Inc., a rapidly growing $80.0
million wholesaler of janitorial and sanitary supplies. Since
1991, sales for Lagasse have grown by 25% each year and operating
income by 26%.
"We recently amended our Senior Credit Agreement and
increased the amount to $540 million. The agreement was amended
to provide the resources necessary to acquire Lagasse Bros., and
provide lower interest rates which reflect the Company's strong
financial performance to date as well as favorable conditions in
the bank market," said Tom Sturgess, chairman of the board,
president and chief executive officer of United Stationers Inc.
"This strategic acquisition makes us the largest wholesaler
of sanitary and maintenance products in the United States. It
broadens our customer base, provides tremendous cross-selling
opportunities between two distinct distribution channels, and
enables us to qualify for higher levels of purchase volume
allowances. Through our combined expertise and resources, we
will be able to quickly extend the geographic reach of Lagasse
Bros.," added Tom Sturgess.
- more -
United Stationers Inc. Completes
Acquisition of Lagasse Bros., Inc.
Page two of two
"Under the leadership of the Lagasse family for the past 50
years, this company has built an enviable record of sales growth,
customer service and profitable operations. Kevin and David
Lagasse have agreed to join our management team and will continue
to operate Lagasse Bros. from their headquarters in New Orleans,"
concluded Sturgess.
Lagasse Bros., founded in 1947, is a privately held company,
headquartered in New Orleans, Louisiana. Lagasse currently
serves more than 5,400 customers from 14 distribution centers and
is the largest wholesaler in this industry segment.
United Stationers Inc. is North America's largest wholesaler
of business products
to resellers. Through its computer-based distribution system, it
makes more than
25,000 items available within 24 hours of order placement through
41 regional distribution centers.
The Company's common stock trades on the Nasdaq National
Market tier of the Nasdaq Stock Market under the symbol: USTR.
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