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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): December 5, 1996
________________________________
DANKA BUSINESS SYSTEMS PLC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
UNITED KINGDOM 33-68278 98-0052869
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
11201 DANKA CIRCLE NORTH
ST. PETERSBURG, FLORIDA 33716
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 813-576-6003
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ITEM 5. OTHER EVENTS.
On December 5, 1996, Danka Business Systems PLC (the "Company")
entered into a Credit Agreement (the "Agreement") with a consortium of banks
for a $1.275 billion multi-currency credit facility providing (i) a revolving
loan facility of $650 million with a letter of credit sublimit of $75 million
and a swing-line facility sublimit of $25 million, (ii) credit extensions in
the form of participation in multi-currency swing-line facilities of up to $75
million and (iii) a term loan of $550 million (the "Credit Facility"). The
Company and its wholly owned subsidiaries Danka Holding Company and Dankalux
Sarl & Co. SCA are co-borrowers under the Agreement. The Credit Facility is
secured by (i) a pledge by certain of the Company's holding companies in
Material Countries of the capital stock of the operating companies in each such
jurisdiction; (ii) guarantees, as permitted under local law, of the Company's
operating companies in the Material Countries; and (iii) a covenant by the
Company that it will not pledge its assets except as specifically permitted
under the terms of the Agreement. The Credit Facility replaces the existing
$400M credit facility of the Company. The Company intends to use the proceeds
provided from the Credit Facility to (i) purchase the Office Imaging business
of Eastman Kodak Company, (ii) repay the existing bank indebtedness of the
Company and (iii) provide working capital for general corporate purposes of the
Company. Borrowings bear interest, at the option of the Company, at either an
"Offshore Rate" (tied to the rate offered in the offshore interbank
eurocurrency market) or a "Base Rate" which consists of the higher of (a), the
NationsBank prime rate or (b) the Federal Funds rate plus 0.5%. The Credit
Facility provides for bid borrowing pursuant to which the borrowers can also
solicit bids from the banks to make loans with interest rates which are more
favorable than those otherwise provided in the Credit Facility. The Agreement
contains covenants relating to the disposition of assets, financial ratios,
capital expenditures, acquisitions, operations, additional indebtedness,
permitted liens and payment of dividends, as well as other customary
affirmative and negative covenants. The Agreement will terminate no later than
December 5, 2002. A copy of the Agreement is filed with this Report as Exhibit
4 and any description or summary thereof set forth in this Report is qualified
in its entirety by reference to the complete terms and conditions of the
Agreement. A copy of the Company's Press Release dated December 11, 1996,
announcing the new credit facility is attached here as Exhibit 99.1.
On December 12, 1996, the Company issued the Press Release attached
hereto as Exhibit 99.2 announcing the approval by the Company's shareholders of
the acquisition of Eastman Kodak Company's Office Imaging business.
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ITEM 7. Financial Statements and Exhibits.
(c) Exhibits.
4 Credit Agreement dated December 5, 1996, by and among Danka
Business Systems PLC, Dankalux Sarl & Co. SCA, Danka Holding
Company, and the several financial institutions from time to
time a party and NationsBank, N.A. as Agent.
99.1 Press Release of the Company dated December 11, 1996
announcing new credit facility
99.2 Press Release of the Company dated December 12, 1996
announcing approval by the Company's shareholders of the
acquisition of Eastman Kodak Company's Office Imaging business
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
DANKA BUSINESS SYSTEMS PLC
By: /S/ DAVID C. SNELL
-----------------------------------
David C. Snell
Its: Chief Operating Officer
Dated: December 16, 1996
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INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
4 Credit Agreement dated December 5, 1996, by and among Danka
Business System PLC, Dankalux Sarl & Co. SCA, Danka Holding
Company, the several financial institutions from time to
time a party and NationsBank, N.A., as Agent.
99.1 Press Release of the Company dated December 11, 1996
announcing new credit facility
99.2 Press Release of the Company dated December 12, 1996
announcing approval by the Company's shareholders of the
acquisition of Eastman Kodak Company's Office Imaging
business
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Exhibit 4
CREDIT AGREEMENT
by and among
DANKA BUSINESS SYSTEMS PLC,
DANKALUX SARL & CO. SCA and
DANKA HOLDING COMPANY,
as Borrowers
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
and
ABN AMRO BANK N.V.,
as International Swing Line Banks
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Documentation Agent
and
THE LENDERS PARTIES THERETO
December 5, 1996
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Other Interpretive Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
1.3 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
1.4 Currency Equivalents Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments; Joint and Several Liability . . . . . . . . . . . . . . . . . . . . . . . 36
2.2 Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.3 Procedure for Syndicated Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
2.4 Conversion and Continuation Elections - Syndicated Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.5 Utilization of Revolving Commitments and Term Loan Commitments in Offshore Currencies . . . . . . . . . . . 43
2.6 Bid Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.7 Procedure for Bid Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.8 Voluntary Termination or Reduction of Revolving Commitments . . . . . . . . . . . . . . . . . . . . . . . . 47
2.9 Optional and Mandatory Prepayments; Mandatory Reductions of Commitments . . . . . . . . . . . . . . . . . . 48
2.10 [reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.11 Currency Exchange Fluctuations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.12 Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.13 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
2.14 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.15 Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
2.16 Payments by the Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
2.17 Payments by the Banks to the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
2.18 Sharing of Payments Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.19 Swing Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2.20 International Swing Line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
2.21 Issuance of FIPs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
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ARTICLE III
THE LETTERS OF CREDIT
3.1 The Letter of Credit Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.2 Issuance, Amendment and Renewal of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.3 Risk Participations, Drawings and Reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
3.4 Repayment of Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
3.5 Role of the Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
3.6 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
3.7 Cash Collateral Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
3.8 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
3.9 Uniform Customs and Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.2 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
4.3 Increased Costs and Reduction of Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
4.4 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
4.5 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
4.6 Replacement Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.7 Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.8 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Execution of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.2 Conditions of Initial Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.3 Conditions to All Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
5.4 Supplements to Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
5.5 Conditions of Initial Swing Line Extensions of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
6.2 Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
6.3 Governmental Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
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6.4 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
6.5 Litigation: Labor Controversies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.6 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.7 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.8 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.10 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.11 Support Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.12 Copyrights, Patents, Trademarks and Licenses, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.13 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.15 ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.17 Regulated Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.18 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.19 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.20 Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
6.21 Certain Agreements Paid in Full . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.22 Existing Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1 Financial Information, Reports, Notices, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
7.2 Compliance with Laws, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.4 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.5 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.6 Maintenance of Existence, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.7 Intercompany Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.8 Additional Support Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.9 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.10 Release of Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
7.11 Swap Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
ARTICLE VIII
NEGATIVE COVENANTS
8.1 Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
8.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
8.3 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.4 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
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8.5 Restricted Payments, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.6 Convertible Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.7 Consolidation Merger, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.8 Asset Dispositions, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
8.9 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8.10 Negative Pledges, Restrictive Agreements, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8.11 Subsidiaries' Voting Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8.13 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8.14 Ownership of Operating Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
8.15 Change Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
9.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
9.3 Rights Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
ARTICLE X
THE AGENT
10.1 Appointment and Authorization; "Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
10.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
10.3 Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
10.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
10.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
10.6 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
10.7 Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
10.8 Agent in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
10.9 Successor Agent and Successor Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
10.10 U.S. Withholding Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
10.11 United Kingdom Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
ARTICLE XI
MISCELLANEOUS
11.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
11.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
11.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
11.4 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
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11.5 Company Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
11.6 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
11.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
11.8 Assignments, Participations, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
11.9 Designated Bidders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
11.10 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
11.11 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
11.12 Notification of Addresses of Lending Offices, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
11.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
11.15 No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
11.16 Governing Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
11.17 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
11.18 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
11.19 Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
EXHIBIT A FORM OF BID LOAN NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Danka Business Systems PLC Danka Holding Company Dankalux Sarl & Co. SCA COMPLIANCE CERTIFICATE . . B-1
EXHIBIT C DESIGNATION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D INVITATION FOR COMPETITIVE BID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E IRREVOCABLE NOTICE OF SYNDICATED ACTIVITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
EXHIBIT F FORM OF REVOLVING LOAN NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
EXHIBIT G SUBORDINATION AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
EXHIBIT H FORM OF TERM LOAN NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-1
EXHIBIT I COMPETITIVE BID REQUEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
EXHIBIT J COMPETITIVE BID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J-1
EXHIBIT K FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-1
EXHIBIT L FORM OF SWING LINE BORROWING NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L-1
EXHIBIT M FORM OF SWING LINE NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M-1
SCHEDULE I PRICING GRID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-1
SCHEDULE II EXCLUDED COUNTRY SUBSIDIARIES AND INACTIVE SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . SCH-2
SCHEDULE III INCLUDED COUNTRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-3
SCHEDULE IV PLEDGORS AND PLEDGED INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-4
SCHEDULE V REQUIRED PRINCIPAL INSTALLMENT AMOUNTS AND PAYMENT DATES OF TERM LOAN . . . . . . . . . . . . . . SCH-5
SCHEDULE VI [RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-6
SCHEDULE VII INTERNATIONAL SWING LINE BORROWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-7
SCHEDULE VIII RESTRICTED SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-8
</TABLE>
vi
<PAGE> 7
<TABLE>
<S> <C> <C>
SCHEDULE 2.1 COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-9
SCHEDULE 6.5 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-10
SCHEDULE 6.10 ADDITIONAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-11
SCHEDULE 6.12 LITIGATION REGARDING PATENTS, TRADEMARKS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . SCH-12
SCHEDULE 6.13 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-13
SCHEDULE 6.16 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-14
SCHEDULE 8.2(a)(vi) EXISTING LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-15
SCHEDULE 8.4(a) EXISTING INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-16
SCHEDULE 8.10 RESTRICTIVE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-17
SCHEDULE 8.13 EXISTING INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-18
SCHEDULE 10.11(a) FORM OF U.K. WITHHOLDING EXEMPTION CLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-19
SCHEDULE 10.11(d) FORM OF U.K. TAX REFUND CLAIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SCH-20
SCHEDULE 11.2 OFFSHORE AND DOMESTIC LENDING OFFICES ADDRESSES FOR NOTICE . . . . . . . . . . . . . . . . . . . SCH-21
</TABLE>
vii
<PAGE> 8
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of December 5, 1996, among
DANKA BUSINESS SYSTEMS PLC, a public liability company incorporated in England
and Wales (Registered Number 1101386) ("Danka PLC"), DANKALUX SARL & CO. SCA, a
Luxembourg company ("Dankalux"), with respect to which Dankalux Sarl, a limited
liability company incorporated in Luxembourg ("Dankalux Sarl"), is the sole
commandite, DANKA HOLDING COMPANY, a Nevada corporation ("Danka Holding"; Danka
PLC, Dankalux and Danka Holding are herein each a "Company" and collectively
the "Companies"), the several financial institutions from time to time party to
this Agreement (collectively, the "Banks"; individually, a "Bank"), and
NationsBank, N.A., as agent for the Banks (in such capacity, the "Agent").
WHEREAS, Danka PLC has entered into one or more Asset Purchase
Agreements containing in all material respects the terms of that certain Asset
Purchase Agreement dated September 6, 1996 with Kodak (as herein defined) (such
agreements, as in effect as of the date hereof and as may be hereafter amended
or supplemented with, if such amendments or supplements shall (either
individually or collectively) alter the terms of the transactions contemplated
thereby in a manner materially adverse to Danka PLC and its Subsidiaries taken
as a whole, the consent of the Agent and the Banks, collectively referred to as
the "Asset Purchase Agreement") pursuant to which Danka PLC has agreed to
purchase or cause certain of its Subsidiaries to purchase certain assets and
liabilities of Kodak, including (i) the office imaging business of Kodak, (ii)
the customer service business of Kodak and (iii) the issued and outstanding
stock of Kodak's subsidiary, Kodak Imaging Services, Inc. and its subsidiaries
(collectively, the "Acquired Business"); and
WHEREAS, Danka PLC and Danka Holding are currently indebted to certain
banks under an Existing Credit Agreement (as herein defined), which provides
for revolving loans of up to $400,000,000 with a letter of credit sublimit of
up to $50,000,000 (the "Existing Bank Facility") which loans are evidenced by
promissory notes of Danka PLC and Danka Holding (the "Existing Notes"); and
WHEREAS, the Companies have requested that the Banks make available to
them (i) a revolving loan facility of $650,000,000 with a letter of credit
sublimit of $75,000,000 and a swing line facility sublimit of $25,000,000, (ii)
credit extensions in the form of participations in multicurrency swing line
facilities in an aggregate Dollar Equivalent Amount not to exceed $75,000,000,
and (iii) a term loan of $550,000,000, the proceeds of the facilities to be
used to (x) fund the acquisition of the Acquired Business, (y) repay the
Existing Bank Facility and (z) provide working capital and for general
corporate purposes of the Companies and certain Subsidiaries; and
WHEREAS, the Banks have agreed to make available to the Companies, to
the extent provided herein, a multicurrency revolving credit and term
loan/letter of credit facility upon the terms and conditions set forth in this
Agreement;
<PAGE> 9
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
2
<PAGE> 10
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms have the following
meanings:
"Absolute Rate" has the meaning specified in Section 2.7(c).
"Acquired Business" has the meaning specified in the
introductory clause hereto.
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the
acquisition of in excess of 50% of the capital stock, partnership
interests, membership interests or equity of any Person, or otherwise
causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than
a Person that is a Subsidiary immediately prior to giving effect to
such combination) provided that the applicable Company or a Subsidiary
is the surviving entity.
"Adjusted Consolidated Net Worth" means the consolidated net
worth of Danka PLC and its Subsidiaries, minus Investments made by
Danka PLC and its Subsidiaries after the Effective Date in Excluded
Country Subsidiaries.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"Agent" means NationsBank in its capacity as agent for the
Banks hereunder, and any successor agent arising under Section 10.9.
"Agent-Related Persons" means the Agent and any successor
agent arising under Section 10.9, together with their respective
Affiliates (including in the case of NationsBank, the Arranger), and
the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates.
"Agent's Payment Office" means (i) in respect of payments in
Dollars, the address for payments set forth on Schedule 11.2 or such
other address as the Agent may from time to time specify in accordance
with Section 11.2 , and (ii) in the case of payments in any
Offshore Currency, such address as the Agent may from time to time
specify in accordance with Section 11.2.
3
<PAGE> 11
"Agreed Alternate Currency" has the meaning specified in
Section 2.5(b).
"Agreement" means this Credit Agreement.
"Alberta Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Alberta.
"Applicable Currency" means, as to any particular payment or
loan, Dollars or the Offshore Currency in which it is denominated or
is payable.
"Applicable Fee Percentage" means, at any time, the rate set
forth on Schedule I under the column "Commitment Fee" for the level
applicable at such time in accordance with the provisions of Section
2.15(d).
"Applicable Margin" means
(i) with respect to Base Rate Loans, 0%;
(ii) with respect to Offshore Rate Loans, at any
time, the rate set forth on Schedule I under the column
"Applicable Margin" for the level applicable at such time in
accordance with the provisions of Section 2.15(d).
"Arranger" means NationsBanc Capital Markets, Inc. and its
successors.
"Asset Purchase Agreement" has the meaning set forth in the
introductory clause hereto.
"Assignee" has the meaning specified in subsection 11.8(a).
"Associated Costs" means a rate per annum equal to the
arithmetic mean of the percentage rates applicable to the Offshore
Currency Lending Office of the relevant Bank according to the
following formula:
Associated Costs BY + L(Y-X) + S(Y-Z)
--------------------
per annum = 100 - (B+S)
where:
B = The percentage of such Bank's eligible liabilities
required, on the first day of the Relevant Period,
to be held in a non-interest-bearing deposit
account with the Bank of England pursuant to the
cash ratio requirements of the Bank of England.
4
<PAGE> 12
Y = The interest rate at which Sterling deposits in an
amount comparable to the aggregate principal amount
of the relevant Loan are offered by such Bank to
leading banks in the London interbank market at or
about 11:00 a.m. (London time) on the first day of
the Relevant Period for a period comparable to the
Relevant Period.
L = The average percentage of eligible liabilities
which the Bank of England, as at the first day of
the Relevant Period, requires such Bank to maintain
as secured money with members of the London
Discount Market Association and/or as secured call
money with those money brokers and gilt-edged
primary market makers recognized by the Bank of
England.
X = The rate at which secured Sterling deposits in an
amount comparable to the aggregate principal amount
of the relevant Loan may be placed by such Bank
with members of the London Discount Market
Association and/or as secured call money with money
brokers and gilt-edged primary market makers at or
about 11:00 a.m. (London time) on the first day of
the Relevant Period for a period comparable to the
Relevant Period.
S = The percentage of such Bank's eligible liabilities
required on the first day of the relevant Interest
Period to be placed as a special deposit with the
Bank of England.
Z = The percentage interest rate per annum payable by
the Bank of England on special deposits or, if
lower, Y.
(a) For the purposes of this definition:
(i) "eligible liabilities" and "special deposits"
shall have the meanings ascribed to them from time to time by
the Bank of England; and
(ii) "Relevant Period" means, if the Interest
Period with respect to the relevant Loan is three
months or less, the duration of such Interest Period or, if
such Interest Period is longer than three months, each period
of three months and any necessary shorter period in such
Interest Period.
(b) In the application of the above formula, B, Y, L,
X, S and Z will be included in the formula as decimal fractions and
not as percentages, e.g. if B = 0.5% and Y = 15%, BY will be
calculated as 0.5 x 15 and not as 0.5% x 15%.
(c) Associated Costs shall be computed by the
applicable Bank on the first day of each Relevant Period, and shall,
if necessary, be rounded upward to the nearest 1/10,000 of 1%. If
there is more than one Relevant Period comprised in the relevant
Interest Period, then the Associated Costs for that Interest Period
shall be the weighted
5
<PAGE> 13
average of the amounts so computed for the Relevant Periods comprised
in that Interest Period.
(d) Calculations will be made on the basis of a year of
365 days.
The "Associated Costs" shall be increased by an amount which
the applicable Bank shall determine from time to time to be necessary
to compensate such Bank for the cost or loss to it of complying with
any liquidity, monetary control or prudential requirements of The Bank
of England existing from time to time.
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel.
"Australian Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Australia.
"Bank" has the meaning specified in the introductory clause
hereto.
"Base Rate" means, for any day, the higher of (a) 0.50% per
annum above the latest Federal Funds Rate, or (b) the rate of interest
in effect for such day as publicly announced from time to time by
NationsBank in Charlotte, North Carolina, as its "prime rate." (The
"prime rate" is a rate set by NationsBank based upon various factors
including NationsBank's costs and desired return, general economic
conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such
announced rate.) Any change in the prime rate announced by
NationsBank shall take effect at the opening of business on the day
specified in the public announcement of such change.
"Base Rate Loan" means a Revolving Loan, Swing Line Loan, Term
Loan or L/C Advance that bears interest based on the Base Rate.
"Belgian Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Belgium.
"Bid Agent" initially means the Companies and five Business
Days after the Companies have requested the Agent to assume the duties
of Bid Agent means the Agent. Thereafter, the Bid Agent may be changed
back to the Companies or the Agent upon five Business Days notice from
the Companies; provided, however, that the Bid Agent cannot be changed
more than once in any twelve month period.
"Bid Borrowing" means a Borrowing hereunder consisting of one
or more Bid Loans made to the Companies on the same day by one or more
Banks or Designated Bidders.
6
<PAGE> 14
"Bid Loan" means a Revolving Loan by a Bank or a Designated
Bidder to the Companies under Section 2.6.
"Bid Loan Bank" means, in respect of any Bid Loan, the Bank or
a Designated Bidder making such Bid Loan to the Companies.
"Bid Loan Note" means a note substantially in the form of
Exhibit A and delivered to a Bank pursuant to Section 2.2.
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrowing" means a borrowing hereunder consisting of (i) Bid
Loans or Revolving Loans of the same Type and in the same Applicable
Currency made to a Company on the same day by the Banks under Section
2.1(a) or (in the case of Bid Borrowings) Bid Loan Banks under
Sections 2.6 and 2.7, and, in the case of Offshore Rate Loans, having
the same Interest Period, (ii) Swing Line Loans under Section 2.19,
(iii) International Swing Line Loans under Section 2.20, and (iv) Term
Loans of the same Type and in the same Applicable Currency made to a
Company on the same day by the Banks under Section 2.1(b) and, in the
case of Offshore Rate Loans, having the same Interest Period. A
Borrowing may be a Revolving Borrowing or a Swing Line Borrowing or a
Bid Borrowing or a Term Borrowing.
"Borrowing Date" means any date on which a Borrowing occurs
under Section 2.3, Section 2.7, Section 2.19 or Section 2.20.
"Brazilian Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Brazil.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City or Charlotte,
North Carolina are authorized or required by law to close and (i) with
respect to disbursements and payments in Dollars, a day on which
dealings are carried on in the applicable offshore Dollar interbank
market, and (ii) with respect to any disbursements and payments in and
calculations pertaining to any Offshore Currency Loan, a day on which
commercial banks are open for foreign exchange business in London,
England, and on which dealings in the relevant Offshore Currency are
carried on in the applicable offshore foreign exchange interbank
market in which disbursement of or payment in such Offshore Currency
will be made or received hereunder.
"Canadian Federal Guarantor" means a Subsidiary as listed
under the heading "Guarantors" in Schedule IV that was organized under
the federal laws of Canada.
7
<PAGE> 15
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any bank or of any
corporation controlling a bank.
"Capital Expenditures" means, for any period, the sum of the
aggregate amount of all expenditures of Danka PLC and its Subsidiaries
for fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital expenditures;
provided, however, that in the calculation of Capital Expenditures for
any period, there shall be excluded from such expenditures (i) any
amounts spent for assets that later in such period were sold for an
equal or greater amount, such excluded amount not to exceed $5,000,000
per period, and (ii) expenditures for fixed or capital assets not to
exceed $30,000,000 made in connection with the acquisition of the
Acquired Business.
"Cash Collateralize" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuing Bank
and the Banks, as collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in form and substance
reasonably satisfactory to the Agent and the Issuing Bank.
Derivatives of such term shall have corresponding meanings. The
Company hereby grants the Agent, for the benefit of the Agent, the
Issuing Bank and the Banks, a security interest in all such cash and
deposit account balances. Cash collateral shall be maintained in
blocked, interest bearing deposit accounts at NationsBank.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more
than one year after such time, issued or guaranteed by the government
of a country ("OECD Country") which is a member of the Organization
for Economic Cooperation and Development or any agency thereof;
(b) commercial paper, maturing not more than nine
months from the date of issue, which is issued by
(i) a corporation (other than an Affiliate of the
Companies) organized under the laws of any state of the United
States or of the District of Columbia and rated A-2, or
better, by Standard & Poor's Ratings Services or P-2, or
better, by Moody's Investors Service, Inc., or
(ii) any Bank (or its holding company);
(c) any certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued by
either
8
<PAGE> 16
(i) a commercial banking institution that is a
member of the Federal Reserve System or an applicable central
bank of an OECD Country and has a combined capital and surplus
and undivided profits of not less than $500,000,000, or
(ii) any Bank; or
(d) any repurchase agreement entered into with any Bank
(or other commercial banking institution of the stature referred to in
clause (c)(i)) which
(i) is secured by a fully perfected security
interest in any obligation of the type described in any of
clauses (a) through (c); and
(ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such Bank (or other commercial
banking institution) thereunder.
"Change in Control" means (a) the acquisition by any Person,
or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Exchange Act) of 30% or more of the outstanding
shares of voting stock of Danka PLC, or (b) Danka PLC shall cease to
own indirectly at least 80% of the outstanding shares of voting stock
of any of Danka Holding, Danka BV or Dankalux Sarl or of all
equity interests in Dankalux, or (c) Dankalux Sarl shall cease to be
the sole commandite with respect to Dankalux, or (d) Danka Holdings
Sarl shall cease to own 100% of all equity interests in Dankalux Sarl.
"Closing Date" means the date on which this Agreement and the
Notes are executed and delivered to the Bank.
"Code" means the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder.
"Commitment", as to each Bank, means the sum of such Bank's
Revolving Commitment and Term Loan Commitment.
"Company" has the meaning specified in the introductory clause
hereto.
"Competitive Bid" means an offer by a Bank or a Designated
Bidder to make a Bid Loan in accordance with Section 2.7(c).
"Competitive Bid Request" has the meaning specified in Section
2.7(a).
"Compliance Certificate" means a certificate substantially in
the form of Exhibit B.
9
<PAGE> 17
"Consolidated EBITDA" means with respect to Danka PLC and its
Subsidiaries, on a consolidated basis, for any period of four
consecutive fiscal quarters, income from continuing operations for
such period before income taxes for such period plus interest expense
(including amounts attributable to interest under any Permitted
Receivables Securitization) for such period, plus depreciation expense
for such period, plus amortization expense for such period, plus (for
the fiscal quarter ended March 31, 1996) early debt retirement costs
taken in the fiscal quarter ended March 31, 1996 in an amount not in
excess of $2,000,000, plus (for the fiscal quarter ending December 31,
1996) restructuring charges arising in connection with the acquisition
of the Acquired Business in an amount not in excess of $35,000,000,
plus early debt retirement costs taken in the fiscal quarter in which
the acquisition of the Acquired Business is consummated in an amount
not in excess of $2,000,000; provided that with respect to any
Pre-Acquisition Period, the foregoing computations shall be made by
combining (without duplication) the computations for Danka PLC and its
Subsidiaries with comparable historical adjusted pro-forma
computations for the Acquired Business with respect to such
Pre-Acquisition Period, which historical adjusted pro-forma
computations shall be prepared using the same accounting methodology
used in preparing the historical adjusted pro-forma financial
statements for the "Office Imaging Sales and Service Business"
contained in the Proxy Statement.
"Consolidated Fixed Charge Coverage Ratio" means with respect
to Danka PLC and its Subsidiaries, on a consolidated basis, for any
period of four consecutive fiscal quarters, the ratio of
(i) the amount of
(A) Consolidated EBITDA for such period, minus
(B) the sum of (1) gains for such period on the
sale of assets outside the ordinary course of business
(excluding gains on the sale of assets previously on operating
leases) plus (2) Capital Expenditures allocable to such
period; provided that with respect to any Pre-Acquisition
Period, the foregoing computations in this clause (B) shall be
made by combining (without duplication) the computations for
Danka PLC and its Subsidiaries with comparable historical
adjusted pro-forma computations for the Acquired Business with
respect to such Pre-Acquisition Period, which historical
adjusted pro-forma computations shall be prepared using the
same accounting methodology used in preparing the historical
adjusted pro-forma financial statements for the "Office
Imaging Sales and Service Business" contained in the Proxy
Statement
to
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<PAGE> 18
(ii) the sum of
(A) interest expense (including amounts
attributable to interest under any Permitted
Receivables Securitization) for such period
(provided that for any period of computation
that includes any period of time prior to the
Effective Date, interest expense for purposes
of this definition only shall be determined
by (x) excluding interest paid, accrued or
amortized in respect of the Existing Bank
Facility, and (y) substituting therefor
actual interest expense on all Credit
Extensions between the Effective Date and the
end of such period of computation and
annualizing such amount for the entire
period of computation), plus
(B) dividends for such period, plus
(C) the current portion of long-term debt as at
the end of such period.
"Consolidated Total Leverage Ratio" means, with respect to
Danka PLC and its Subsidiaries, on a consolidated basis, for any
period, the ratio of Total Indebtedness as at the end of such period
to Consolidated EBITDA for such period.
"Contingent Obligation" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise
becomes or is contingently liable upon (by direct or indirect
agreement to provide funds for payment, to supply funds to, or
otherwise to invest in, a debtor, or otherwise to assure a creditor
against loss) the Indebtedness of any other Person (other than by
endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the
shares of any other Person. The amount of any Person's obligation
under any Contingent Obligation shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness guaranteed
thereby.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or
by which it or any of its property is bound.
"Conversion/Continuation Date" means any date on which, under
Section 2.4, a Company (a) converts Syndicated Loans of one Type to
another Type, or (b) continues as Syndicated Loans of the same Type,
but with a new Interest Period, Syndicated Loans having Interest
Periods expiring on such date.
"Convertible Subordinated Notes" means the $200,000,000 6.75%
Convertible Subordinated Notes due 2002 of Danka PLC.
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<PAGE> 19
"Credit Extension" means and includes (a) the making of any
Syndicated Loans and Bid Loans and Swing Line Loans hereunder, and (b)
the Issuance of any Letters of Credit hereunder.
"Currency Hedge Utilization" means, as at any date, the
aggregate amount of the Revolving Commitments reserved as at such date
pursuant to Section 2.11.
"Danish Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Denmark.
"Danka BV" means Danka Group BV, a Netherlands company.
"Danka Holding" has the meaning specified in the introductory
clause hereto.
"Danka Holdings BV" means Danka Holdings BV, a Netherlands
company.
"Danka PLC" has the meaning specified in the introductory
clause hereto.
"Dankalux" has the meaning specified in the introductory
clause hereto.
"Dankalux Sarl" has the meaning specified in the introductory
clause hereto.
"Dankalux Luxembourg Sarl" means Danka Luxembourg Sarl, a
Luxembourg company.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"Designated Bidder" means an Affiliate of a Bank that is an
entity described in clause (a) or (b) of the definition of "Eligible
Assignee" and that has become a party hereto pursuant to Section 11.9.
"Designation Agreement" means an agreement in substantially
the form of Exhibit C.
"DFC" means Danka Funding Company LLC, a limited liability
company organized in New York or any other special purpose subsidiary
of Danka PLC organized for the purpose of purchasing receivables
relating to the sale or lease of Equipment on a nonrecourse or limited
recourse basis.
"Dollars", "dollars" and "$" each mean lawful money of the
United States.
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<PAGE> 20
"Dollar Equivalent Amount" means (a) the amount denominated in
Dollars, and (b) as to any amount denominated in an Offshore Currency,
the equivalent amount in Dollars as determined by the Agent on the
basis of the Spot Rate for the purchase of Dollars with such Offshore
Currency.
"Effective Amount" means, with respect to any outstanding L/C
Obligations on any date, (i) the amount of such L/C Obligations; and
(ii) the amount of any undrawn commercial Letters of Credit which have
expired less than 25 days prior to such date.
"Effective Date" means the date designated by a Company
pursuant to an Irrevocable Notice of Syndicated Activity that has been
received by the Agent pursuant to Section 5.3 and on which date all
conditions precedent set forth in Section 5.2 are satisfied.
"Eligible Assignee" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having
a combined capital and surplus of at least $100,000,000; (b) a
commercial bank organized under the laws of any other country which is
a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located
in the country in which it is organized or another country which is
also a member of the OECD; and (c) a Person that is primarily engaged
in the business of commercial banking and that is (i) a Subsidiary of
a Bank, (ii) a Subsidiary of a Person of which a Bank is a Subsidiary,
or (iii) a Person of which a Bank is a Subsidiary.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"Equipment" means all equipment of whatever kind or nature now
owned or hereafter acquired by a Person, including, without
limitation, all machinery, vehicles, tools, furniture, furnishings,
office machines and equipment, material handling equipment, forklifts,
conveyors, machine systems, computers and all other goods used with
all accessories, parts and additions noted or hereafter affixed
thereto or used in connection therewith.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and regulations promulgated thereunder.
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<PAGE> 21
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by any Company or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan
year in which it was a substantial employer (as defined in Section
4001 (a) (2) of ERISA) or a cessation of operations which is treated
as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by any Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA, other
than PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon any Company or any ERISA Affiliate.
"Eurocurrency Reserve Percentage" has the meaning specified in
the definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances
specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and regulations promulgated thereunder.
"Excluded Country Subsidiary" means any Subsidiary of Danka
PLC which has not executed and delivered to the Agent a Guaranty,
which Subsidiary is organized under the laws of a country which is not
an Included Country, all of which Excluded Country Subsidiaries as of
the Closing Date are listed on Schedule II.
"Existing Credit Agreement" means the Credit Agreement dated
as of March 19, 1996 among Danka PLC, as Borrower, Danka Holding, as
Co-Borrower, Bank of America National Trust and Savings Association,
as Agent, NationsBank, N.A. (South), as Co-Agent, and certain other
financial institutions.
"Existing Letter of Credit" means Letter of Credit No. 300149
issued by BofA for the benefit of RICOH Europe BV in the maximum
stated amount of 15,000,000 Dutch guilders, having an expiry date of
October 1, 1997.
"Existing Notes" has the meaning specified in the introductory
clause hereto.
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<PAGE> 22
"FDIC" means the Federal Deposit Insurance Corporation and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.l5(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"Fee Letters" has the meaning specified in Section 2.14(a).
"FIP" and "FIPs" mean any one or more than one Foreign Income
Preference Shares which may be issued from time to time by Danka PLC
or an Affiliate of Danka PLC in accordance with the terms of Section
2.21, the FIP Holder Payments with respect to which may be supported
by a FIP L/C. A "Foreign Income Preference Share" is a security of
Danka PLC or such Affiliate denominated in British pounds sterling
which is at all times treated as Indebtedness of Danka PLC or such
Affiliate for accounting purposes and (x) the dividend which is
payable in respect thereof is not subject to payment of United Kingdom
income tax when received by the holder thereof or (y) has other
economic characteristics the net after tax result of which is that the
cost of funds thereunder is more favorable to Danka PLC and its
Subsidiaries than that payable under this Agreement.
"FIP Holder Payments" means, with respect to any FIP, payment
obligations of the issuer of such FIP to the holder or registered
owner thereof in respect of the redemption or purchase price thereof,
premium thereon or interest or dividends payable with respect thereto.
"FIP L/C" and "FIP L/Cs" mean any or more than one standby
letter of credit issued by the Issuing Bank pursuant to Section 3.1(b)
and reasonably acceptable as to form, amount and terms to the Issuing
Bank and the Agent, which supports payment of all or a portion of FIP
Holder Payments arising under a FIP.
"FIP L/C Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all FIP L/Cs then outstanding, plus (b)
the amount of all unreimbursed drawings under FIP L/Cs, including an
L/C Borrowing with respect to a FIP L/C.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
15
<PAGE> 23
"French Guarantor" means a Subsidiary as listed in Schedule
III that was organized in France.
"Further Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings
or similar charges (including, without limitation, net income taxes
and franchise taxes), and all liabilities with respect thereto,
imposed by any jurisdiction on account of amounts payable or paid
pursuant to Section 4.1.
"FX Trading Office" means the NationsBank Foreign Exchange
Trading Desk in Charlotte, North Carolina, or such other office or
source of information as the Agent may designate with the concurrence
of the Companies.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances, subject to the
provisions of Section 1.3.
"German Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Germany.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Governmental Impairment" has the meaning specified in
Section 7.8.
"Guarantor" means, collectively (i) Danka Holdings Sarl, Danka
Holdings BV and Danka BV, (ii) every Included Country Holding Company
(other than Dankalux Sarl and Restricted Subsidiaries) and (iii) every
Included Country Operating Company other than Restricted Subsidiaries,
whether existing as of the Closing Date or thereafter created or
acquired, including every Subsidiary listed under the heading
"Guarantors" in Schedule IV .
"Guaranty" means a Guaranty in the form reasonably acceptable
to the Agent and the Banks executed by every Guarantor, as the same
may be amended or otherwise modified from time to time.
"Honor Date" has the meaning specified in Section 3.3(b).
"IBOR" has the meaning specified in the definition of
"Offshore Rate".
16
<PAGE> 24
"Impermissible Qualification" means, relative to the opinion
or certification of any independent public accountant or, if
applicable, any chartered accountants as to any financial statement of
any Company or any Subsidiary, any qualification or exception to such
opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination
of matters relevant to such financial statement; or
(c) which relates to the treatment or classification of
any item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause any Company to be in default of any of its
obligations under Section 8.3.
"Inactive Subsidiary" means a Subsidiary organized in an
Included Country that conducts substantially no operations and has no
material assets, all of which Inactive Subsidiaries as of the Closing
Date are listed on Schedule II.
"Included Country" means (i) any country within which Danka
PLC is doing business through one or more Subsidiaries operating in
such country and either the combined assets of such Subsidiaries or
the revenues of such Subsidiaries for any fiscal year of Danka PLC
equals or exceeds three percent (3%) of total combined assets or total
revenues of Danka PLC and its Subsidiaries on a consolidated basis,
and (ii) any additional country selected by the Companies as an
Included Country pursuant to Section 7.8. The Included Countries as
at the Closing Date are listed on Schedule III.
"Included Country Holding Company" means, with respect to any
Included Country, a Subsidiary of Danka PLC substantially all of the
assets of which consist of all of the equity interests (other than
directors' qualifying shares and shares (which are pledged to the
Agent under the Pledge Agreements) held by other Subsidiaries to
satisfy the required number of shareholders in relevant jurisdictions)
of Included Country Operating Companies.
"Included Country Operating Companies" means, with respect to
each Included Country, all Subsidiaries (other than Inactive
Subsidiaries) operating in such Included Country, excluding Included
Country Holding Companies.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money
and all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments and including in all events FIPs;
17
<PAGE> 25
(b) all obligations, contingent or otherwise, relative
to the face amount of all letters of credit (other than letters of
credit supporting trade payables in the ordinary course of business),
whether or not drawn, and banker's acceptances issued for the account
of such Person (it being understood that, to the extent an undrawn
letter of credit supports another obligation consisting of
Indebtedness, in calculating aggregate Indebtedness only such other
obligation shall be included);
(c) all obligations of such Person as lessee under
leases which have been or should be, in accordance with GAAP, recorded
as capitalized lease liabilities;
(d) net liabilities of such Person under all Swap
Contracts;
(e) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services (other than
obligations under employment contracts, restrictive covenants or
similar arrangements or trade payables in the ordinary course of
business), and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements) whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;
(f) liabilities in accordance with GAAP of such Person
with respect to lease paper sold by such Person or any other Persons;
(g) all Contingent Obligations of such Person in
respect of any of the foregoing whether such Person or another Person
is the principal obligor in respect thereof;
(h) all amounts outstanding under Permitted Receivables
Securitizations; and
(i) the aggregate amount of liabilities (including
obligations to purchase or repurchase or other Contingent Obligations)
arising under tax retention operating leases.
"Indemnified Liabilities" has the meaning specified in Section
11.5.
"Indemnified Person" has the meaning specified in Section 11.5.
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
competent court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, administrative receivership, administration, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors
18
<PAGE> 26
generally or any substantial portion of its creditors; undertaken
under U.S. Federal, State or foreign law.
"Interest Payment Date" means, as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to
such Loan and, as to any Base Rate Loan, the last Business Day of each
calendar quarter and each date such Loan is converted into another
Type of Loan; provided, however, that if any Interest Period for an
Offshore Rate Loan or Bid Loan exceeds three months, the dates that
fall at three month intervals after the beginning, and prior to the
end, of such Interest Period are also Interest Payment Dates.
"Interest Period" means, (a) as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which such Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by a Company in its
Irrevocable Notice of Syndicated Activity (or such other period of
time, not to exceed 12 months, as the Agent shall, following
reasonable prior notice from a Company, with the consent of the Banks,
elect to make available); and (b) as to any Bid Loan, a period of not
less than seven days and not more than 365 days as selected by the
Company in the applicable Competitive Bid Request; provided that:
(i) if any Interest Period would otherwise end on
a day that is not a Business Day, that Interest Period shall
be extended to the following Business Day unless, in the case
of an Offshore Rate Loan, the result of such extension would
be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the preceding
Business Day;
(ii) any Interest Period pertaining to an Offshore
Rate Loan that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period;
(iii) each Interest Period for any Term Loan shall
end on the last Business Day of a calendar month; and
(iv) no Interest Period for any Loan shall extend
beyond the date stated in clause (a) of the definition of
"Termination Date".
"International Swing Line Advance" means, as to each Bank, the
aggregate amount of all International Swing Line Loans made (net of
International Swing Line Participations therein), or International
Swing Line Participations of, such Bank.
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<PAGE> 27
"International Swing Line Agreements" means, collectively, the
agreements among one or more of the International Swing Line Banks and
the Companies in form and content acceptable to the Agent and the
Banks, as the same may be amended from time to time in accordance with
Section 11.1, so long as such amendment does not contain terms and
conditions adverse to the Banks or the Agent.
"International Swing Line Banks" means Bank of America
National Trust and Savings Association and ABN AMRO Bank N.V., or any
Affiliate of either thereof and their successors.
"International Swing Line Borrowers" means, as at the
Effective Date, the Subsidiaries listed on Schedule VII, and
thereafter, such other Subsidiaries as shall be acceptable to the
International Swing Line Banks.
"International Swing Line Commitment" means, as to each Bank,
its commitment to make, or purchase a participation in, International
Swing Line Loans (giving effect to all obligations of Banks to
purchase International Swing Line Participations) in a maximum
principal amount not to exceed at any time the amount for such Bank
set forth on Schedule 2.1 under the heading "International Swing Line
Commitment".
"International Swing Line Facility" means, collectively, the
credit facilities provided by the International Swing Line Banks to
the International Swing Line Borrowers pursuant to and as more
particularly described in the International Swing Line Agreements,
which shall not at any time exceed a Dollar Equivalent Amount of
$75,000,000.
"International Swing Line Loans" means loans or extensions of
credit made by either of the International Swing Line Banks to one or
more of the International Swing Line Borrowers pursuant to the
International Swing Line Agreements.
"International Swing Line Obligations" means all advances,
debts, liabilities, obligations, covenants and duties under or
pursuant to any International Swing Line Agreement or any document
evidencing or relating to an International Swing Line Loan, owing by
any International Swing Line Borrower to either International Swing
Line Bank or to any Bank, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising.
"International Swing Line Outstandings" means, as of any date
of determination, the aggregate principal amount all International
Swing Line Loans then outstanding.
"International Swing Line Participation" means, with respect
to any Bank (other than the applicable International Swing Line Bank)
and an International Swing Line Loan, the extension of credit
represented by the participation of such Bank as part of its
International Swing Line Commitment in the liability owed to the
applicable International Swing Line Bank in respect of such
International Swing Line Loan.
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<PAGE> 28
"Inventory" means all inventory of whatever kind or nature of
a Person and wherever located, including, without limitation, all
goods held for sale or lease or furnished or to be furnished under
contracts, and any raw materials, work in process or finished goods,
and all goods and materials used or consumed in such Person's
business, including, without limitation, those goods identified as
equipment on operating leases, machine inventory and parts and
supplies inventory.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any
other Person (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business);
(b) any Contingent Obligation of such Person; and
(c) any ownership or similar interest held by such
Person in any other Person.
The amount of any Investment shall be the original principal or
capital amount thereof less all returns of principal or equity thereon
(and without adjustment by reason of the financial condition of such
other Person) and shall, if made by the transfer or exchange of
property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair market value of such
property.
"Invitation for Competitive Bids" means a solicitation for
Competitive Bids, substantially in the form of Exhibit D.
"Irrevocable Notice of Syndicated Activity" means a notice in
substantially the form of Exhibit E.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Issuance Date" has the meaning specified in Section 3.1(a).
"Issue" means, with respect to any Letter of Credit, to issue
or to extend the expiry of, or to renew or increase the amount of,
such Letter of Credit; and the terms "Issued," "Issuing" and
"Issuance" have corresponding meanings.
"Issuing Bank" means NationsBank, and in the case of the
Existing Letter of Credit, BofA, or, upon the request of the Companies
with the consent of the Agent, another Bank, in its capacity as issuer
of one or more Letters of Credit hereunder, together with any
successor letter of credit issuer arising under Section 10.1(b) or
Section 10.9.
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<PAGE> 29
"Italian Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Italy.
"Kodak" means the Eastman Kodak Company, a New Jersey
corporation.
"Kodak Acquisition Documents" means the Asset Purchase
Agreement and all other documents required to be delivered by Kodak
and its Subsidiaries and Danka PLC and its Subsidiaries pursuant to
the Asset Purchase Agreement.
"L/C Advance" means each Bank's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C Amendment Application" means an application form for
amendment of outstanding standby or commercial documentary letters of
credit as shall at any time be in use at the Issuing Bank, as the
Issuing Bank shall request.
"L/C Application" means an application for Issuances of
standby or commercial documentary letters of credit in such form as
shall at any time be in use at the Issuing Bank, shall be consistent
with the terms of this Credit Agreement and shall be agreed to by the
Company applying for the applicable Letter of Credit.
"L/C Borrowing" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been
reimbursed on the date when made or converted into an appropriate
Borrowing.
"L/C Commitment" means the commitment of the Issuing Bank to
Issue, and the commitment of the Banks severally to participate in,
Letters of Credit from time to time Issued or outstanding under
Article III, in an aggregate amount not to exceed on any date (i) in
the case of Sublimit L/Cs the amount of $75,000,000 and (ii) in the
case of FIP L/Cs the amount of $550,000,000, as the same shall be
reduced as a result of a reduction in the L/C Commitment pursuant to
Section 2.8; provided that the L/C Commitment in the case of Sublimit
L/Cs is a part of the combined Revolving Commitments, rather than a
separate, independent commitment and shall not at any time exceed the
combined Revolving Commitments; and, provided, further, that the L/C
Commitment in the case of the FIP L/Cs is a part of the combined Term
Loan Commitments, rather than a separate, independent commitment and
shall not at any time exceed the combined Term Loan Commitments.
"L/C Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Letters of
Credit, including all outstanding L/C Borrowings.
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<PAGE> 30
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"Lending Office" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office", "Domestic Lending
Office", "Offshore Lending Office" or "Offshore Currency Lending
Office", as the case may be, on Schedule 11.2, or such other office or
offices as such Bank may from time to time notify the Companies and
the Agent.
"Letters of Credit" means any of the Sublimit L/Cs or FIP
L/Cs.
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale
or other title retention agreement), the interest of a lessor under a
capital lease, or any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any
financing statement naming the owner of the asset to which such lien
relates as debtor, under the Uniform Commercial Code or any comparable
law and any contingent or other agreement to provide any of the
foregoing, but not including the interest of a lessor under an
operating lease.
"Loan" means an extension of credit to a Company under Article
II or Article III, and may be a Revolving Loan, Swing Line Loan, Bid
Loan, Term Loan or L/C Advance.
"Loan Documents" means this Agreement, any Notes, the Support
Documents, the Fee Letters, the L/C-Related Documents, and all other
documents delivered to the Agent or any Bank in connection with the
transactions contemplated by this Agreement.
"Luxembourg Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Luxembourg.
"Majority Banks" means (a) any time prior to the Termination
Date (or such earlier date as the Commitments shall terminate in
accordance with the terms hereof), or after the Termination Date (or
such earlier date as the Commitments shall terminate in accordance
with the terms hereof) if no Loans are outstanding, Banks then holding
greater than 50% of the Commitments and International Swing Line
Commitments, and (b) otherwise, Banks then holding greater than 50% of
the Loans and International Swing Line Advances. For purposes of this
definition, (i) each Bank shall be deemed to hold all outstanding Bid
Loans of such Bank's Designated Bidder and (ii) each Bank shall be
deemed to hold its Pro Rata Share of all Swing Line Outstandings and
International Swing Line Outstandings, unless it shall have failed to
pay to NationsBank or the applicable International Swing Line Bank its
Pro Rata Share thereof after demand therefor in accordance with the
terms of Section
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2.19 or 2.20, in which case the Pro Rata Share of such Bank in all
Swing Line Outstandings shall be deemed to be held by NationsBank and
in all International Swing Line Outstandings shall be deemed to
be held by the applicable International Swing Line Bank.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of Danka
PLC and its Subsidiaries taken as a whole, (b) a material impairment
of the ability of any Company or any Subsidiary to perform under any
Loan Document or to avoid or cure, as applicable, any Event of
Default, or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against any Company or any Subsidiary
of any Loan Document; provided, however, in case of any event,
condition or occurrence described in clause (b) or (c) which affects
one or more Subsidiaries other than any Company, if (x) immediately
upon becoming aware of such event, condition or occurrence but in any
event within 10 Business Days of such event, condition or occurrence,
the Companies shall cause a Responsible Officer to notify the Agent in
writing of the date and details of such event, condition or occurrence
and (y) within 10 Business Days of such event, condition or occurrence
the Companies shall either (1) cause such event, condition or
occurrence to be remedied in such manner so that no impairment or
adverse effect described in clause (b) or (c) shall remain in
existence or (2) deliver to the Agent such additional duly authorized
and executed Guaranties of other Subsidiaries (and related duly
authorized and executed Pledge Agreements or supplements to existing
Pledge Agreements) and related documents as described in the first
sentence of Section 7.8 so that, after giving effect to such
additional Guaranties and Pledge Agreements (or supplements), any
impairment or adverse effect described in clause (b) or (c) shall not
affect in any manner the obligations and liabilities of, or the Loan
Documents executed by, the Companies and the Guarantors to which are
collectively attributable not less than 85% of each of the
consolidated revenues and the consolidated assets of Danka PLC and its
Subsidiaries at the end of the most recently ended fiscal year, then
upon the compliance with clauses (x) and (y) above, a Material Adverse
Effect shall not be deemed to have occurred.
"Mexican Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Mexico.
"Minimum Tranche" means in respect of Loans comprising part of
the same Borrowing, or to be converted or continued under Section 2.4,
(a) in the case of Base Rate Loans and Offshore Rate Loans in Dollars,
$4,000,000 or any multiple of $1,000,000 in excess thereof, or (as to
Revolving Borrowings) the aggregate amount of the then unused
Revolving Commitments, and (b) in the case of Offshore Currency Loans,
a multiple of 100,000 units of the Applicable Currency in excess of
the Dollar Equivalent Amount
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(calculated by the Agent as of the date of receipt of the relevant
Irrevocable Notice of Committed Activity) of $4,000,000 or (as to
Revolving Commitments) the aggregate amount of the then unused
Revolving Commitments.
"Multiemployer Plan" means a "multiemployer plan", within the
meaning of Section 4001 (a) (3) of ERISA, to which any Company or any
ERISA Affiliate makes, is making, or is obligated to make
contributions or, during the preceding three calendar years, has made,
or been obligated to make, contributions.
"NationsBank" means NationsBank, N.A., a national banking
association.
"Net Issuance Proceeds" means with respect to the issuance and
sale of any Indebtedness (including the consummation of any Permitted
Receivables Securitization) of Danka PLC or any Subsidiary, the
principal amount of such Indebtedness, less any costs of issuance and
any original issue discount.
"Net Proceeds" means with respect to the sale, lease, transfer
or other disposition of assets of Danka PLC or any Subsidiary
(including sales of equity interests in a Subsidiary to a Person other
than Danka PLC or its Subsidiaries), the cash proceeds from such sale,
less expenses of such sale, any taxes actually paid or payable as a
result of such sale and any secured Indebtedness required to be repaid
in connection with such sale.
"Netherlands Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in the
Netherlands.
"New Zealand Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in New Zealand.
"Notes" means the Revolving Loan Notes, Term Loan Notes, Swing
Line Note and the Bid Loan Notes.
"Obligations" means, collectively, (i) all advances, debts,
liabilities, obligations, covenants and duties arising under any Loan
Document owing by any Company to any Bank, any Designated Bidder, the
Agent, or any Indemnified Person, or arising under any Swap Contract
between any Company and any Bank or the Agent, in any case, whether
direct or indirect (including those acquired by assignment), absolute
or contingent, due or to become due, now existing or hereafter
arising, and (ii) all International Swing Line Obligations and
obligations owing to Banks in respect of International Swing Line
Participations.
"Offshore Currency" means at any time, and provided that the
Agent determines in its reasonable judgment that such currency is at
such time freely traded in offshore interbank foreign exchange markets
and is freely transferable and freely convertible into Dollars and
such currency is readily available to the Banks, British pounds
sterling,
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Canadian dollars, Dutch guilders, German marks, French francs, Belgian
francs, Italian lire, Spanish pesetas, Japanese yen and Australian
dollars, and shall include, with respect to each Credit Extension in
an Agreed Alternate Currency, such Agreed Alternate Currency.
"Offshore Currency Lending Office" means the office of a Bank
from which Offshore Currency Loans are to be made as set forth in
Schedule 11.2.
"Offshore Currency Loan" means any Offshore Rate Loan
denominated in an Offshore Currency.
"Offshore Rate" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/100th of 1%)
determined by the Agent as follows:
IBOR
--------------------------------
Offshore Rate = 1 - Eurocurrency Reserve Percentage
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date
of any change in the Eurocurrency Reserve Percentage.
"Eurocurrency Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect
on such day (whether or not applicable to any Bank) under
regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"IBOR" means for any Interest Period with respect to Offshore
Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/32nd of 1%)
determined by the Agent as the rate at which deposits in the
Applicable Currency in the approximate amount of NationsBank's
Offshore Rate Loan for such Interest Period would be offered
by NationsBank (at such office as may be selected for such
purpose by the Agent), to major banks in the offshore
interbank eurocurrency market at their request at
approximately 11:00 a.m. (London time) two Business Days prior
to the commencement of such Interest Period.
"Offshore Rate Loan" means a Syndicated Loan that bears
interest based on the Offshore Rate.
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"Organization Documents" means, for any corporation, the
certificate or articles of incorporation, memorandum of association,
articles of association, the bylaws, or other similar organizational
documents, any certificate of determination or instrument relating to
the rights of preferred shareholders of such corporation, any
shareholder rights agreement, and all applicable resolutions of the
board of directors (or any committee thereof) of such corporation
adopting, supplementing or modifying any of the foregoing and, for any
entity other than a corporation, the equivalent of the foregoing,
including the partnership agreement (or comparable agreement) of any
partnership.
"Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.
"Override Event" means the occurrence of any event or
condition commencing an Override Period.
"Override Period" means any period of time during which either
of the following events shall have occurred and shall be continuing:
(i) the long-term unsecured, unenhanced Indebtedness of Danka PLC
shall be rated BBB-, or higher, by Standard & Poors Ratings Services,
and Baa3, or higher, by Moody's Investors Service, Inc., or (ii) the
Consolidated Total Leverage Ratio for the four consecutive fiscal
quarters of Danka PLC most recently ended is less than 2.00 to 1.00.
"Overnight Rate" means, for any day, the rate of interest per
annum at which overnight deposits in the Applicable Currency, in an
amount approximately equal to the amount with respect to which such
rate is being determined, would be offered for such day by
NationsBank to major banks in the London interbank market.
"Participant" has the meaning specified in Section 11.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which either Company
sponsors or maintains, or to which it makes, is making, or is
obligated to make contributions, or in the case of a multiple employer
plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five plan years.
"Permitted Receivables Securitization" means limited recourse
or nonrecourse sales and assignments of accounts receivable of Danka
PLC or its Subsidiaries to one or more special purpose entities, in
connection with the issuance of obligations by such special purpose
entities secured by such accounts, the proceeds of the issuance of
which
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obligations shall be made available to Danka PLC or its Subsidiaries
at such rates of advance, and the obligations issued by such special
purpose entities shall be in such amount or amounts, bear such
rate or rates of interest, and be subject to such customary terms and
conditions, all as shall be reasonably acceptable to the Agent;
provided, however, that the maximum face amount of sold accounts
receivable which may be outstanding at any time is $300,000,000.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which a Company sponsors or maintains or to which a
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan, other than a Plan maintained outside the
United States primarily for the benefit of persons who are not U.S.
residents.
"Pledge Agreements" means, collectively, the pledge agreements
of certain Companies and Guarantors, which Companies and Guarantors as
of the Closing Date are described in Schedule IV, in form reasonably
satisfactory to the Agent and the Banks pursuant to which there is
pledged to the Agent for the benefit of the Banks all of the ownership
interest in (i) Dankalux Sarl, (ii) Danka Luxembourg Sarl, (iii) each
Subsidiary (other than Inactive Subsidiaries, Subsidiaries
separately listed in Schedule IV and Included Country Holding
Companies the equity interests in which are owned by Dankalux Sarl)
operating in each Included Country, and (iv) such other Subsidiaries
as may be required by Section 7.8.
"Pre-Acquisition Period" means that period of time within any
period of four consecutive fiscal quarters of Danka PLC and its
Subsidiaries occurring prior to the consummation of the acquisition by
Danka PLC and its Subsidiaries of the Acquired Business.
"Pro Forma Historical Statements" means the pro forma
consolidated financial statements (including balance sheets and income
and cash flow statements) of Danka PLC and its Subsidiaries for the
interim fiscal periods ended June 30, 1995 and June 30, 1996 and for
the fiscal year ended March 31, 1996, giving historical pro forma
effect to the acquisition of the Acquired Business.
"Pro Forma Projections" means the pro forma consolidated
financial statement projections of Danka PLC and its Subsidiaries for
each of the fiscal years ending March 31, 1998 through March 31, 2002,
giving effect to the acquisition of the Acquired Business, in form and
detail satisfactory to the Agent.
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"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Bank's Commitment divided by the
combined Commitments of all Banks.
"Proxy Statement" means the Proxy Statement (Extraordinary
General Meeting) of Danka PLC issued in connection with the December
11, 1996 meeting of shareholders of Danka PLC.
"Ratable Reduction of Term Loans" means the application of
amounts to reduce pro rata each unpaid installment of the Term Loan as
described on Schedule V.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has
been waived in regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or final,
nonappealable determination of an arbitrator or of a Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means, with respect to any Company, the
principal executive officers or the president or equivalent
representatives of such Company, or any other officer or equivalent
representative having substantially the same authority and
responsibility; or, with respect to compliance with financial
covenants, the chief financial officer or the treasurer of such
Company, or any other officer or representative having substantially
the same authority and responsibility.
"Restricted Subsidiaries" means, collectively, the
Subsidiaries listed on Schedule VIII.
"Revolving Borrowing" means a Borrowing hereunder consisting
of Revolving Loans made on the same day by the Banks ratably according
to their respective Pro Rata Shares and, in the case of Offshore Rate
Loans, having the same Interest Periods.
"Revolving Commitment", as to each Bank, has the meaning
specified in Section 2.1(a).
"Revolving Loan" has the meaning specified in Section 2.1(a)
and may be an Offshore Rate Loan or a Base Rate Loan (each, a "Type"
of Revolving Loan).
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"Revolving Loan Note" means a note substantially in the form
of Exhibit F and delivered to a Bank pursuant to Section 2.2.
"Revolving Loan Outstandings" means the sum of outstanding
principal amounts of Revolving Loans, Bid Loans, Sublimit L/C
Obligations and Swing Line Outstandings.
"Same Day Funds" means (i) with respect to disbursements and
payments in Dollars, immediately available funds, and (ii) with
respect to disbursements and payments in an Offshore Currency, same
day or other funds as may be determined by the Agent to be customary
in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Offshore Currency.
"Spanish Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Spain.
"Spot Rate" for a currency means the rate quoted (expressed as
a decimal, rounded to the fourth decimal place) to the Agent as
the spot rate for the purchase of such currency with another currency
through the FX Trading Office at approximately 11:00 a.m. (Charlotte
time) on the date two Business Days prior to the date as of which the
foreign exchange settlement is made.
"Sublimit L/C" means any letter of credit (whether standby
letter of credit or commercial documentary letter of credit) issued by
an Issuing Bank pursuant to Section 3.1(a) and the Existing Letter of
Credit.
"Sublimit L/C Obligations" means at any time the sum of (a)
the aggregate undrawn amount of all Sublimit L/Cs then outstanding,
plus (b) the amount of all unreimbursed drawings under Sublimit L/Cs,
including an L/C Borrowing in respect of a Sublimit L/C.
"Subordinated Indebtedness" means collectively (i) the
Convertible Subordinated Notes and (ii) other Indebtedness of a
Company subordinated to the Obligations in form and substance
(including terms and conditions) satisfactory to the Majority Banks,
it being understood that the Subordination Agreement in the form
attached hereto as Exhibit G (excluding Section XI(b) thereof) is so
satisfactory.
"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other
business entity of which more than 50% of the voting stock, membership
interests or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by such
Person, or one or more of the Subsidiaries of such Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of Danka
PLC.
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"Support Documents" means, collectively, (i) the Guaranties
and Pledge Agreements and all other guaranties and pledges, and other
instruments or agreements in favor of the Banks or the Agent for the
benefit of the Banks now or hereafter delivered by the applicable
Company, Guarantor or other Subsidiary to the Banks or the Agent
pursuant to or in connection with the transactions contemplated
hereby, and all documents now or hereafter filed under applicable law
by the applicable Company, Guarantor or other Subsidiary in favor of
the Banks or the Agent for the benefit of the Banks as secured party,
and (ii) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of any of
the foregoing.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap or option, bond, note or bill
option, interest rate option, forward foreign exchange transaction,
cap, collar or floor transaction, currency swap, cross-currency rate
swap, swaption, currency option or any other, similar transaction
(including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise
clearly requires, any master agreement relating to or governing any or
all of the foregoing.
"Swap Termination Value" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date
referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined by the
applicable Company based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap
Contracts (which may include any Bank).
"Swedish Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Sweden.
"Swing Line" means the revolving line of credit established by
NationsBank in favor of the Companies pursuant to Section 2.19.
"Swing Line Borrowing" means a Borrowing under the Swing Line.
"Swing Line Borrowing Notice" means a notice substantially in
the form of Exhibit L.
"Swing Line Loans" means loans made by NationsBank to the
Companies pursuant to Section 2.19.
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"Swing Line Note" means the promissory note of the Companies
evidencing Swing Line Loans executed and delivered to NationsBank as
provided in Section 2.19 substantially in the form of Exhibit M.
"Swing Line Outstandings" means, as of any date of
determination, the aggregate principal amount of all Swing Line Loans
then outstanding.
"Swing Line Participation" means, with respect to any Bank
(other than NationsBank) and a Swing Line Loan, the extension of
credit represented by the participation of such Bank in the liability
owed to NationsBank in respect of such Swing Line Loan.
"Swiss Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in Switzerland.
"Syndicated Borrowing" means either or both a Revolving
Borrowing or a Term Borrowing.
"Syndicated Loan" means either or both a Revolving Loan or a
Term Loan.
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or
similar charges, and all liabilities with respect thereto, excluding,
in the case of each Bank and the Agent, respectively, taxes imposed on
or measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent,
as the case may be, is organized or maintains a Lending Office for
purposes of this Agreement.
"Term Borrowing" means a Borrowing hereunder consisting of
Term Loans made on the same day by the Banks ratably according to
their respective Pro Rata Shares and, in the case of Offshore Rate
Loans, having the same Interest Periods.
"Term Loan" has the meaning specified in Section 2.1(b) and
may be an Offshore Rate Loan or a Base Rate Loan (each, a "Type" of
Term Loan).
"Term Loan Commitment", as to each Bank, has the meaning
specified in Section 2.1(b).
"Term Loan Note" means a note substantially in the form of
Exhibit H and delivered to each Bank pursuant to Section 2.2.
"Term Loan Outstandings" means the sum of the outstanding
principal amount of Term Loans and the FIP L/C Obligations.
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"Termination Date" means the earlier to occur of:
(a) December 5, 2002, and
(b) (i) in the case of Revolving Loans, Bid Loans,
Swing Line Loans, International Swing Line Loans and Sublimit L/Cs,
the date on which the Revolving Commitments terminate and all the
monetary Obligations, other than Obligations arising in respect
of Term Loans and FIP L/Cs (and obligations in the nature of
continuing indemnities or for fees and disbursements of third parties
not yet invoiced to an obligor), have been paid in full in accordance
with the provisions of this Agreement; and
(ii) in the case of Term Loans and FIP L/Cs, the
date on which the Term Loan Commitments terminate and all monetary
Obligations, other than Obligations arising in respect of Revolving
Loans, Bid Loans and Sublimit L/Cs (and obligations in the nature of
continuing indemnities or for fees and disbursements of third parties
not yet invoiced to an obligor), have been paid in full in accordance
with the provisions of this Agreement.
"Total Indebtedness" means, at any time, all Indebtedness of
Danka PLC and its Subsidiaries on a consolidated basis at such time.
"Total Offshore Currency Sublimit" means $650,000,000;
provided that in determining whether such amount has been exceeded,
(i) there shall be excluded the Dollar Equivalent Amount of FIP L/Cs
and of Loans in British pounds sterling used to make FIP Holder
Payments and (ii) the International Swing Line Facility unless it
shall have been terminated shall be assumed to be fully funded in
Offshore Currencies.
"Type" has the meaning specified in the definition of
"Revolving Loan" and "Term Loan".
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding that Plan pursuant to Section 412 of the
Code for the applicable plan year.
"U.K. Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in the United
Kingdom.
"United States" and "U.S." each means the United States of
America.
"U.S. Guarantor" means a Subsidiary as listed under the
heading "Guarantors" in Schedule IV that was organized in the United
States.
"Valuation Date" has the meaning specified in Section 2.5(a).
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1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(iv) The term "property" means Property.
(v) The term "Charlotte time" means the time of day as
of any determination thereof in Charlotte, North Carolina.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation are to be
construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
1.3 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied as utilized by the Companies. If any change after
the Closing Date in GAAP as in effect on the Closing Date shall result in a
change in any calculation required to determine compliance with any
provision contained in this Agreement, the Companies and the Majority Banks
will negotiate in good faith to amend such
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provision in a manner to reflect such change such that the determination of
compliance with such provision shall yield the same substantive result as would
have obtained prior to such change in GAAP. Until such an amendment is entered
into, covenants shall be calculated in accordance with GAAP as in effect
immediately preceding such change.
(b) References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of the Companies.
1.4 Currency Equivalents Generally. For all purposes of this
Agreement (but not for purposes of the preparation of any financial statements
delivered pursuant hereto), the equivalent in any Offshore Currency or other
currency of an amount in Dollars, and the equivalent in Dollars of an amount in
any Offshore Currency or other currency, shall be determined as set forth in
the definition of Dollar Equivalent Amount.
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ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments; Joint and Several Liability.
(a) Each Bank severally agrees, on the terms and conditions set
forth herein, to make loans in Applicable Currencies to Danka PLC, Danka
Holding or Dankalux (each such loan, a "Revolving Loan") from time to time on
any Business Day during the period from the Effective Date to the Termination
Date (or such earlier date as the Revolving Commitments of all Banks shall
terminate in accordance with the terms hereof), in an aggregate Dollar
Equivalent Amount of principal not to exceed at any time outstanding the amount
set forth on Schedule 2.1 under the heading "Revolving Commitment" (such amount
as the same may be reduced under Section 2.8 or 2.9(d) or (f) or changed as a
result of one or more assignments under Section 11.8, such Bank's "Revolving
Commitment"); provided, however, that, after giving effect to any Revolving
Borrowings and all Sublimit L/C Obligations, Bid Borrowings and Swing Line
Outstandings, the aggregate Dollar Equivalent Amount of the principal of all
Revolving Loan Outstandings as determined pursuant to Section 2.5 shall not at
any time exceed the combined Revolving Commitments minus the Currency Hedge
Utilization. Each Revolving Loan will be made to Danka PLC, Danka Holding or
Dankalux. Within the limits of each Bank's Revolving Commitment, and subject to
the other terms and conditions hereof, the Companies may borrow under this
Section 2.1(a), prepay under Section 2.9 and Section 2.11 and reborrow under
this Section 2.1 (a). Such Revolving Loans may be Offshore Rate Loans or Base
Rate Loans, except that all Base Rate Loans shall be in Dollars and, after
giving effect to all Revolving Loan Outstandings in Offshore Currencies, and,
after giving effect to all Term Loan Outstandings in Offshore Currencies,
subject to Section 2.11(b) the Dollar Equivalent Amount of all Revolving Loan
Outstandings and Term Loan Outstandings plus all International Swing Line
Outstandings (which shall be deemed to be outstanding in the Dollar Equivalent
Amount of $75,000,000) in Offshore Currencies shall not exceed the Total
Offshore Currency Sublimit.
(b) Each Bank severally agrees, on the terms and conditions set
forth herein, to make loans (x) on the Effective Date, to the Companies in one
or more Applicable Currencies as may be necessary to permit the payment of the
purchase price of the Acquired Business in accordance with the Asset Purchase
Agreement, and (y) thereafter, in Dollars or British pounds sterling to Danka
PLC (each such loan, a "Term Loan") from time to time on any Business Day
during the period from the Effective Date to the Termination Date (or such
earlier date as the Term Loan Commitments of all Banks shall terminate in
accordance with the terms hereof), in an aggregate Dollar Equivalent Amount of
principal not to exceed at any time outstanding the amount set forth on
Schedule 2.1 under the heading "Term Loan Commitment" (such amount as the same
may be reduced under Section 2.9 or changed as a result of one or more
assignments under Section 11.8, such Bank's "Term Loan Commitment"); provided,
however, that (i) after giving effect to any Term Loan Borrowing and all FIP
L/C Obligations, the aggregate Dollar Equivalent Amount of the principal amount
of all outstanding Term Loans and all FIP L/C Obligations (other than FIP L/C
Obligations being extinguished substantially simultaneously with such Term Loan
Borrowing)
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shall not, except as expressly permitted under Section 2.11, on any Valuation
Date exceed the combined Term Loan Commitments and (ii) Term Loan Borrowings
under clause (y) of this sentence may be made under this Section 2.1(b) only by
Danka PLC and only for the purpose of making (either directly or through the
reimbursement of drawings made under FIP L/Cs for the purpose of making) FIP
Holder Payments in respect of outstanding FIPs in an aggregate amount not less
than the amount of such Term Loan Borrowing. Term Loans may be Offshore Rate
Loans or Base Rate Loans, except that all Base Rate Loans shall be in Dollars
and, after giving effect to all Term Loan Outstandings in Offshore Currencies,
and subject to Section 2.11(b) the Dollar Equivalent Amount of all Revolving
Loan Outstandings and Term Loan Outstandings in Offshore Currencies plus all
International Swing Line Outstandings (which shall be deemed to be outstanding
in the Dollar Equivalent Amount of $75,000,000) shall not exceed the Total
Offshore Currency Sublimit.
(c) Notwithstanding any other provision of this Agreement, each
Company shall be jointly and severally liable as primary obligor and not merely
as surety for repayment of all Obligations arising under the Loan Documents and
the International Swing Line Agreements. Such joint and several liability
shall apply to each Company regardless of whether (i) any Loan was only
requested by or made to another Company or the proceeds of any Loan were used
only by another Company, (ii) any Letter of Credit was Issued on the
application of another Company, (iii) any interest rate election was made only
by another Company, or (iv) any indemnification obligation or any other
obligation arose only as a result of the actions of another Company; provided
the liability of each of the Companies other than Danka PLC under this
Agreement, the Notes and the other Loan Documents shall be limited to the
maximum amount of the Obligations for which such other Company may be liable
without violating any applicable fraudulent conveyance, fraudulent transfer or
comparable laws. Each Company shall retain any right of contribution arising
under applicable law against the other Companies as the result of the
satisfaction of any Obligations; provided, no Company shall assert such right
of contribution against any other Company until the Obligations shall have been
paid in full.
Without limiting the foregoing provisions of this Section 2.1(c),
each of the Companies hereby irrevocably, absolutely and unconditionally
guarantees the full and punctual payment or performance when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Obligations of each other Company and of each International
Swing Line Borrower, whether owing to the Agent, any Bank, or either
International Swing Line Bank. This guarantee constitutes a guaranty of
payment and not of collection. The liability of each of the Companies other
than Danka PLC under the immediately preceding two sentences shall be limited
to the maximum amount for which such other Company may be liable without
violating any applicable fraudulent conveyance, fraudulent transfer or
comparable laws.
It is the intention of the parties that with respect to each Company
its obligations hereunder and under the other Loan Documents shall be absolute,
unconditional and irrevocable irrespective of:
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<PAGE> 45
(i) any lack of validity, legality or enforceability of
this Agreement, any Note or any other Loan Document as to any other
Company or any International Swing Line Agreement as to any
International Swing Line Borrower;
(ii) the failure of the Agent or any Bank or either
International Swing Line Bank
(A) to enforce any right or remedy
against any other Company or any other Person
(including any guarantor or International Swing
Line Borrower) under the provisions of this
Agreement, any Note, any other Loan Document or any
International Swing Line Agreement or otherwise, or
(B) to exercise any right or remedy
against any guarantor of, or collateral securing,
any Obligations;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any
other extension, compromise or renewal of any Obligations;
(iv) any reduction, limitation, impairment or
termination of any Obligations with respect to any other Company or
any other Person (including any guarantor or International Swing Line
Borrower) for any reason including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and
each Company hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality, nongenuineness, irregularity,
compromise or unenforceability of, or any other event or occurrence
affecting, any Obligations with respect to any other Company;
(v) any addition, exchange, release, surrender or
nonperfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any guaranty,
held by the Agent, any Bank, either International Swing Line Bank or
any holder of any Note securing any of the Obligations; or
(vi) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, any other Company or any International Swing Line Borrower, any
surety or any guarantor.
Each Company agrees that its joint and several liability hereunder
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations is rescinded
or must be restored by the Agent, any Bank, either International Swing Line
Bank or any holder of any Note, upon the insolvency, bankruptcy or
reorganization of any Company or any International Swing Line Borrower as
though such payment had not been made.
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<PAGE> 46
Each Company hereby expressly waives: (a) notice of the Banks'
acceptance of this Agreement; (b) notice of the existence or creation or
non-payment of all or any of the Obligations; (c) presentment, demand, notice
of dishonor, protest, and all other notices whatsoever other than notices
expressly provided for in this Agreement and (d) all diligence in collection or
protection of or realization upon the Obligations or any thereof, any
obligation hereunder, or any security for or guaranty of any of the foregoing.
No delay on any of the Banks', either International Swing Line Bank's
or the Agent's part in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by any of the Banks, either
International Swing Line Bank or the Agent of any right or remedy shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy. No action of the Agent, either International Swing Line Bank
or any of the Banks permitted hereunder shall in any way affect or impair any
of their rights or any of their obligations to any of the Companies under this
Agreement.
2.2 Loan Accounts.
(a) The Loans made by each Bank (including NationsBank as provider
of the Swing Line) or Designated Bidder and the Letters of Credit Issued by the
Issuing Bank shall be evidenced by one or more loan accounts or records
maintained by such Bank, Designated Bidder or Issuing Bank, as the case may be,
in the ordinary course of business. The loan accounts or records maintained by
the Agent, the Issuing Bank and each Bank or Designated Bidder shall be prima
facie evidence of the amount of the Loans made by the Banks and Designated
Bidders to the Companies and the interest and payments thereon. Any failure to
record or any error in doing so shall not, however, limit, expand or otherwise
affect the obligations of the Companies hereunder.
(b) Upon the request of any Bank or Designated Bidder made through
the Agent, the Loans made by such Bank may be evidenced by one or more Notes,
in addition to loan accounts. Each such Bank or Designated Bidder may, at its
option, endorse on the schedules annexed to its Note(s) the date, amount and
maturity of each Loan made by it and the amount of each payment of principal
made by a Company with respect thereto. Each such Bank and Designated Bidder
is irrevocably authorized by each Company to endorse its Note(s) and each
Bank's or Designated Bidder's record shall be prima facie evidence; provided,
however, that the failure of a Bank or Designated Bidder to make, or an error
in making, a notation thereon with respect to any Loan shall not limit, expand
or otherwise affect the obligations of any Company hereunder or under any such
Note to such Bank or Designated Bidder.
2.3 Procedure for Syndicated Borrowing.
(a) Each Syndicated Borrowing shall be made upon the borrowing
Company's irrevocable written notice delivered to the Agent in the form of an
Irrevocable Notice of Syndicated Activity (which notice must be received by the
Agent prior to 11:00 a.m. (Charlotte time) (i) three Business Days prior to the
requested Borrowing Date, in the case of Offshore Rate Loans denominated in
Dollars or Offshore Currency Loans; and (ii) on the same Business Day as
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<PAGE> 47
a requested Borrowing Date in the case of Base Rate Loans, with settlement of
Base Rate Loans to be made in the United States), specifying:
(A) the Company by which such Syndicated Borrowing is
to be made;
(B) whether such Syndicated Borrowing is a Revolving
Borrowing or a Term Borrowing;
(C) the amount of such Syndicated Borrowing, which
shall be in an aggregate amount not less than the applicable Minimum
Tranche;
(D) the requested Borrowing Date, which shall be a
Business Day;
(E) the Type of Syndicated Loans comprising such
Syndicated Borrowing;
(F) in the case of a Syndicated Borrowing comprised of
Offshore Currency Loans, the Applicable Currency; and
(G) in the case of a Syndicated Borrowing comprised of
Offshore Rate Loans, the duration of the Interest Period applicable to
such Syndicated Borrowing included in such notice. If the Irrevocable
Notice of Syndicated Activity fails to specify the duration of the
Interest Period for any Syndicated Borrowing comprised of Offshore
Rate Loans, such Interest Period shall be one month.
(b) Upon receipt of an Irrevocable Notice of Syndicated Activity
by the Agent, the Agent shall determine the availability of the Commitments
hereunder as of the date of receipt by the Agent of such Irrevocable Notice of
Syndicated Activity. An indicative Dollar Equivalent Amount of any Syndicated
Borrowing in an Offshore Currency will be determined by the Agent for the
related Borrowing on the Valuation Date therefor in accordance with Section
2.5(a). Upon receipt of such Irrevocable Notice of Syndicated Activity, the
Agent will promptly notify each Bank thereof at such Bank's respective
applicable Lending Office and of the amount of such Bank's Pro Rata Share of
such Borrowing. In the case of a Borrowing comprised of Offshore Currency
Loans, such notice will provide the amounts in the Applicable Currency of each
Bank's Pro Rata Share of such Borrowing, and the Agent will, on the Valuation
Date therefor, promptly notify each Bank of the Dollar Equivalent Amount of
such Bank's Pro Rata Share of such Borrowing. In the case of a Revolving
Borrowing comprised of Offshore Currency Loans, if the determination by the
Agent of the Dollar Equivalent Amount of such Revolving Borrowing as described
in the immediately preceding sentence shall result in the Dollar Equivalent
Amount of all Revolving Loan Outstandings plus the proposed Revolving Borrowing
being in excess of the combined Revolving Commitments minus the Currency Hedge
Utilization, then such Borrowing shall be reduced by the amount necessary to
comply with Section 2.1(a) regardless of the Minimum Tranche requirement. In
the case of a Term Borrowing comprised of Offshore Currency Loans, if the
determination by the Agent of the Dollar Equivalent Amount of such Term
Borrowing as described in the second preceding sentence shall result in the
Dollar Equivalent
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<PAGE> 48
Amount of all Term Loan Outstandings (other than FIP L/C Obligations being
extinguished substantially simultaneously with such Term Borrowing) plus the
proposed Term Borrowing being in excess of the combined Term Loan Commitments,
then such Borrowing shall be reduced by the amount necessary to comply with
Section 2.1(b) regardless of the Minimum Tranche requirement. For purposes of
the two immediately preceding sentences, the Agent shall value the Dollar
Equivalent Amount of all Loans and Letters of Credit other than the applicable
Borrowing as at the most recent Valuation Date for each Loan or Letter of
Credit.
(c) Each Bank will make the amount of its Pro Rata Share of each
Syndicated Borrowing available to the Agent for the account of the Company
specified in the Irrevocable Notice of Syndicated Activity at the Agent's
Payment Office on the Borrowing Date requested by the applicable Company in
Same Day Funds and in the requested currency (i) in the case of a Borrowing
comprised of Loans in Dollars, by 2:00 p.m. Charlotte time and (ii) in the case
of a Borrowing comprised of Offshore Currency Loans by such time as the Agent
may specify. The proceeds of all such Loans will then be made available to the
Company specified in the Irrevocable Notice of Syndicated Activity by the Agent
in Same Day Funds by wire transfer in accordance with written instructions
provided to the Agent by such Company of like funds as received by the Agent.
(d) After giving effect to any Syndicated Borrowing, unless the
Agent shall otherwise consent, there may not be more than fifteen different
Interest Periods in effect in respect of all Syndicated Loans and Bid Loans
together then outstanding and no more than ten different Applicable Currencies
outstanding.
2.4 Conversion and Continuation Elections - Syndicated Loans.
(a) Each Company may, upon irrevocable written notice to the Agent
in accordance with Section 2.4(b) with respect to Syndicated Loans made to such
Company:
(i) elect, as of any Business Day, in the case of Base
Rate Loans, or as of the last day of the applicable Interest Period,
in the case of Offshore Rate Loans, to convert any such Loans (or any
part thereof in an amount not less than the Minimum Tranche) into
Syndicated Loans of any other Type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Syndicated Loans having Interest
Periods expiring on such day (or any part thereof in an amount not
less than the Minimum Tranche);
provided that Syndicated Loans may not be converted into or continued as
Syndicated Loans in a different currency; and provided further, that if at any
time the aggregate amount of Offshore Rate Loans in respect of any Syndicated
Borrowing is reduced by payment, prepayment, or conversion of part thereof to
be less than $5,000,000, such Offshore Rate Loans, if in Dollars, shall
automatically convert into Base Rate Loans, and on and after such date the
right of such
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<PAGE> 49
Company to continue such Syndicated Loans as, and convert such Syndicated Loans
into, Offshore Rate Loans shall terminate.
(b) Each Company shall deliver an Irrevocable Notice of Syndicated
Activity to be received by the Agent not later than 11:00 am. (Charlotte time),
with respect to Syndicated Loans made to such Company, (i) at least three
Business Days in advance of the Conversion/Continuation Date for the conversion
into or continuation of any Offshore Rate Loan and (ii) on the same Business
Day as the Conversion/Continuation Date for the conversion into or continuation
of a Base Rate Loan, specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Syndicated Loans to be
converted or continued;
(C) whether such Syndicated Loans are Revolving Loans
or Term Loans;
(D) the Type of Syndicated Loans resulting from the
proposed conversion or continuation; and
(E) other than in the case of conversions into Base
Rate Loans, the duration of the requested Interest Period.
(c) If the Company that has borrowed Offshore Rate Loans in
Dollars has failed to select a new Interest Period to be applicable to such
Offshore Rate Loans in Dollars upon the expiration of any Interest Period
applicable to such Offshore Rate Loans in Dollars on or prior to the third
Business Day in advance of the expiration of the current Interest Period
applicable thereto as provided in Section 2.4(b), or if any Event of Default
then exists, unless the Majority Banks otherwise agree, such Company shall be
deemed to have elected to convert such Offshore Rate Loans in Dollars into Base
Rate Loans effective as of the expiration date of such Interest Period. If the
Company to whom any Offshore Rate Loans in currencies other than Dollars were
made has failed to select a new Interest Period to be applicable to such
Offshore Currency Loans on or prior to the third Business Day in advance of the
expiration date of the current Interest Period applicable thereto as provided
in Section 2.4(b), such Company shall be deemed to have elected to continue
such Offshore Currency Loans in the same currency on the basis of a one month
Interest Period.
(d) Upon receipt of an Irrevocable Notice of Syndicated Activity
under Section 2.4(b), the Agent will promptly notify each Bank of its receipt
of such Irrevocable Notice of Syndicated Activity, or, if no notice is provided
by the applicable Company, the Agent will promptly notify each Bank of the
details of any automatic conversion. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Syndicated Loans with respect to which the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise consent, (i) during the
continuance of a Default a Company may not elect to have a Syndicated Loan
converted into or continued as an
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<PAGE> 50
Offshore Rate Loan having an Interest Period longer than one month and (ii)
during the continuance of an Event of Default, a Company may not elect to have
a Syndicated Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Syndicated Loans, unless the Agent shall otherwise consent, there may not be
more than fifteen different Interest Periods in effect for all Syndicated Loans
and Bid Loans.
2.5 Utilization of Revolving Commitments and Term Loan Commitments
in Offshore Currencies. (a) The Agent (or with respect to International Swing
Line Loans under clause (ii) of this Section 2.5(a), the applicable
International Swing Line Bank) will determine the Dollar Equivalent Amount with
respect to any (i) Syndicated Borrowing comprised of Offshore Currency Loans or
L/C Obligations in Offshore Currencies as of a date two Business Days prior to
the requested Borrowing Date or Issuance Date, respectively, (ii) International
Swing Line Loans and International Swing Line Outstandings at the times
specified in Section 2.20, (iii) all Offshore Currency Loans and L/C
Obligations in Offshore Currencies then outstanding as at the last Business Day
of each calendar quarter, and (iv) outstanding Offshore Currency Loans as of
any date of redenomination of a Loan in an Applicable Currency into another
Applicable Currency or Dollars pursuant to Section 2.5(d) or Section 4.5 (each
such date under clauses (i) through (iv) a "Valuation Date"). The Agent shall
furnish to each Bank the results of each determination made under clause (iii)
of the immediately preceding sentence.
(b) The Companies shall be entitled to request that Syndicated
Loans hereunder also be permitted to be made in any other lawful currency
constituting a eurocurrency (other than Dollars), in addition to the
eurocurrencies specified in the definition of "Offshore Currency" herein, that
is approved by all of the Banks and the Agent, and that in the opinion of the
Banks and the Agent is at such time freely traded in the offshore interbank
foreign exchange markets and is freely transferable and freely convertible into
Dollars (an "Agreed Alternate Currency"). Each Company shall deliver to the
Agent any request for designation of an Agreed Alternate Currency in accordance
with Section 11.2, to be received by the Agent not later than 11:00 a.m.
(Charlotte time) at least two Business Days in advance of the date of any
Irrevocable Notice of Syndicated Activity hereunder proposed to be made in such
Agreed Alternate Currency. Upon receipt of any such request the Agent will
promptly notify the Banks thereof, and each Bank shall respond to such request
within one Business Day of receipt thereof. Each Bank may grant or accept such
request in its sole discretion. The Agent shall promptly notify the Companies
of the acceptance or rejection of any such request. The acceptance of any such
request may be conditioned, at the discretion of the Agent, upon such
amendments to the procedures for borrowing with respect to such Agreed
Alternate Currency as the Agent may require. If such request is accepted, then
the Agreed Alternate Currency shall be deemed to be an "Applicable Currency"
for all purposes hereunder.
(c) The Companies shall be entitled to request an Interest Period
for a Syndicated Borrowing, a continuation or a conversion for a period other
than one, two, three or six months by giving notice at least two Business Days
before the time otherwise required for notice of such
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<PAGE> 51
a Syndicated Borrowing, continuation or conversion. The Agent shall promptly
notify the Banks of such request and the Banks shall promptly notify the Agent
by 12:00 noon (Charlotte time) the following Business Day whether they agree to
such Interest Period. The Agent shall notify the Companies whether the Banks so
agree within one Business Day after the Companies' request and, if all the
Banks have agreed, the requested Interest Period shall be applicable.
(d) Notwithstanding anything herein to the contrary, (i) during
the continuance of a Default, all or any part of any outstanding Offshore
Currency Loans shall be, at the option of the Companies, continued at the end
of the existing Interest Period as Offshore Rate Loans in the same currency
having an Interest Period of one month or redenominated and converted into Base
Rate Loans in Dollars at the end of the existing Interest Period, and (ii)
during the continuance of an Event of Default, all or any part of any
outstanding Offshore Currency Loans shall be redenominated and converted into
Base Rate Loans in Dollars at the end of the existing Interest Period. The
Agent shall promptly notify each Company and each Bank of any such
redenomination and conversion.
2.6 Bid Borrowings. In addition to Syndicated Borrowings pursuant
to Section 2.3, each Bank severally agrees that the Companies may, as set forth
in Section 2.7, from time to time request the Banks prior to the Termination
Date to submit offers to make Bid Loans to the Companies; provided, however,
that the Banks may, but shall have no obligation to, submit such offers and the
Companies may, but shall have no obligation to, accept any such offers, and any
Bank may designate one Designated Bidder to make such offers from time to time
and, if such offers are accepted by the Companies, to make such Bid Loans; and
provided, further, that at no time shall (a) the outstanding aggregate
principal amount of all Bid Loans, plus the outstanding aggregate principal
amount of all Revolving Loans, plus the outstanding Sublimit L/C Obligations,
plus the Swing Line Outstandings, exceed the combined Revolving Commitments; or
(b) the outstanding aggregate principal amount of all Bid Loans exceed
$300,000,000. All Bid Loans shall be in Dollars for settlement in the United
States. The Agent shall notify each Bank not less frequently than quarterly of
the amount of Bid Loans outstanding based on information provided to it from
the Bid Agent.
2.7 Procedure for Bid Borrowings.
(a) When the Companies wish to request the Banks to submit offers
to make Bid Loans hereunder, they shall transmit to the Bid Agent by telephone
call followed promptly by facsimile transmission a notice with a copy to the
Agent in substantially the form of Exhibit I (a "Competitive Bid Request") so
as to be received no later than 11:00 a.m. (Charlotte time) two Business Days
prior to the date of a proposed Bid Borrowing, specifying:
(i) the date of such Bid Borrowing, which shall be a
Business Day;
(ii) the aggregate amount of such Bid Borrowing, which
shall be a minimum amount of $4,000,000 or in multiples of $1,000,000
in excess thereof; and
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(iii) the duration of each Interest Period applicable
thereto, subject to the provisions of the definition of "Interest
Period" herein.
The Companies may not request or invite Competitive Bids for more than
three Interest Periods in a single Competitive Bid Request and may not request
Competitive Bids more than twice in any period of five consecutive Business
Days.
(b) Upon receipt of a Competitive Bid Request, the Agent will
determine the availability of Bid Borrowings under Section 2.6 and the Bid
Agent will promptly send to the Banks and Designated Bidders by facsimile
transmission an Invitation for Competitive Bids with a copy to the Agent. Each
Invitation for Competitive Bids transmitted by the Bid Agent shall constitute
an invitation by the Companies to each Bank and Designated Bidder to submit
Competitive Bids offering to make the Bid Loans to which such Competitive Bid
Request relates in accordance with this Section 2.7.
(c) (i) Each Bank and Designated Bidder may at its
discretion submit a Competitive Bid containing an offer or offers to make Bid
Loans in response to any Invitation for Competitive Bids. Each Competitive Bid
must comply with the requirements of this Section 2.7(c) and must be submitted
to the Bid Agent by facsimile transmission not later than 10:00 a.m. (Charlotte
time) on the proposed Borrowing Date; provided that, if the Agent is then the
Bid Agent, Competitive Bids submitted by the Agent (or any Affiliate of the
Agent) in the capacity of a Bank or a Designated Bidder must be submitted not
later than 9:45 a.m. (Charlotte time) on the proposed Borrowing Date, and the
Agent shall notify the Company thereof promptly.
(ii) Each Competitive Bid shall be in substantially the
form of Exhibit J, specifying therein:
(A) the proposed Borrowing Date;
(B) the principal amount of each Bid Loan for
which such Competitive Bid is being made, which principal
amount (x) may be equal to or less than $300,000,000, (y) must
be $1,000,000 or in multiples of $500,000 in excess thereof,
and (z) may not exceed the aggregate principal amount of Bid
Loans for which Competitive Bids were requested;
(C) the Interest Period;
(D) the rate of interest per annum (rounded
upward to the next 1/1000th of 1%) (the "Absolute Rate")
offered for each Bid Loan; and
(E) the identity of the quoting Bank or
Designated Bidder.
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A Competitive Bid may contain up to three separate offers by the
quoting Bank or Designated Bidder with respect to each Interest Period
specified in the related Invitation for Competitive Bids.
(iii) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity
with Exhibit J or does not specify all of the
information required by subsection (c)(ii) of this
Section;
(B) contains qualifying, conditional or
similar language;
(C) proposes terms other than or in
addition to those set forth in the applicable
Invitation for Competitive Bids; or
(D) arrives after the time set forth in
Section 2.7(c)(i).
(iv) Notwithstanding anything to the contrary contained
in this Section 2.7(c), a Competitive Bid by a Bank may contain, and
will not be disregarded if it does contain, a restriction on the use
of proceeds thereof related to such Bank's subsidiary exercising
powers related to securities; provided that the Companies shall
disregard such Competitive Bid unless the Companies agree to be bound
by such restriction (which agreement shall be manifested by accepting
such Competitive Bid).
(d) Promptly on receipt, but not later than 10:30 a.m. (Charlotte
time) on the proposed Borrowing Date, the Bid Agent shall notify the Companies
of the terms of any Competitive Bid submitted by a Bank or Designated Bidder
that is in accordance with Section 2.7(c) or, if no Competitive Bids have been
submitted, the absence of any Competitive Bids. Subject only to the provisions
of Section 5.3, any Competitive Bid shall be irrevocable.
(e) Not later than 11:00 a.m. (Charlotte time) on the proposed
Borrowing Date, the Companies shall notify the Agent of their acceptance or
non-acceptance of the Competitive Bids of which they have received notice
pursuant to Section 2.7(d) or which have been sent to them pursuant to Section
2.7(c). The Companies shall be under no obligation to accept any Competitive
Bid and may choose to reject all or, subject to the remaining provisions of
this paragraph (e), one or more, Competitive Bids. In the case of acceptance,
such notice shall specify the Bid Loan lenders and their respective principal
amounts and the aggregate amount of Competitive Bids for each Interest Period
that are accepted. The Companies may accept any Competitive Bid in whole or in
part; provided that:
(i) the aggregate principal amount of each Bid
Borrowing may not exceed the applicable amount set forth in the
related Competitive Bid Request;
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(ii) the principal amount of each Bid Borrowing must be
$1,000,000 or in any multiple of $500,000 in excess thereof;
(iii) acceptance of Competitive Bids may only be made on
the basis of ascending Absolute Rates within each Interest Period, as
the case may be; and
(iv) the Companies may not accept any Competitive Bid
that is described in Section 2.7(c)(iii) (other than to the extent
permitted pursuant to Section 2.7(c)(iv)) or that otherwise fails to
comply with the requirements of this Agreement.
The Bid Agent shall give the information contained in Section 2.7(d) to the
Agent for all Competitive Bids accepted.
(f) If Competitive Bids are made by two or more Banks or
Designated Bidders with the same Absolute Rates for a greater aggregate
principal amount than the amount in respect of which such Competitive Bids are
permitted to be accepted for the related Interest Period, the principal amount
of Bid Loans in respect of which such Competitive Bids are accepted shall be
allocated by the Bid Agent among such Banks or Designated Bidders in proportion
to the aggregate principal amounts of such Competitive Bids. Determination by
the Bid Agent of the amounts of Bid Loans shall be conclusive in the absence of
manifest error.
(g) (i) The Bid Agent will promptly notify each Bank or
Designated Bidder having submitted a Competitive Bid if its Competitive Bid has
been accepted or not and, if its offer has been accepted, of the amount of the
Bid Loan or Bid Loans to be made on the date of the Bid Borrowing together with
the Absolute Rate or Rates and the Interest Period or the Interest Periods with
respect thereto.
(ii) Each Bank or Designated Bidder which has received
notice pursuant to Section 2.7(g)(i) that its Competitive Bid has been
accepted shall, subject to the satisfaction of all conditions
precedent, make the amounts of such Bid Loans available to the Bid
Agent for the account of the Companies by 2:00 p.m. (Charlotte time)
on the Borrowing Date.
(iii) Promptly following each Bid Borrowing, the Bid
Agent shall notify each Bank, each Designated Bidder and the Agent, if
the Companies act as Bid Agent, of the ranges of Competitive Bids
submitted and the highest and lowest Absolute Rates accepted for each
Interest Period requested by the Companies and the aggregate amount
borrowed pursuant to such Bid Borrowing.
(iv) From time to time, the Companies and the Banks and
the Designated Bidders shall furnish such information to the Bid Agent
as the Bid Agent may request relating to the making of Bid Loans,
including the amounts, Absolute Rates, Borrowing Dates and maturities
thereof, for purposes of the allocation of amounts received from the
Companies for payment of all amounts owing hereunder.
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2.8 Voluntary Termination or Reduction of Revolving Commitments.
The Companies, acting jointly, may, upon not less than five Business Days'
prior notice to the Agent, permanently terminate the Revolving Commitments, or
permanently reduce the Revolving Commitments by (a) an aggregate minimum Dollar
Equivalent Amount of $5,000,000 or any Dollar Equivalent Amount multiple of
$1,000,000 in excess thereof or (b) such other amount as represents the entire
unused amount of Revolving Commitments; unless, after giving effect thereto and
to any prepayments of Revolving Loans made on the effective date thereof, (a)
the Dollar Equivalent Amount of the principal amount of the Revolving Loans,
Bid Loans and Swing Line Outstandings, and the Dollar Equivalent Amount of the
Effective Amount of Sublimit L/C Obligations then outstanding would exceed the
amount of the combined Revolving Commitments then in effect, or (b) the Dollar
Equivalent Amount of the Effective Amount of all Sublimit L/C Obligations then
outstanding would exceed the Sublimit L/C Commitment. Once reduced in
accordance with this Section, the Revolving Commitments may not be increased.
Any reduction of the Revolving Commitments shall be applied to each Bank
according to its Pro Rata Share. All accrued commitment fees to, but not
including, the effective date of any reduction or termination of Revolving
Commitments, shall be paid on the effective date of such reduction or
termination. The Agent shall promptly notify each Bank of the Agent's receipt
of and the contents of any notice received by it pursuant to this Section 2.8.
2.9 Optional and Mandatory Prepayments; Mandatory Reductions of
Commitments. (a) Subject to Section 4.4, each Company may, at any time or from
time to time, upon notice to the Agent, ratably prepay Syndicated Loans or L/C
Borrowings in whole or in part, in the Minimum Tranche. The Company prepaying
such Loans shall deliver a notice of prepayment to be received by the Agent not
later than 11:00 a.m. (Charlotte time) (i) at least three Business Days in
advance of the prepayment date if the Syndicated Loans to be prepaid are
Offshore Rate Loans, (ii) at least one Business Day in advance of the
prepayment date if the Loans to be prepaid are Base Rate Loans, if settlement
is to be made outside the United States, and (iii) on the prepayment date if
the Syndicated Loans or L/C Borrowings to be prepaid are Base Rate Loans, if
settlement is to be made in the United States. Such notice of prepayment shall
specify the date and amount of such prepayment and the Type(s) of Syndicated
Loans or L/C Borrowings and the Applicable Currency to be prepaid. Such notice
shall not thereafter be revocable by the Companies and the Agent will promptly
notify each Bank of its receipt of any such notice, and of such Bank's Pro Rata
Share of such prepayment. If such notice is given by a Company, such Company
shall make such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein, together with accrued
interest to each such date on the amount prepaid and any amounts required
pursuant to Section 4.4.
(b) Bid Loans may not be voluntarily prepaid, except with the
consent of the Bank holding the applicable Bid Loan and upon payment of any
additional costs associated with such prepayment, such costs to be determined
by the Bank making such Bid Loan.
(c) The Companies shall repay the Term Loans in quarterly
installments on the dates and in the amounts set forth on Schedule V; provided,
however, in the event that on any such payment date the aggregate amount of
Term Loans outstanding shall be less than the amount of
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the payment required to be made on such date, then the Companies shall in
addition cause FIP L/C Obligations to be permanently reduced as of such date so
that after giving effect to such Term Loan payments and reductions of FIP L/C
Obligations the Dollar Equivalent Amount of the aggregate principal amount of
Term Loan Outstandings shall not exceed the aggregate Term Loan Commitments, as
reduced in accordance with Section 2.9(g).
(d) Unless an Override Event shall have theretofore occurred, the
aggregate amount of Revolving Commitments shall be permanently reduced by (and
the Revolving Commitment of each Bank shall be correspondingly permanently
reduced by its Pro Rata Share of) 100% of the maximum amount at any time
outstanding (including each increase from the largest such amount theretofore
outstanding) under each Permitted Receivables Securitization, such reduction to
be effective thirty (30) Business Days following the date of availability of
such Net Issuance Proceeds relating to such Permitted Receivables
Securitization (the "Reduction Date"); on or before the Reduction Date, (i) a
Responsible Officer of Danka PLC shall provide to the Agent a certificate
setting forth in reasonable detail the calculations utilized in computing the
amount of such reduction, and (ii) the Companies shall cause Revolving Loan
Outstandings to be repaid or otherwise permanently reduced so that as of the
Reduction Date the Dollar Equivalent Amount of the aggregate principal amount
of Revolving Loan Outstandings shall not exceed the aggregate Revolving
Commitments after giving effect to such reduction.
(e) Substantially simultaneously with the issuance of any FIPs,
the Companies shall cause Term Loans then outstanding to be repaid in an
aggregate principal amount equal to (i) if such FIPs shall be supported by one
or more FIP L/Cs, the maximum stated amount of the FIP L/Cs issued to support
such FIPs and (ii) otherwise, in the amount of 100% of the net cash proceeds
resulting from such issuance; provided that payments under this Section 2.9(e)
shall not reduce the Term Loan Commitment of any Bank.
(f) In addition to the required payments described in Sections
2.9(c), (d) and (e) the Companies shall make the following mandatory
prepayments or reductions of the Obligations, each such payment to be made to
the Agent for the benefit of the Banks within the time period specified below:
(i) unless an Override Event shall have theretofore
occurred, the Companies shall prepay or otherwise permanently reduce
Term Loan Outstandings by application to the Ratable Reduction of Term
Loans of an amount equal to 50% of Net Proceeds in excess of the first
$50,000,000 of Net Proceeds (cumulatively from the Closing Date), and
if such Net Proceeds to be applied to Term Loan Outstandings shall be
greater than the Dollar Equivalent Amount of Term Loan Outstandings,
then the aggregate amount of Revolving Commitments shall be reduced by
(and the Revolving Commitment of each Bank shall be correspondingly
reduced by its Pro Rata Share of) the amount of such excess, and the
Companies shall cause Revolving Loan Outstandings to be repaid or
otherwise permanently reduced so that after giving effect to such
reduction the Dollar Equivalent Amount of Revolving Loan Outstandings
shall not exceed the Revolving Commitments; each such prepayment or
other reduction to be made within 30 days of
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receipt of such proceeds; a Company shall give not less than five (5)
Business Days written notice to the Agent of such prepayment, which
notice shall include a certificate of a Responsible Officer of Danka
PLC setting forth in reasonable detail the calculations utilized in
computing the amount of such prepayment or other reduction; and
(ii) unless an Override Period shall then be in effect,
the Companies shall make prepayments of the Term Loans by application
to the Ratable Reduction of Term Loans of an amount equal to 100% of
the Net Issuance Proceeds (other than Net Issuance Proceeds arising
from Permitted Receivables Securitizations) in connection with any
issuance of Indebtedness consummated other than during an Override
Period, each such prepayment to be made within the time and in the
manner set forth in clause (i) of this Section 2.9(f).
(g) The amount of any required installment payment or prepayment
or permanent reduction of Term Loans or Term Loan Outstandings pursuant to
Section 2.9(c) or (f) shall permanently reduce the Term Loan Commitments. In
the event that the amount of any Net Proceeds which are required to be applied
to prepayment or reduction of Revolving Loan Outstandings exceeds the Dollar
Equivalent Amount of the amount of then outstanding Revolving Loans, such
excess amount shall be retained by the Companies.
(h) Any prepayment under this Section 2.9 shall be made together
with any amounts required to be paid in connection with such prepayment under
Section 4.4.
2.10 [reserved]
2.11 Currency Exchange Fluctuations. (a) If on any Valuation Date
the Agent shall have determined that the aggregate Dollar Equivalent Amount of
the principal amount of all Term Loans and of the Effective Amount of all FIP
L/C Obligations then outstanding exceeds the combined Term Loan Commitments of
the Banks, due to a change in applicable rates of exchange between Dollars and
Offshore Currencies, then (A) the Agent shall give notice to each Company and
each Bank that a Currency Hedge Utilization is in effect in an amount equal to
such excess, and from such Valuation Date to the next succeeding Valuation
Date, at which succeeding Valuation Date (and each subsequent Valuation Date)
the Currency Hedge Utilization shall (with prompt notice thereof by the Agent
to each of the Companies and the Banks) be maintained, increased or decreased
based upon the then most recent valuations then in effect conducted in
accordance with Section 2.5, and (B) if on any date the Dollar Equivalent
Amount of Revolving Loan Outstandings plus the Currency Hedge Utilization then
in effect shall exceed the combined Revolving Commitments, then upon notice
thereof by the Agent to each Company, each Company agrees thereupon to make
prepayments, on the Business Day after notice from the Agent, of Revolving
Loans (and if necessary, Cash Collateralize outstanding Letters of Credit) such
that, after giving effect to such prepayment or Cash Collateralization, the
aggregate Dollar Equivalent Amount of all Revolving Loan Outstandings (net of
any Cash Collateralization) does not exceed the combined Revolving
Commitments minus the Currency Hedge Utilization then in effect, it being
understood that a prepayment in the amount by which the Dollar Equivalent
Amount of Revolving Loan
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Outstandings exceeds the combined Revolving Commitments minus the Currency
Hedge Utilization then in effect need not equal or exceed the Minimum Tranche.
Any prepayment under this Section shall be made together with any amounts
required pursuant to Section 4.4.
(b) Without limiting the foregoing provisions of this Section 2.11,
in the event that the Agent shall determine (in accordance with the valuation
procedures provided for in Section 2.5) at any time that the aggregate Dollar
Equivalent Amount of all Revolving Loan Outstandings and Term Loan Outstandings
in Offshore Currencies plus all International Swing Line Outstandings (which
shall be deemed to be outstanding in the Dollar Equivalent Amount of
$75,000,000) shall exceed the Total Offshore Currency Sublimit by an amount in
excess of $5,000,000, then, upon notice thereof by the Agent to each Company,
each Company agrees thereupon to make prepayments, on not later than the third
Business Day after notice from the Agent, of Revolving Loan Outstandings and
Term Loan Outstandings (and if necessary, Cash Collateralize outstanding
Letters of Credit) such that, after giving effect to such prepayment or Cash
Collateralization, the aggregate Dollar Equivalent Amount of all Revolving Loan
Outstandings and Term Loan Outstandings (net of any Cash Collateralization) in
Offshore Currencies plus all International Swing Line Outstandings (which shall
be deemed to be outstanding in the Dollar Equivalent Amount of $75,000,000)
does not exceed the Total Offshore Currency Sublimit, it being understood that
(a) a prepayment in the amount by which the Dollar Equivalent Amount of
Revolving Loan Outstandings in Offshore Currencies and Term Loan Outstandings
in Offshore Currencies exceeds the Total Offshore Currency Sublimit need not
equal or exceed the Minimum Tranche, and (b) no such prepayment shall be
required unless the excess referred to above shall exceed $5,000,000. Any
prepayment under this Section shall be made together with any amounts required
pursuant to Section 4.4.
2.12 Repayment. (a) The Companies shall repay to the Banks on the
Termination Date the aggregate principal amount of Loans outstanding on such
date.
(b) The Companies shall repay each Bid Loan on the last day of the
relevant Interest Period.
(c) Each payment (x) required to be made pursuant to Section 2.9
which permanently reduces the Term Loan Commitments or the Revolving
Commitments or (y) required to be made under clause (a) of this Section 2.12
shall, if made in an Offshore Currency, be accompanied by such additional
amounts of such Offshore Currency, or additional Dollars, such that the amount
of such Offshore Currency and Dollars so paid shall in the aggregate equal the
Dollar Equivalent Amount (determined as of such date) of the payment required
to be paid on such date (and if a Currency Hedge Utilization shall then be in
effect, the Agent shall adjust, as appropriate, the amount of such Currency
Hedge Utilization as if such payment date were a Valuation Date).
2.13 Interest.
(a) Each Syndicated Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Offshore Rate or the Base Rate, as the case may be (and subject to
the Companies' right to convert to other Types of
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Loans under Section 2.4), plus the Applicable Margin. Each Bid Loan shall bear
interest on the outstanding principal amount thereof from the relevant
Borrowing Date to the last day of the applicable Interest Period at a rate per
annum equal to the Absolute Rate.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Loans under Section 2.9 or 2.11 for the portion of the Loans so
prepaid and upon payment (including prepayment) in full thereof and, during the
existence of any Event of Default, interest shall be paid on demand of the
Agent at the request or with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, while any
Event of Default exists or after acceleration, interest shall accrue (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all outstanding Obligations, at a rate per annum which is
determined by adding 2% per annum to the Applicable Margin then in effect for
such Loans and, in the case of Obligations not subject to an Applicable Margin,
at a rate per annum equal to the Base Rate (or in the case of Bid Loans, the
Absolute Rate) plus 2%.
(d) Anything herein to the contrary notwithstanding, the
obligations of the Companies to any Bank or Designated Bidder hereunder shall
be subject to the limitation that payments of interest shall not be required
for any period for which interest is computed hereunder, to the extent (but
only to the extent) that contracting for or receiving such payment by such Bank
or Designated Bidder would be contrary to the provisions of any law applicable
to such Bank or Designated Bidder limiting the highest rate of interest that
may be lawfully contracted for, charged or received by such Bank or Designated
Bidder, and in such event the Companies shall pay such Bank interest at the
highest rate permitted by applicable law.
2.14 Fees.
(a) Arrangement and Agency Fees. The Companies jointly and
severally shall pay the fees to the Arranger, NationsBank and the Agent, as
required by the letter agreements ("Fee Letters") between each Company and the
Arranger and the Agent (or an affiliate of the Agent) each dated August 27,
1996, as amended or supplemented from time to time, or as may otherwise be
agreed to in a separate writing or writings executed by the Companies.
(b) Commitment Fees. The Companies jointly and severally shall
pay to the Agent for the account of each Bank a commitment fee on the sum of
(i) the average daily unused portion of such Bank's Revolving Commitment plus
(ii) such Bank's International Swing Line Commitment, computed on a quarterly
basis in arrears on the last Business Day of each calendar quarter based upon
the daily utilization of the Revolving Commitment by Revolving Loans for that
quarter as calculated by the Agent, equal to the Applicable Fee Percentage.
For each Bank, the amounts outstanding under Bid Loans made by such Bank (and
its Designated Bidder) plus its Pro Rata Share of the Dollar Equivalent Amount
of the Effective Amount of all Sublimit L/C Obligations will also be subtracted
from such Bank's Commitment in making the calculation of its commitment fee but
in no event shall the commitment fee be less than zero for any period. Swing
Line Loans
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and International Swing Line Loans shall not be deemed to be outstanding for
purposes of calculating fees under this Section 2.14. Such commitment fee
shall accrue from the date hereof to the Termination Date and shall be due and
payable quarterly in arrears on the first Business Day of each January, April,
July and October commencing on January 1, 1997 for the quarter (or shorter
period, as applicable) ending the prior Business Day and on the Termination
Date; provided that, in connection with any reduction or termination of
Commitments under Section 2.8, the accrued commitment fee calculated for the
period ending on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly payment
date. The commitment fees provided in this subsection shall accrue at all
times after the above-mentioned commencement date, including at any time during
which one or more conditions in Article V are not met.
2.15 Computation of Fees and Interest.
(a) All computations of interest for Base Rate Loans when the Base
Rate is determined by NationsBank's "prime rate" and for Offshore Currency
Loans in British pounds sterling or Belgian francs shall be made on the basis
of a year of 365 or 366 days, as the case may be, and actual days elapsed. All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed. Interest and fees shall accrue during each
period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) For purposes of determining utilization of each Bank's
Commitment in order to calculate the commitment fee due under Section 2.14(b),
the amount of any outstanding Offshore Currency Loan on any date shall be
determined based upon the Dollar Equivalent Amount as of the most recent
Valuation Date with respect to such Offshore Currency Loan and Sublimit L/C
Obligations.
(c) Each determination of an interest rate or a Dollar Equivalent
Amount by the Agent shall be conclusive and binding on each Company, the Banks
and the Designated Bidders in the absence of manifest error.
(d) The Applicable Margin and the Applicable Fee Percentage shall
be adjusted, to the extent applicable, 60 days (or, in the case of the last
calendar quarter of any year, 120 days) after the end of each calendar quarter,
based on the Consolidated Total Leverage Ratio as of the last day of such
calendar quarter; it being understood that if Danka PLC fails to deliver the
financial statements required by Section 7.1(a) or 7.1(b), as applicable, and
the related Compliance Certificate required by Section 7.1(c), by the 60th day
(or, if applicable, the 120th day) after any calendar quarter, the Applicable
Margin shall be 1.00% and the Applicable Fee Percentage shall be .30% until
such financial statements and Compliance Certificate are delivered. The
Applicable Margin shall be 0.60% and the Applicable Fee Percentage shall be
0.20% until the Business Day next following the date of receipt by the Agent of
the Compliance Certificate and related financial statements of Danka PLC and
its Subsidiaries for the fiscal quarter ending June 30, 1997.
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2.16 Payments by the Companies.
(a) Except as otherwise expressly provided herein, all payments by
any Company shall be made to the Agent for the account of the Banks and the
Designated Bidders, or the Agent, as the case may be, at the Agent's Payment
Office; and with respect to the principal of, interest on, and any other
amounts relating to, any Offshore Currency Loan, shall be made to the Agent in
the Offshore Currency in which such Loan is denominated or payable, and, with
respect to all other amounts payable hereunder, shall be made in Dollars.
Notwithstanding the foregoing, prior to the occurrence and continuation of an
Event of Default, all payments on the Bid Loans (unless the Agent is the Bid
Agent) shall be made directly to the lending Bank or Designated Bidder with
respect thereto. Such payments shall be made in Same Day Funds, and (i) in the
case of Offshore Currency payments, no later than such time on the dates
specified herein as may be determined by the Agent to be necessary for such
payment to be credited on such date in accordance with normal banking
procedures in the place of payment, and (ii) in the case of any Dollar
payments, no later than 2:00 p.m. (Charlotte time) on the date specified
herein. The Agent will promptly distribute to each Bank and Designated Bidder
its Pro Rata Share (or other applicable share as expressly provided herein) of
such amounts, in like funds as received. Any payment which is received by the
Agent later than 2:00 p.m. (Charlotte time), or later than the time specified
by the Agent as provided in clause (i) above (in the case of Offshore Currency
payments), shall be deemed to have been received on the following Business Day
and any applicable interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
(c) Unless the Agent receives notice from a Company prior to the
date on which any payment is due to the Banks that such Company will not make
such payment in full as and when required, the Agent may assume that such
Company has made such payment in full to the Agent on such date in Same Day
Funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank or Designated Bidder on such due date an
amount equal to the amount then due such Bank or Designated Bidder. If and to
the extent a Company has not made such payment in full to the Agent, each Bank
or Designated Bidder shall repay to the Agent on demand such amount distributed
to such Bank or Designated Bidder, together with interest thereon at the
Federal Funds Rate or, in the case of a payment in an Offshore Currency, the
Overnight Rate as determined by the Agent and specified to such Bank for
amounts in such Offshore Currency, for each day from the date such amount is
distributed to such Bank or Designated Bidder until the date repaid.
2.17 Payments by the Banks to the Agent.
(a) Unless the Agent receives notice from a Bank on or prior to
the Effective Date or, with respect to any Syndicated Borrowing, after the
Effective Date, at least two Business Days
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prior to the date of such Borrowing, that such Bank will not make available as
and when required hereunder to the Agent for the account of the applicable
Company the amount of that Bank's Pro Rata Share of such Syndicated Borrowing,
the Agent may assume that each Bank has made such amount available to the Agent
in Same Day Funds on such Borrowing Date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to such Company on
such date a corresponding amount. If and to the extent any Bank shall not have
made its full amount available to the Agent in Same Day Funds and the Agent in
such circumstances has made available to the applicable Company such amount,
that Bank shall on the Business Day following such Borrowing Date make such
amount available to the Agent, together with interest at the Federal Funds Rate
or, in the case of any Syndicated Borrowing consisting of Offshore Currency
Loans, the Overnight Rate specified to such Bank for amounts in such Offshore
Currency plus any administrative fee charged by the Agent. A notice of the
Agent submitted to any Bank with respect to amounts owing under this Section
2.17(a) shall be conclusive, absent manifest error. If such amount is so made
available, such payment to the Agent shall constitute such Bank's Loan on the
applicable Borrowing Date for all purposes of this Agreement. If such amount
is not made available to the Agent on the Business Day following the applicable
Borrowing Date, the Agent will notify each Company of such failure to fund and,
upon demand by the Agent, the Companies shall pay such amount to the Agent for
the Agent's account, together with interest thereon for each day elapsed since
the date of such Syndicated Borrowing, at a rate per annum equal to the
interest rate applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Syndicated Loan on any
Borrowing Date shall not relieve any other Bank of any obligation hereunder to
make a Syndicated Loan on such Borrowing Date, but neither the Agent nor any
Bank shall be responsible for the failure of any other Bank to make the Loan to
be made by such other Bank on any Borrowing Date.
2.18 Sharing of Payments Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Syndicated Loans made
by it any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Syndicated Loans made by them as shall be necessary to cause such purchasing
Bank to share the excess payment pro rata with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
the purchasing Bank, such purchase shall to that extent be rescinded and each
other Bank shall repay to the purchasing Bank the purchase price paid therefor,
together with an amount equal to such paying Bank's ratable share (according to
the proportion of (i) the amount of such paying Bank's required repayment to
(ii) the total amount so recovered from the purchasing Bank) of any interest or
other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. Each Company agrees that any Bank so purchasing a
participation from another Bank may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 11.9) with respect to such participation as fully as if such Bank
were the direct creditor of such Company in the amount of such participation.
The Agent will keep records (which shall be conclusive and binding in the
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absence of manifest error) of participations purchased under this Section and
will in each case notify the Banks following any such purchases or repayments.
2.19 Swing Line. (a) Notwithstanding any other provision of this
Agreement to the contrary, in order to administer the Revolving Commitments in
an efficient manner and to minimize the transfer of funds between the Agent and
each Bank, NationsBank shall make available Swing Line Loans in Dollars to each
of the Companies, jointly and severally, from the Effective Date to the
Termination Date (or such earlier date as the Revolving Commitments of all
Banks shall have terminated in accordance with the terms hereof). NationsBank
shall not make any Swing Line Loan pursuant hereto (i) if to the actual
knowledge of NationsBank the Companies are not in compliance with all the
conditions to the making of Revolving Loans set forth in this Agreement, (ii)
if after giving effect to such Swing Line Loan, the Swing Line Outstandings
would exceed $25,000,000, or (iii) if after giving effect to such Swing Line
Loan, to the actual knowledge of NationsBank the Dollar Equivalent Amount of
Revolving Loan Outstandings would exceed the aggregate Revolving Commitments.
The Companies may borrow, repay and reborrow under this Section 2.19. Unless
notified to the contrary by NationsBank, borrowings under the Swing Line shall
be made in integral multiples of $100,000, upon written request by
telefacsimile transmission, effective upon receipt, by a Responsible Officer
made to NationsBank not later than 3:00 P.M. on the Business Day of the
requested borrowing. Each such Swing Line Borrowing Notice shall specify the
amount of the borrowing and the date of borrowing, and shall be in the form of
Exhibit L, with appropriate insertions. Unless notified to the contrary by
NationsBank, each repayment of a Swing Line Loan shall be in an amount which is
an integral multiple of $100,000 or the aggregate amount of all Swing Line
Outstandings. If any Company instructs NationsBank to debit any demand deposit
account of such Company in the amount of any payment with respect to a Swing
Line Loan, or NationsBank otherwise receives repayment, after 3:00 P.M. on a
Business Day, such payment shall be deemed received on the next Business Day.
(b) Swing Line Loans shall bear interest at the Base Rate or at such
other rate or rates as the applicable Company and NationsBank may agree from
time to time, the interest payable on Swing Line Loans is solely for the
account of NationsBank, and all accrued and unpaid interest on Swing Line Loans
shall be payable on the dates and in the manner provided in this Article II
with respect to interest on Base Rate Loans (except as NationsBank and the
applicable Company may otherwise agree in connection with any particular Swing
Line Loan). The Swing Line Loans shall be evidenced by the Swing Line Note.
(c) Upon the making of a Swing Line Loan in accordance with this
Section 2.19, each Bank shall be deemed to have purchased from NationsBank a
Swing Line Participation therein in an amount equal to that Bank's Pro Rata
Share of such Swing Line Loan. For purposes of Section 2.1(a), each Swing Line
Loan shall be deemed to utilize the Revolving Commitment of each Bank by an
amount equal to its Pro Rata Share of such Loan. Upon demand made by
NationsBank, each Bank shall, according to its Pro Rata Share of such Swing
Line Loan, promptly provide to NationsBank its purchase price therefor in an
amount equal to its Swing Line Participation and, upon any such demand by
NationsBank, such Swing Line Loan shall without further action be converted to
a Base Rate Loan. Any such payment made by a Bank pursuant to demand of
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NationsBank of the purchase price of its Swing Line Participation shall be
deemed (i) provided that the conditions to making Revolving Loans shall be
satisfied, a Base Rate Loan under Section 2.1(a) until the Companies convert
such Base Rate Loan in accordance with the terms of Section 2.4, and (ii) in
all other cases, the funding by each Bank of the purchase price of its Swing
Line Participation in such Swing Line Loan. The obligation of each Bank to so
provide its purchase price to NationsBank shall be absolute and unconditional
and shall not be affected by the occurrence of a Default or Event of Default or
any other occurrence or event. Upon (and only upon) receipt by NationsBank of
funds from the Companies in repayment of principal of or interest on Swing Line
Loans with respect to which any Bank has funded the purchase of its
participation in accordance with clause (ii) of the fourth sentence of Section
2.19(c), NationsBank will promptly pay over to the Agent (in the kind of funds
so received or applied) for the account of each such Bank (other than
NationsBank) in accordance with their Pro Rata Shares the aggregate amount of
such payment as shall equal the aggregate amount of the Pro Rata Shares of such
payment of each such Bank (other than NationsBank).
The Companies, at their option and subject to the terms hereof, may
request a Revolving Borrowing pursuant to and of a denomination permitted
under Section 2.1(a) in an amount sufficient to repay Swing Line Outstandings
on any date and the Agent shall provide from the proceeds of such Borrowing to
NationsBank the amount necessary to repay such Swing Line Outstandings (which
NationsBank shall then apply to such repayment) and credit any balance of such
Borrowing in immediately available funds in the manner directed by the
Companies. The Swing Line shall continue in effect until the Termination Date
(or such earlier date as the Revolving Commitments of all Banks shall have
terminated in accordance with the terms hereof), at which time all Swing Line
Outstandings and accrued interest thereon shall be due and payable in full.
2.20 International Swing Line. (a) Subject to the terms and upon
the conditions specified in the International Swing Line Agreements, from the
date that the International Swing Line Commitments become effective to the
Termination Date (or such earlier date as the International Swing Line
Commitments or the Revolving Commitments of the Banks shall have terminated in
accordance with the terms of the International Swing Line Agreements or
hereof), the International Swing Line Banks severally agree to make available
to the International Swing Line Borrowers International Swing Line Loans. The
International Swing Line Banks shall not make International Swing Line Loans
available to any International Swing Line Borrower if (i) to the actual
knowledge of such International Swing Line Bank either (x) the Companies are
not in compliance with all the conditions specified in paragraphs (b) and (c)
of Section 5.3 or (y) any International Swing Line Borrower is not in
compliance with all the conditions to the making of International Swing Line
Loans set forth in either of the International Swing Line Agreements, or (ii)
if after giving effect to such International Swing Line Loan, the Dollar
Equivalent Amount of International Swing Line Outstandings would exceed
$75,000,000.
(b) Each Bank severally agrees, on the terms and conditions set
forth herein, to purchase participation interests in International Swing Line
Loans outstanding from time to time on any Business Day during the period from
the effective date of the International Swing Line Facility to the Termination
Date (or such earlier date as the International Swing Line
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Commitments or the Revolving Commitments of all Banks shall terminate in
accordance with the terms of the International Swing Line Agreements or hereof,
in an aggregate Dollar Equivalent Amount of principal not to exceed at any time
outstanding the amount set forth on Schedule 2.1 under the heading
"International Swing Line Commitment" (as the same may be reduced from time to
time in accordance with this Agreement or the International Swing Line
Agreements); provided, however, that, after giving effect to any and all
International Swing Line Outstandings, the aggregate Dollar Equivalent Amount
of the principal of all International Swing Line Outstandings shall not at any
time exceed the combined International Swing Line Commitments. It is expressly
agreed that all International Swing Line Obligations shall be deemed to be
Obligations under this Agreement and shall be entitled to the benefits of the
security provided to the Obligations hereunder and under the other Loan
Documents.
(c) In order to provide for the orderly funding and administration
of Loans and International Swing Line Loans, (i) each of the International
Swing Line Banks shall provide to the Agent (and the Agent shall promptly
following receipt provide to each Bank) (x) no less frequently than once each
fiscal quarter, notice of the aggregate Dollar Equivalent Amount of all
International Swing Line Outstandings owing to such International Swing Line
Bank, and (y) prompt notice of the occurrence of any default or event of
default specified in either International Swing Line Agreement or the
occurrence of any event or condition as a result of which such International
Swing Line Bank exercises any right or obligation to suspend or terminate the
availability of International Swing Line Loans and the Dollar Equivalent Amount
of all International Swing Line Outstandings at such time, and (ii) the Agent
shall provide prompt notice to each International Swing Line Bank of the
occurrence of any Default or Event of Default, or the occurrence of any event
or condition as a result of which the Companies are not entitled to obtain an
additional Loan hereunder, of which (in either case) the Agent is deemed to
have notice in accordance with the terms hereof.
(d) The International Swing Line Banks agree that the
International Swing Line Agreements shall not contain terms which are in
conflict with the terms hereof or of any Support Documents, and the
International Swing Line Banks shall cooperate with the Agent in connection
with the exercise of rights or remedies under the Support Documents insofar as
they relate to the International Swing Line Facility; provided that the
discretion, rights or obligations of the Agent in connection with the exercise
of any right, power or privilege (or refraining from exercising any right,
power or privilege) under all or any of the Support Documents, shall be
governed by the terms hereof.
(e) Each of the International Swing Line Banks severally agrees
that whenever it shall receive any payment or otherwise make any application of
funds in respect of principal, interest or fees in respect of International
Swing Line Obligations in which any Bank shall have an International Swing Line
Participation as to which such Bank shall have paid its purchase price
therefor, it shall promptly pay over to the Agent (in the kind of funds so
received or applied) for the account of the Banks (other than the applicable
International Swing Line Bank) in accordance with their respective applicable
International Swing Line Participations the aggregate amount of such payment or
application of funds as shall equal the aggregate amount of International Swing
Line Participations therein.
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(f) Prior to either of the International Swing Line Banks
delegating to, or consenting to the assumption by, any Affiliate of any of the
rights, powers, or obligations of an International Swing Line Bank hereunder or
under any International Swing Line Agreement, such International Swing Line
Bank (including any Affiliate of an initial International Swing Line Bank then
acting in such capacity) shall furnish or cause such Affiliate to furnish to
the Agent (i) the written instrument of delegation or assumption, as
applicable, (ii) a written undertaking in form and substance acceptable to the
Agent acknowledging the terms hereof and agreeing to be bound by and comply
with the terms hereof as they relate to the International Swing Line Banks and
International Swing Line Loans, and (iii) evidence satisfactory to the Agent as
to the due authorization, execution and delivery of such undertaking by a duly
authorized representative of such Affiliate.
2.21 Issuance of FIPs. Notwithstanding anything to the contrary
contained herein, the Companies shall issue or permit FIPs secured by FIP L/Cs
to be issued only on (i) a Business Day which shall constitute the last day of
one or more Interest Periods for Term Loans and in aggregate principal amount
not more than the principal amount of Term Loans to be repaid pursuant to
Section 2.9(e) in connection with such issuance and (ii) not less than five (5)
Business Days' prior notice to the Agent; provided, however, that Danka PLC or
an Affiliate may cause FIPs to be issued on other than the last day of an
Interest Period and in any amount so long as simultaneously with the issuance
of such FIPs the Companies shall pay to the Agent for the account of the Banks
any amounts due under Article IV. The Agent shall give each Bank prompt notice
of the proposed issuance of such FIPs.
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ARTICLE III
THE LETTERS OF CREDIT
3.1 The Letter of Credit Facilities.
(a) Sublimit L/C. On the terms and conditions set forth herein (i)
the Issuing Bank agrees (A) from time to time on any Business Day during the
period from the Effective Date to the Termination Date (or such earlier date as
the Revolving Commitments of all Banks shall have terminated in accordance with
the terms hereof) to Issue Sublimit L/Cs for the account of a Company, and to
amend or renew Sublimit L/Cs previously issued by it, in accordance with
Sections 3.2(c) and 3.2(d), and (B) to honor drafts drawn under and in strict
compliance with the terms and conditions of Sublimit L/Cs; and (ii) the Banks
severally agree to participate in Sublimit L/Cs Issued for the account of a
Company; provided, that the Issuing Bank shall not be obligated to Issue, and
no Bank shall be obligated to participate in, any Sublimit L/C if, as of the
date of Issuance of such Sublimit L/C (the "Issuance Date") (1) the Dollar
Equivalent Amount of the Revolving Loan Outstandings exceeds or would exceed
the combined Revolving Commitments minus the Currency Hedge Utilization, or (2)
the Dollar Equivalent Amount of the Effective Amount of Sublimit L/C
Obligations exceeds or would exceed the L/C Commitment applicable to Sublimit
L/Cs, or (3) the Dollar Equivalent Amount of (A) all Revolving Loan
Outstandings and Term Loan Outstandings in Offshore Currencies plus (B) all
International Swing Line Outstandings (which shall be deemed to be outstanding
in the Dollar Equivalent Amount of $75,000,000) exceeds or would exceed the
Total Offshore Currency Sublimit. Within the foregoing limits, and subject to
the other terms and conditions hereof, a Company's ability to obtain Sublimit
L/Cs shall be fully revolving and, accordingly, a Company may, during the
foregoing period, obtain Sublimit L/Cs to replace Sublimit L/Cs which have
expired or which have been drawn upon and reimbursed.
(b) FIP L/C. On the terms and conditions set forth herein (i) the
Issuing Bank agrees (A) from time to time on any Business Day during the period
from the date of sale and delivery by Danka PLC or its Affiliate of a FIP to
the Termination Date (or such earlier date as the Term Loan Commitments of all
Banks shall have terminated in accordance with the terms hereof) to Issue FIP
L/Cs in British pounds sterling for the account of Danka PLC or Danka PLC and
such Affiliate, and (B) to honor drafts drawn under and in strict compliance
with the terms and conditions of FIP L/Cs; and (ii) the Banks severally agree
to participate in FIP L/Cs Issued for the account of Danka PLC or Danka PLC and
such Affiliate; provided, that the Issuing Bank shall not be obligated to
Issue, and no Bank shall be obligated to participate in, any FIP L/C if, as of
the date of Issuance of such FIP L/C (the "Issuance Date") (1) there shall not
be substantially simultaneously issued FIPs, the FIP Holder Payments in respect
of which are to be supported by such FIP L/C, or (2) after giving effect to
such Issuance, the Dollar Equivalent Amount of the Term Loan Outstandings
exceeds or would exceed the aggregate Term Loan Commitments. Within the
foregoing limits, and subject to the other terms and conditions hereof, Danka
PLC's ability to obtain FIP L/Cs shall be fully revolving, and, accordingly,
Danka PLC may, during the foregoing period, obtain FIP L/Cs to secure FIPs, so
long as the proceeds of FIPs are used,
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together with such other funds as may be necessary, simultaneously to repay
outstanding Term Loans by an amount equivalent to the face amount of the FIP
L/C being issued on the Issuance Date. Payments of principal amount of Term
Loans with proceeds of FIPs shall not reduce the Term Loan Commitments.
(c) The Issuing Bank is under no obligation to Issue any Letter of
Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Bank from Issuing such Letter of Credit, or any
Requirement of Law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the Issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the
Issuing Bank is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the Issuing Bank in good faith deems material
to it;
(ii) the Issuing Bank has received written notice from
any Bank, the Agent or a Company, on or prior to the Business Day
prior to the requested date of Issuance of such Letter of Credit, that
one or more of the applicable conditions contained in Article V is not
then satisfied;
(iii) the expiry date of any requested Letter of Credit
is more than one year after the date of Issuance, is after the
Termination Date, or, in the case of a commercial Letter of Credit, is
less than 25 days prior to the Termination Date;
(iv) any requested Letter of Credit does not provide for
drafts, or is not otherwise in form and substance acceptable to the
Issuing Bank, or the Issuance of a Letter of Credit shall violate any
applicable policies of the Issuing Bank;
(v) any standby Letter of Credit is for the purpose of
supporting the issuance of any letter of credit by any other Person;
or
(vi) such Letter of Credit is in a face amount less than
the Dollar Equivalent Amount of $1,000,000 (or such other lesser
amount as agreed to by the Issuing Bank) or denominated in a currency
other than Dollars or Offshore Currencies, or in the case of any FIP
L/C, is denominated in any currency other than British pounds
sterling.
3.2 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Sublimit L/C and FIP L/C shall be Issued upon the
irrevocable written request of a Company and Danka PLC, respectively, received
by the Issuing Bank three Business Days
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prior to the proposed date of Issuance. Each such request for Issuance of a
Letter of Credit shall be by facsimile, confirmed immediately in an original
writing, in the form of an L/C Application, and shall specify in form and
detail satisfactory to the Issuing Bank: (i) the Company on the application of
which such Letter of Credit is being Issued; (ii) the Applicable Currency,
which in the case of FIP L/Cs shall be British pounds sterling only; (iii) the
proposed date of Issuance of such Letter of Credit (which shall be a Business
Day); (iv) the face amount of such Letter of Credit; (v) the expiry date of
such Letter of Credit; (vi) the name and address of the beneficiary thereof;
(vii) the documents to be presented by the beneficiary of such Letter of Credit
in case of any drawing thereunder; (viii) the full text of any certificate to
be presented by the beneficiary in case of any drawing thereunder; and (ix)
such other matters as the Issuing Bank may reasonably require.
(b) Two Business Days prior to the Issuance of any Letter of
Credit, the Issuing Bank shall confirm with the Agent the availability of the
Commitments with respect to such Issuance and that the conditions specified in
Article V have been satisfied. Subject to the terms and conditions hereof, the
Issuing Bank shall, on the requested date, Issue a Letter of Credit for the
account of the applicable Company in accordance with the Issuing Bank's usual
and customary business practices.
(c) From time to time while a Sublimit L/C is outstanding and
prior to the Termination Date (or such earlier date as the Revolving
Commitments of all Banks shall have terminated in accordance with the terms
hereof), the Issuing Bank shall, upon the written request of a Company (with a
copy sent to the Agent) three Business Days prior to the proposed date of
amendment, amend any Sublimit L/C Issued by it. Each such request for
amendment of a Sublimit L/C shall be made in writing in the form of an L/C
Amendment Application and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the Sublimit L/C to be amended; (ii) the proposed date of
amendment of such Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may require. The Issuing Bank shall be under no obligation to amend any
Sublimit L/C if: (A) the Issuing Bank would have no obligation at such time to
Issue such Sublimit L/C in its amended form under the terms of this Agreement;
or (B) the beneficiary of such Sublimit L/C does not accept the proposed
amendment to such Sublimit L/C. The Agent will promptly notify the Banks of a
request of Issuance or renewal or amendment of a Sublimit L/C or FIP L/C.
(d) The Issuing Bank and the Banks agree that, while a Sublimit
L/C or FIP L/C is outstanding and prior to the Termination Date (or such
earlier date as the Revolving Commitments (in the case of Sublimit L/Cs) or
Term Loan Commitments (in the case of FIP L/Cs) of all Banks shall have
terminated in accordance with the terms hereof), the Issuing Banks shall be
entitled to authorize the automatic renewal of any Sublimit L/C or FIP L/C
Issued by it unless (A) the Issuing Bank would have no obligation at such time
to Issue or amend such Letter of Credit in its renewed form under the terms of
this Agreement; (B) the beneficiary of such Letter of Credit does not accept
the proposed renewal of such Letter of Credit; or (C) the Issuing Bank receives
written request from a Company (with a copy sent to the Agent) three Business
Days prior to the proposed date of notification of non-renewal, not to renew
any Letter of Credit. Each such request for
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non-renewal of a Letter of Credit shall be made in writing and shall specify
(i) the Letter of Credit number; (ii) the beneficiary's name; and (iii) that
the Issuing Bank is instructed to notify the beneficiary of non-renewal.
(e) The Issuing Bank shall deliver to the Agent any notices of
termination or other communications to any Letter of Credit beneficiary or
transferee, and take any other action as necessary or appropriate, at any time
and from time to time, in order to cause the expiry date of such Letter of
Credit to be a date not later than the Termination Date.
(f) This Agreement shall control in the event (and to the extent)
of any conflict with any L/C-Related Document (other than any Letter of
Credit).
(g) The Issuing Bank will also deliver to the Agent, concurrently
with or promptly following its delivery of a Letter of Credit, or amendment to
or renewal of a Sublimit L/C or FIP L/C, to an advising bank or a beneficiary,
a true and complete copy of each such Letter of Credit or amendment to or
renewal of a Sublimit L/C or FIP L/C.
(h) The Agent shall furnish to each Bank quarterly a summary of
outstanding Letters of Credit.
3.3 Risk Participations, Drawings and Reimbursements.
(a) Immediately upon the Issuance of each Letter of Credit, each
Bank shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a participation in such Letter of Credit and
each drawing thereunder in an amount equal to the product of (i) the Pro Rata
Share of such Bank, times (ii) the maximum amount available to be drawn under
such Letter of Credit and the amount of such drawing, respectively, in the
currency in which such Letter of Credit is stated. For purposes of Section
2.1(a), each Issuance of a Sublimit L/C shall be deemed to utilize the
Revolving Commitment of each Bank by an amount equal to the amount of such
participation. For the purposes of Section 2.1(b), each Issuance of a FIP L/C
shall be deemed to utilize the Term Loan Commitment of each Bank by an amount
equal to the amount of such participation.
(b) In the event of any drawing under a Letter of Credit by the
beneficiary or transferee thereof, the Issuing Bank will promptly notify the
Agent and the Companies of the request and of the day on which the Issuing Bank
is to pay the beneficiary (which payment date is not to be less than one day
later). The Companies jointly and severally agree to reimburse the Issuing
Bank prior to 11:00 a.m. (Charlotte time), on each date that any amount is paid
by the Issuing Bank under any Letter of Credit (each such date, an "Honor
Date"), in an amount equal to the Dollar Equivalent Amount, as determined by
the Issuing Bank, of the amount so paid by the Issuing Bank. In the event the
Companies fail to reimburse the Issuing Bank for the full amount of any drawing
under any Letter of Credit by 11:00 a.m. (Charlotte time) on the Honor Date,
the Issuing Bank will promptly notify the Agent who will in turn promptly
notify each Bank. Unless notified by the Companies to convert an unreimbursed
drawing into Syndicated Loans or, if the Companies
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request a conversion of an unreimbursed drawing into Syndicated Loans but the
unreimbursed drawing is not converted because of the Companies' failure to
satisfy the conditions set forth in Section 5.3, each Bank will be deemed to be
obligated to make an L/C Advance in Dollars in the full Dollar Equivalent
Amount of each Bank's Pro Rata Share of such drawing and such L/C Advances
shall bear interest at a rate per annum equal to the Base Rate plus 2% per
annum. Any notice given by the Issuing Bank or the Agent pursuant to this
Section 3.3(b) may be oral if immediately confirmed in writing (including by
facsimile); provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(c) With respect to any unreimbursed drawing that the applicable
Company requests be converted into a Syndicated Loan and that satisfies the
conditions set forth in Section 5.3, each Bank shall upon any notice make
available to the Agent for the account of the relevant Issuing Bank an amount
in Dollars equal to the Dollar Equivalent Amount (as indicated in such notice)
of the currency in which such Letter of Credit is denominated and in
immediately available funds equal to its Pro Rata Share of the amount of such
drawing, whereupon the participating Banks shall each be deemed to have made a
Syndicated Loan (either Revolving Loan or Term Loan, as the case may be)
consisting of a Base Rate Loan to the Company in that amount. If any Bank so
notified fails to make available to the Agent for the account of the Issuing
Bank the amount of such Bank's Pro Rata Share of the amount of such drawing by
no later than 2:00 p.m. (Charlotte time) on the Honor Date, then interest shall
accrue on such Bank's obligation to make such payment, from the Honor Date to
the date such Bank makes such payment, at a rate per annum equal to the Federal
Funds Rate in effect from time to time during such period. The Agent shall
promptly give notice of the occurrence of the Honor Date, but failure of the
Agent to give any such notice on the Honor Date or in sufficient time to enable
any Bank to effect such payment on such date shall not relieve such Bank from
its obligations under this Section 3.3.
(d) Provided that the Issuing Bank has paid a drawing under a
Letter of Credit substantially in accordance with its terms, each Bank's
obligation in accordance with this Agreement to make the Syndicated Loans or
L/C Advances, as contemplated by this Section 3.3, as a result of a drawing
under a Letter of Credit, shall be absolute and unconditional and without
recourse to the Issuing Bank and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against the Issuing Bank, the Companies or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default, an Event of Default or a Material Adverse Effect; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing; provided that if the conditions to making any Loan pursuant to
Section 5.3 shall not then be satisfied, each Bank's payment of such amount
shall be deemed to constitute its payment of the purchase price for its
participation in the applicable drawing under the applicable Letter of Credit.
3.4 Repayment of Participations. (a) Upon (and only upon) receipt
by the Agent for the account of the Issuing Bank of immediately available funds
from the Companies (i) in reimbursement of any payment made by the Issuing Bank
under the Letter of Credit with respect to which any Bank has paid the Agent
for the account of the Issuing Bank for such Bank's participation in such
Letter of Credit pursuant to Section 3.3 or (ii) in payment of interest
thereon,
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the Agent will pay to such Bank, in the same funds as those received by the
Agent for the account of the Issuing Bank, the amount of such Bank's Pro Rata
Share of such funds, and the Issuing Bank shall receive the amount of the Pro
Rata Share of such funds of any Bank that did not so pay the Agent for the
account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to
pay to the Companies, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by the
Companies to the Agent for the account of the Issuing Bank pursuant to Section
3.4(a) in reimbursement of a payment made under any Letter of Credit or
interest thereon, each Bank shall, on demand of the Agent, forthwith pay to the
Agent or the Issuing Bank the amount of its Pro Rata Share of any amounts so
paid by the Agent or the Issuing Bank plus interest thereon from the date such
demand is made to the date such amounts are paid by such Bank to the Agent or
the Issuing Bank, at a rate per annum equal to the Federal Funds Rate in effect
from time to time.
3.5 Role of the Issuing Bank. (a) Each Bank and the Companies
agree that, in paying any drawing under a Letter of Credit, the Issuing Bank
shall not have any responsibility to obtain any document (other than any sight
draft and certificates expressly required by the applicable Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document
or the authority of the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Bank shall be liable
to any Bank for: (i) any action taken or omitted in connection herewith at the
request or with the approval of the Majority Banks; (ii) any action taken or
omitted in the absence of gross negligence or willful misconduct; or (iii) the
due execution, effectiveness, validity or enforceability of any L/C-Related
Document.
(c) The Companies hereby assume all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Companies' pursuing such rights and remedies as they may have
against the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank (including the Banks), shall be liable or
responsible for any of the matters described in clauses (i) through (vii) of
Section 3.6; provided, however, anything in such clauses to the contrary
notwithstanding, that the Companies may have a claim against the Issuing Bank,
and the Issuing Bank may be liable to the Companies, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Companies which the Companies prove were caused by the Issuing
Bank's willful misconduct or gross negligence or the Issuing Bank's willful
failure to pay under any Letter of Credit except as a result of a court order
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation; and (ii) the Issuing Bank shall not
be responsible for the validity or sufficiency of any instrument transferring
or purporting to
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transfer a Letter of Credit or the rights or benefits thereunder or assigning
the proceeds thereof, in whole or in part, in accordance with the terms of such
Letter of Credit which may prove to be invalid or ineffective for any reason.
3.6 Obligations Absolute. Provided that the Issuing Bank has paid
a drawing under a Letter of Credit substantially in accordance with its terms,
the obligations of the Companies under this Agreement and any L/C-Related
Document to reimburse the Issuing Bank for a drawing under a Letter of Credit,
and to repay any L/C Borrowing and any drawing under a Letter of Credit
converted into any Syndicated Loan or Syndicated Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement and each such other L/C Related Document under all
circumstances, including the following:
(i) any lack of validity or enforceability of this
Agreement or any L/C-Related Document;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the obligations of the
Companies in respect of any Letter of Credit or any other amendment or
waiver of or any consent to departure from all or any of the
L/C-Related Documents, which have been previously agreed to by the
respective Company;
(iii) the existence of any claim, set-off, defense or
other right that the Companies may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any Person
for whom any such beneficiary or any such transferee may be acting),
the Issuing Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C-Related
Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of
Credit against presentation of a draft or certificate that reasonably
complies with the terms of any Letter of Credit; or any payment
made by the Issuing Bank under any Letter of Credit to any Person
purporting to be (and providing reasonable evidence of its status as)
a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of
or successor to any beneficiary or any transferee of any Letter of
Credit, including any arising in connection with any Insolvency
Proceeding;
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(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guarantee, for all or any of the obligations
of the Companies in respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to,
or a discharge of, the Companies or a guarantor.
3.7 Cash Collateral Pledge. Upon (i) the request of the Agent,
(A) if the Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder,
or (B) if, as of the Termination Date (or such earlier date as the Revolving
Commitments (as to Sublimit L/Cs) or Term Loan Commitments (as to FIP L/Cs)
shall have terminated in accordance with the terms hereof), any Letters of
Credit may for any reason remain outstanding and partially or wholly undrawn,
or (ii) the occurrence of the circumstances described in Section 2.11 requiring
the Companies to Cash Collateralize Letters of Credit, then the Companies shall
immediately Cash Collateralize the L/C Obligations in an amount equal to such
L/C Obligations or in the amount required under Section 2.11. If any Letter of
Credit expires without the application of such Cash Collateral in full, or if
all L/C Borrowings with respect to any Letter of Credit have been paid in full
by the Companies, then as long as there is no Event of Default in existence and
so long as no such application shall be made within 25 days of the expiration
of a Letter of Credit, the Agent shall return to the Companies any cash or
deposit account balances that were used by the Companies to Cash Collateralize
such Letters of Credit pursuant to this Section 3.7 and were not applied to L/C
Borrowings.
3.8 Letter of Credit Fees. (a) The Companies shall pay to the
Agent for the account of each of the Banks a letter of credit fee with respect
to (x) the Sublimit L/Cs equal to the Applicable Margin with respect to the
Offshore Rate Loans less 1/16th of 1% per annum of the average daily maximum
Dollar Equivalent Amount (computed based on currency exchange rates in effect
as of the most recent Valuation Date) available to be drawn under the
outstanding Sublimit L/Cs and (y) the FIP L/Cs equal to the Applicable Margin
with respect to Offshore Rate Loans of the average daily Dollar Equivalent
Amount (computed based on currency exchange rates in effect as of the most
recent Valuation Date) available to be drawn under the outstanding FIP L/Cs, in
each case computed on a quarterly basis in arrears on the last Business Day of
each calendar quarter based upon Sublimit L/Cs and FIP L/Cs outstanding for
that quarter as calculated by the Agent. Such letter of credit fees shall be
due and payable quarterly in arrears on the first Business Day following the
calendar quarter during which Letters of Credit are outstanding, commencing on
the first such quarterly date to occur after the Effective Date, through the
Termination Date (or such later date upon which the outstanding Letters of
Credit shall expire), with the final payment to be made on the Termination Date
(or such later expiration date). For purposes of calculating the fees payable
under this Section 3.8(a), any undrawn commercial Letters of Credit shall be
considered outstanding and available to be drawn upon for 25 days after their
expiry date.
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(b) The Companies shall pay to the Agent for the account of the
Issuing Bank a letter of credit fee with respect to the Sublimit L/Cs equal to
1/16th of 1% per annum of the average daily maximum Dollar Equivalent Amount
(computed based on currency exchange rates in effect as of the most recent
Valuation Date) available to be drawn under the outstanding Sublimit L/Cs,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon Letters of Credit outstanding for that quarter as
calculated by the Agent. Such letter of credit fees shall be due and payable
quarterly in arrears on the first Business Day following the calendar quarter
during which Letters of Credit are outstanding, commencing on the first such
quarterly date to occur after the Effective Date, through the Termination Date
(or such later date upon which the outstanding Letters of Credit shall expire),
with the final payment to be made on the Termination Date (or such later
expiration date). For purposes of calculating the fees payable under this
Section 3.8(b), any undrawn commercial Letters of Credit shall be considered
outstanding and available to be drawn upon for 25 days after their expiry date.
(c) The Companies shall pay to the Issuing Bank from time to time
on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the Issuing Bank relating to
letters of credit as from time to time in effect.
3.9 Uniform Customs and Practice. The Uniform Customs and
Practice for Documentary Credits as published by the International Chamber of
Commerce ("UCP") most recently at the time of issuance of any Letter of Credit
shall (unless otherwise expressly provided in the Letters of Credit) apply to
the Letters of Credit.
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ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.1 Taxes.
(a) Any and all payments by any Company to each Bank, each
Designated Bidder or the Agent under this Agreement and any other Loan Document
shall be made free and clear of, and without deduction or withholding for, any
Taxes imposed in any jurisdiction from or through which a payment is made. In
addition, the Companies shall pay all Other Taxes.
(b) If any Company shall be required by law to deduct or withhold
any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank, any Designated Bidder or the Agent, then:
(i) the sum payable by the Company in respect of which
the relevant deduction or withholding is required shall be increased
as necessary so that, after making all required deductions and
withholdings (including deductions and withholdings applicable to
additional sums payable under this Section), such Bank, such
Designated Bidder or the Agent, as the case may be, receives and
retains an amount equal to the sum it would have received and retained
had no such deductions or withholdings been made;
(ii) such Company shall make such deductions and
withholdings;
(iii) such Company shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) such Company shall also pay to each Bank, each
Designated Bidder or the Agent for the account of such Bank or
Designated Bidder, at the time interest is paid or, with respect to a
cost incurred after such interest is paid, on request of such Bank
after such incurrence, further Taxes in the amount that the respective
Bank or Designated Bidder determines in good faith as necessary to
preserve the after-tax yield such Bank or Designated Bidder would have
received if such Taxes, Other Taxes or Further Taxes had not been
imposed.
(c) Each Company agrees to indemnify and hold harmless each Bank,
each Designated Bidder or the Agent for the full amount of (i) Taxes, (ii)
Other Taxes, and (iii) Further Taxes in the amount that the respective Bank
determines in good faith as necessary to preserve the after-tax yield such Bank
or Designated Bidder would have received if such Taxes, Other Taxes or Further
Taxes had not been imposed, and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto,
whether or not such Taxes, Other Taxes or Further Taxes were correctly or
legally asserted; provided, that no Company shall be required to indemnify a
Bank or a Designated Bidder for any such liability which arose because of the
failure of said Bank or Designated Bidder to make a payment for more than five
days after such Bank or
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Designated Bidder became aware of the requirement to make such payment.
Payment under this indemnification shall be made within 30 days after the date
the applicable Bank or Designated Bidder or the Agent makes written demand
therefor. Each Bank agrees to give notice within 30 days of becoming aware of
any right to indemnification under this Section 4.1(c).
(d) Within 30 days after the date of any payment by any Company of
Taxes, Other Taxes or Further Taxes, such Company shall furnish to each Bank,
each Designated Bidder or the Agent the original or a certified copy of a
receipt evidencing payment thereof.
(e) If a Company is required to pay any amount to any Bank, any
Designated Bidder or the Agent pursuant to Section 4.1(b) or Section 4.1(c),
then such Bank, such Designated Bidder or the Agent shall use reasonable
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by such Company which may thereafter accrue, if such change in the sole
judgment of such Bank or Designated Bidder is not otherwise disadvantageous to
such Bank or Designated Bidder. Additionally such Bank or Designated Bidder
shall use reasonable efforts to assist the Companies (for themselves and on
behalf of each Guarantor) in securing any tax credits or refunds which may be
available. If any tax credit or refund is available to any Bank or Designated
Bidder, it will make timely application therefor and when received, send any
such refund to the Companies or, as directed by the Companies to a Guarantor.
Any Bank or Designated Bidder requesting indemnification under subsection (b)
or (c) or under any Guarantee shall, at the request of a Company or a
Guarantor, provide a detailed calculation in writing of the applicable amounts.
4.2 Illegality.
(a) If any Bank reasonably determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make any
Offshore Rate Loans (including Offshore Rate Loans in any Applicable Currency),
then, on notice thereof by such Bank to each Company through the Agent, any
obligation of that Bank to make such Offshore Rate Loans shall be suspended
until such Bank notifies the Agent and each Company that the circumstances
giving rise to such determination no longer exist.
(b) If a Bank reasonably determines or any Governmental Authority
asserts that it is unlawful to maintain any Offshore Rate Loan (including,
without limitation, any Offshore Currency Loan in any particular Applicable
Currency), the Companies shall, upon their receipt of notice of such
determination and demand from such Bank (with a copy to the Agent), prepay in
full such Offshore Rate Loan of that Bank then outstanding, together with
interest accrued thereon and amounts required under Section 4.4, either on the
last day of the Interest Period thereof, if such Bank may lawfully continue to
maintain such Offshore Rate Loans to such day, or immediately, if such Bank may
not lawfully continue to maintain such Offshore Rate Loan. If any Offshore
Rate Loan made to a Company is required to be so repaid, then with respect to
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Loans in Dollars concurrently with such prepayment, such Company may borrow
from the affected Bank, in the amount of such repayment, a Base Rate Loan.
4.3 Increased Costs and Reduction of Return.
(a) If any Bank reasonably determines that, due to either (i) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the Offshore
Rate) in or in the interpretation of any law or regulation or (ii) the
compliance by that Bank with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Bank of agreeing to make or making,
funding or maintaining any Offshore Rate Loans or participating in Letters of
Credit, or, in the case of the Issuing Bank, any increase in the cost to the
Issuing Bank of agreeing to Issue, Issuing or maintaining any Letter of Credit
or of funding any drawing under any Letter of Credit, then the Companies shall
be liable for, and shall from time to time, upon demand (with a copy of such
demand to be sent to the Agent), pay to such Bank, additional amounts as are
sufficient to compensate such Bank for such increased costs; provided, that no
Company shall be obligated to reimburse any Bank for any cost incurred pursuant
to this Section more than 30 days prior to notice to the Companies of the
incurrence of such cost; except that if any change or compliance requirement
described above shall have a retroactive application, the Companies shall be
obligated to make such reimbursement with respect to such retroactive effect,
if such Bank shall give the Companies notice thereof within 30 days of such
Bank's having notice thereof. At the request of the Companies, any Bank
claiming the right to payment under this subsection shall provide a detailed
calculation of such payment to the requesting Company.
(b) If any Bank shall have reasonably determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration
of any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by such Bank (or its Lending Office) or any corporation controlling
such Bank with any Capital Adequacy Regulation, affects or would affect the
amount of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's or
such corporation's desired return on capital) shall have determined that the
rate of return on its or such controlling corporation's capital as a
consequence of its Commitment or the Loans made or Letters of Credit Issued or
participated in by such Bank is reduced to a level below that which such Bank
or such controlling corporation could have achieved but for the occurrence of
such circumstances, then, upon demand of such Bank to the Companies, the
Companies shall pay to such Bank, from time to time as specified by such Bank,
additional amounts sufficient to compensate such Bank or such controlling
corporation for such reduction in rate of return; provided, that the Companies
shall not be obligated to reimburse any Bank for any reduction on the rate of
return on capital pursuant to this Section realized more than 30 days prior to
notice to the Companies of such reduction; except that if any change or
compliance requirement described above shall have a retroactive application,
the Companies shall be obligated to make such
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reimbursement with respect to such retroactive effect, if such Bank shall give
the Companies notice thereof within 30 days of such Bank's having notice
thereof. In calculating any amounts payable hereunder, each Bank shall use any
reasonable method of allocation and attribution that it shall deem applicable.
(c) Without limiting the foregoing but without duplication for any
Associated Costs reimbursed pursuant to Section 4.3(a) or (b), as to any
Offshore Currency Loans denominated in British pounds sterling, the Companies
will pay the Associated Costs. Any Bank requesting reimbursement under this
Section 4.3(c) shall give the Companies written notice, including a detailed
calculation, within 30 days of having notice of the incurrence of any
Associated Costs.
4.4 Funding Losses. The Companies shall reimburse each Bank and
hold each Bank harmless from any loss or expense which such Bank may sustain or
incur as a consequence of:
(a) the failure of any Company to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of any Company to borrow, continue or convert a
Loan after such Company has given (or is deemed to have given) an Irrevocable
Notice of Syndicated Activity;
(c) the failure of either Company to make any prepayment in
accordance with any notice delivered under Section 2.9 or 2.11;
(d) the prepayment (including pursuant to Section 2.9 or 2.11) or
other payment (including after acceleration thereof) of an Offshore Rate Loan
on a day that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any Offshore
Rate Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period; including any such loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain its Offshore
Rate Loans or from fees payable to terminate the deposits from which such funds
were obtained or loan charges relating to any Offshore Currency Loans. For
purposes of calculating amounts payable by the Companies to the Banks under
this Section and under Section 4.3(a), each Offshore Rate Loan made by a Bank
(and each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the IBOR used in determining the
Offshore Rate for such Offshore Rate Loan by a matching deposit or other
borrowing in the interbank eurocurrency market for a comparable amount and for
a comparable period, whether or not such Offshore Rate Loan is in fact so
funded.
4.5 Inability to Determine Rates. If the Agent determines that
for any reason adequate and reasonable means do not exist for determining the
Offshore Rate or the Spot Rate for any requested Interest Period with respect
to a proposed Offshore Rate Loan, or the Majority Banks determine that the
Offshore Rate or the Spot Rate applicable pursuant to Section 2.13(a) for any
requested Interest Period with respect to a proposed Offshore Rate Loan does
not adequately and
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fairly reflect the cost to the Banks of funding such Loan, the Agent will
promptly so notify the Companies and each Bank. Thereafter, the obligation of
the Banks to make or convert into or continue Offshore Rate Loans (including
Offshore Rate Loans in any Applicable Currency) hereunder shall be suspended
until the Agent upon the instruction of the Majority Banks revokes such notice
in writing. Upon receipt of such notice, each Company may revoke any
Irrevocable Notice of Syndicated Activity then submitted by it. If such
Company does not revoke such Notice with respect to a Syndicated Loan in
Dollars, the Banks shall make, convert or continue the Syndicated Loans, as
proposed by such Company, in the amount specified in the applicable notice
submitted by such Company, but such Syndicated Loans shall be made, converted
into or continued as Base Rate Loans instead of Offshore Rate Loans. In the
case of any Offshore Currency Loans, the Syndicated Borrowing or continuation
shall be in an aggregate amount equal to the Dollar Equivalent Amount of the
originally requested Syndicated Borrowing or continuation in the applicable
Offshore Currency, and to that end any outstanding Offshore Currency Loans
which are the subject of any continuation shall be redenominated and
converted into Base Rate Loans in Dollars with effect from the last day of the
Interest Period with respect to any such Offshore Currency Loans.
4.6 Replacement Banks. The Companies may, in their sole
discretion, on 10 Business Days' prior written notice to the Agent and a Bank
(except in the case of the replacement of a Bank after notice from such Bank to
the Companies pursuant to Section 4.3, in which case no prior notice from the
Companies is required), cause such Bank to (and such Bank shall) assign,
pursuant to Section 11.8, all of its rights and obligations under this
Agreement (other than with respect to outstanding Bid Loans) to an Eligible
Assignee designated by the Companies which is willing to become a Bank for a
purchase price equal to the outstanding principal amount of the Syndicated
Loans payable to such Bank plus any accrued but unpaid interest on such Loans,
any accrued but unpaid fees with respect to such Bank's Commitment and any
other amount payable to such Bank under this Agreement (other than with respect
to outstanding Bid Loans); provided, that any expenses or other amounts which
would be owing to such Bank pursuant to any indemnification provision hereof
(including, if applicable, Section 4.4) shall be payable by the Companies as if
the Companies had prepaid the Loans of such Bank rather than such Bank having
assigned its interest hereunder. The Companies or the Assignee shall pay the
applicable processing fee under Section 11.8.
4.7 Mitigation. Each Bank agrees that, with reasonable promptness
after the officer of such Bank responsible for administering the Loans of such
Bank becomes aware that such Bank has become an affected Bank under Section
4.2, is entitled to receive payments under Section 4.3, or is or has become
subject to U.S. or United Kingdom withholding taxes payable by any Company in
respect of its Loans, it will, to the extent not inconsistent with any internal
policy of such Bank or any applicable legal or regulatory restriction, (i) use
all reasonable efforts to make, fund or maintain the Commitment of such Bank or
the Loans of such Bank through another lending office of such Bank, or (ii)
take such other reasonable measures, if, as a result thereof, the circumstances
which would cause such Bank to be an affected Bank under Section 4.2 would
cease to exist, or the additional amounts which would otherwise be required to
be paid to such Bank pursuant to Section 4.3 would be reduced, or such
withholding taxes would be reduced, and
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if the making, funding or maintaining of such Commitment or Loans through such
other lending office or in accordance with such other measures, as the case may
be, would not otherwise adversely affect such Commitment or Loans or the
interests of such Bank; provided that such Bank will not be obligated to
utilize such other lending office pursuant to this Section 4.7 unless the
Companies agree to pay all incremental expenses incurred by such Bank as a
result of utilizing such other lending office as described in clause (i) above.
A certificate as to the amount of any such expenses (setting forth in
reasonable detail the basis for requesting such amount and the calculation
thereof) submitted by such Bank to the Companies (with a copy to the Agent)
shall be prima facie evidence of such expenses.
4.8 Survival. The agreements and obligations of the Companies in
this Article IV shall survive the payment of all other Obligations.
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ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions to Execution of Agreement. As a condition
precedent to the execution and delivery by the Agent and the Banks of this
Agreement and the other Loan Documents to which they are a party, the Agent
shall have received on the Closing Date, in form and substance satisfactory to
the Agent and the Banks, the following:
(i) executed originals of each of this Agreement
and the Notes, together with all schedules and exhibits
thereto;
(ii) the favorable written opinion or opinions
with respect to the Loan Documents and the respective
transactions contemplated thereby of special counsel to the
Companies dated the Closing Date, addressed to the Agent and
the Banks and reasonably satisfactory to the Agent and the
Banks;
(iii) resolutions of the boards of directors or
other appropriate governing body (or of the appropriate
committee thereof) of each Company (including such item or
items relating to Dankalux Sarl as sole commandite of
Dankalux) certified by its secretary or assistant secretary or
other appropriate representative of such Company as of the
Closing Date, approving and adopting the Loan Documents to be
executed by such Person, and authorizing the execution and
delivery and performance thereof;
(iv) specimen signatures of officers or other
appropriate representatives of each Company executing the
Loan Documents on behalf of such Company (including such item
or items relating to Dankalux Sarl as sole commandite of
Dankalux), which signature, and the office and incumbency of
such person, shall be certified by the appropriate
representative of such Company;
(v) the charter documents and bylaws or deed of
incorporation and articles of association or other
organizational document of each Company (including such item
or items relating to Dankalux Sarl as sole commandite of
Dankalux) certified by the appropriate representative of such
Company;
(vi) Pro Forma Historical Statements;
(vii) Pro Forma Projections;
(viii) evidence satisfactory to the Agent
that all fees payable by the Companies on the Closing Date to
the Agent, NCMI, NationsBank and the Banks, including the
International Swing Line Banks, have been paid in full;
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(ix) evidence of consent by the necessary banks
under the Existing Credit Agreement to the entering into and
performance by the Companies under this Agreement; and
(x) such other documents, instruments,
certificates and opinions as the Agent or the Banks may
reasonably request on or prior to the Closing Date in
connection with the acquisition of the Acquired Business.
5.2 Conditions of Initial Credit Extensions. The obligation of
each Bank to make its initial Syndicated Loan hereunder and to receive through
the Bid Agent the initial Competitive Bid Request, the obligation of any
Issuing Bank to Issue the initial Letter of Credit or to deem the Existing
Letter of Credit a Letter of Credit issued hereunder, and the obligation of
NationsBank to make the initial Swing Line Loan hereunder, is subject to the
conditions that the conditions in Section 5.1 shall have been satisfied on or
before December 31, 1996 and that:
(a) The Agent shall have received, on or before the initial
Borrowing Date or Issuance Date, respectively, all of the following, in form
and substance satisfactory to the Agent and (except as otherwise specified)
each Bank, and in sufficient copies for each Bank:
(i) Credit Agreement. This Agreement executed by each
party thereto;
(ii) Resolutions; Incumbency.
(1) resolutions of the board of directors or
other appropriate governing body (or of the appropriate
committee thereof) of each Subsidiary executing any Support
Document, certified by its secretary or assistant secretary or
other appropriate representative of such Subsidiary as of the
Effective Date, approving and adopting the Loan Documents to
be executed by such Person, and authorizing the execution and
delivery and performance thereof;
(2) specimen signatures of officers or other
appropriate representatives of each Subsidiary executing any
Support Document on behalf of such Subsidiary, which
signatures, and the office and incumbency of such person,
shall be certified by the appropriate representative of each
such Subsidiary;
(3) the charter documents and bylaws or deed of
incorporation and articles of association or other
organizational documents of each Subsidiary executing any
Support Document, certified by the appropriate representative
of such Subsidiary;
(iii) Pledge Agreements. The Pledge Agreements, together
with the certificates or other evidence of ownership of the
Subsidiaries pledged thereunder and such additional documents,
including documents evidencing the perfection and priority of the
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Liens conferred under the Pledge Agreements, as the Agent and the
Banks reasonably deem necessary with respect thereto;
(iv) Legal Opinions:
(1) An opinion of Cleary, Gottlieb,
Steen & Hamilton, Netherlands, Belgian, French and
German counsel for the Companies and Guarantors,
addressed to the Agent, the Issuing Bank, the Banks
and the International Swing Line Banks and in form
and content reasonably acceptable to the Agent and
the Banks;
(2) An opinion of Shumaker, Loop and
Kendrick, counsel to Danka Holding and the U.S.
Guarantors, addressed to the Agent, the Issuing
Bank, the Banks and the International Swing Line
Banks and in form and content reasonably acceptable
to the Agent and the Banks;
(3) An opinion of Clifford Chance,
counsel to Danka PLC, and special counsel to
various Subsidiaries of Danka PLC located in the
United Kingdom, Germany, France, Italy, Belgium,
Spain and the Netherlands, addressed to the Agent,
the Issuing Bank, the Banks and the International
Swing Line Banks as to certain matters relating to
the Acquired Business and the transactions
contemplated hereby and in form and content
reasonably acceptable to the Agent and the Banks;
(4) An opinion of Grimaldi & Clifford
Chance, counsel to the Italian Guarantors,
addressed to the Agent, the Issuing Bank, the Banks
and the International Swing Line Banks and in form
and content reasonably acceptable to the Agent and
the Banks;
(5) An opinion of Bonn & Schmitt,
Luxembourg counsel for Dankalux Holding Sarl and
Dankalux Sarl, addressed to the agent, the Issuing
Bank, the Banks and the International Swing Line
Banks and in form and content reasonably acceptable
to the Agent and the Banks;
(6) An opinion of Lang Mitchener,
counsel to the Canadian Federal Guarantor,
addressed to the Agent, the Issuing Bank, the Banks
and the International Swing Line Banks and in form
and content reasonably acceptable to the Agent and
the Banks;
(7) An opinion of Ballem McDill McInnes
Eden, counsel to the Alberta Guarantors, addressed
to the Agent, the Issuing Bank, the Banks and the
International Swing Line Banks and in form and
content reasonably acceptable to the Agent and the
Banks;
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(8) An opinion of Minter Ellison,
counsel to the Australian Guarantors, addressed to
the Agent, the Issuing Bank, the Banks and the
International Swing Line Banks and in form and
content reasonably acceptable to the Agent and the
Banks;
(9) An opinion of each of Rudd Watts &
Stone, counsel to the New Zealand Guarantors, and
Russell McVeagh, counsel to the Agent and the
Banks, each addressed to the Agent, the Issuing
Bank, the Banks and the International Swing Line
Banks and in form and content reasonably acceptable
to the Agent and the Banks;
(10) An opinion of Pinheiro
Neto-Adrogados, counsel to the Brazilian
Guarantors, addressed to the Agent, the Issuing
Bank, the Banks and the International Swing Line
Banks and in form and content reasonably acceptable
to the Agent and the Banks;
(11) An opinion of Franck, Galicia,
Duclaudy Robles, S.C., counsel to the Mexican
Guarantors, addressed to the Agent, the Issuing
Bank, the Banks and the International Swing Line
Banks and in form and content reasonably acceptable
to the Agent and the Banks;
(12) An opinion of Gernandt & Danielson,
counsel to the Swedish Guarantors, addressed to the
Agent, the Issuing Bank, the Banks and the
International Swing Line Banks and in form and
content reasonably acceptable to the Agent
and the Banks;
(13) An opinion of Plesner & Lunoe,
counsel to the Danish Guarantors, addressed to the
Agent, the Issuing Bank, the Banks and the
International Swing Line Banks and in form and
content reasonably acceptable to the Agent and the
Banks; and
(14) An opinion of Blum Manfrini
Gaillard, counsel to the Swiss Guarantors,
addressed to the Agent, the Issuing Bank, the Banks
and the International Swing Line Banks and in form
and content reasonably acceptable to the Agent and
the Banks;
(v) Payment of Fees. Evidence of payment by the
Companies of all accrued unpaid and reasonable and necessary fees,
costs and expenses to the extent then due and payable on the Effective
Date, together with Attorney Costs of the Agent to the extent invoiced
30 days prior to the Effective Date (provided that such payment shall
not thereafter preclude the billing of additional amounts incurred
thereafter) including any such costs, fees and expenses arising under
or referenced in Sections 2.14 and 11.4;
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(vi) Support Documents. Each of the Guaranties and the
other Support Documents, in each case executed by the appropriate
Company or Subsidiary;
(vii) Certificate. A certificate signed by a Responsible
Officer of each Company, dated as of the Effective Date, stating that:
(1) the representations and warranties contained
in Article VI and in the other Loan Documents are true and
correct on and as of such date, as though made on and as of
such date;
(2) no Default or Event of Default exists or
would result from the initial Borrowing or Issuance; and
(3) there has occurred since March 31, 1996 no
event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect;
(viii) Existing Credit Agreement. Evidence that prior to
or contemporaneously with the initial Borrowing or Issuance
hereunder all obligations of Danka PLC and Danka Holding under or in
connection with the Existing Credit Agreement shall have been paid in
full and satisfied and the Existing Credit Agreement shall have been
terminated except as to any provisions thereof which survive such
termination;
(ix) Acquisition. Evidence satisfactory to the Agent of
the acquisition by Danka PLC and its Subsidiaries of the Acquired
Business in accordance with terms of the Kodak Acquisition Documents;
(x) Opening Balance Sheet. An opening balance sheet in
form and detail reasonably acceptable to the Agent showing, inter
alia, the amount of Investments in each Subsidiary as of the Effective
Date;
(xi) Ownership Structure. A certificate of a
Responsible Officer of Danka PLC, dated as of the Effective Date,
setting forth the proper name, jurisdiction of formation, type of
entity, type (s) of authorized and issued equity interests, identity
of ownership of equity interests, and (as to equity interests required
to be subject to a Pledge Agreement only) identifying information as
to share certificates or other evidences of ownership of equity
interests with respect to all Subsidiaries pledged thereunder;
(xii) International Swing Line Agreements. Certified
copies of the duly executed International Swing Line Agreements,
together with such other documents related thereto as shall be
delivered to either of the International Swing Line Banks in
connection therewith; and
(xiii) Other Documents. Such other approvals, opinions,
documents or materials as the Agent or any Bank may reasonably
request;
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(b) There shall not have occurred or become known to the Agent or
any of the Banks any event, condition, litigation, action, suit, investigation
or other arbitral, administrative or judicial proceeding or other situation or
status since the date of the information contained in the financial and
business projections, budgets, pro forma data and forecasts concerning Danka
PLC and its Subsidiaries, or of the Acquired Business, delivered to the Agent
prior to the Effective Date that (x) has had or could reasonably be expected to
result in a Material Adverse Effect or materially adversely affect the
business, properties, operations or condition, financial or otherwise, of the
Acquired Business, taken as a whole or (y) does or could reasonably be expected
to restrain or enjoin or otherwise materially and adversely affect the ability
of any Person to fulfill their respective obligations under the Kodak
Acquisition Documents; and
(c) Each Company, its Subsidiaries, and Kodak and its Subsidiaries
shall have received all approvals, consents and waivers (including the
expiration of early termination of any waiting period without notice of intent
to challenge or request for further information by any Governmental Authority),
and shall have made or given all necessary filings and notices, as shall be
required to consummate the transactions contemplated hereby and by the Kodak
Acquisition Documents except for such approvals, consents, waivers, filings and
notices as to which the failure to receive, make or give will not have a
Material Adverse Effect or materially adversely affect the business,
properties, operations or condition, financial or otherwise, of the Acquired
Business, taken as a whole.
5.3 Conditions to All Credit Extensions. The obligation of each
Bank and each Designated Bidder to make any Loan to be made by it (including
its initial Loan) other than, so long as no Event of Default shall have
occurred and be continuing, the continuation or conversion of any Loan
previously made (which shall remain subject to the limitations contained in
Article II), and the obligation of the Issuing Bank to Issue any Letter of
Credit (including the initial Letter of Credit), other than, so long as no
Event of Default shall have occurred and be continuing, the renewals of
existing Letters of Credit, is subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or Issuance Date:
(a) Irrevocable Notice of Syndicated Activity. L/C
Application. For each Syndicated Loan, the Agent shall have received
(with, in the case of the initial Syndicated Loan only, a copy for
each Bank) an Irrevocable Notice of Syndicated Activity and, in the
case of any Issuance of any Letter of Credit, the Issuing Bank and the
Agent shall have received an L/C Application or L/C Amendment
Application;
(b) Continuation of Representations and Warranties.
The representations and warranties in Article VI and in the other Loan
Documents shall be true and correct on and as of such Borrowing Date
or Issuance Date with the same effect as if made on and as of such
Borrowing Date or Issuance Date (except (i) to the extent such
representations and warranties expressly refer to an earlier date, in
which case they shall be true and correct as of such earlier date,
(ii) that references to financial statements described in Sections
6.10(a) and (b) shall be to the financial statements most recently
furnished pursuant to Section 7.1(a), and (iii) that the reference to
March 31, 1996 in Section 6.10(c) shall refer
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to the date of the financial statements most recently furnished
pursuant to Section 7.1(a) or (b)); and
(c) No Existing Default. No Default or Event of
Default shall exist or shall result from such Borrowing or Issuance.
Each Irrevocable Notice of Syndicated Activity and L/C Application or L/C
Amendment Application submitted by any Company hereunder shall constitute a
representation and warranty by each Company hereunder, as of the date of each
such notice and as of each Borrowing Date, or Issuance Date, as applicable,
that the conditions in this Section 5.3 are satisfied, unless such submission
shall be accompanied by a certification to the Agent of a Responsible Officer
of a Company (i) specifying which of the conditions of this Section 5.3 are not
satisfied and describing in reasonable detail the circumstances relating
thereto, and (ii) certifying that (x) such submission is permitted to be made
hereunder as a continuation or conversion of a Loan previously made or as a
renewal of an existing Letter of Credit and (y) no Event of Default exists as
of the date of such submission.
5.4 Supplements to Schedules. The Companies may, from time to
time but in no event less than five (5) Business Days prior to delivery of any
Irrevocable Notice of Syndicated Activity hereunder, amend or supplement
Schedules 6.5, 6.10, 6.12 and 6.16 to this Agreement by delivering (effective
upon receipt) to the Agent and each Bank a copy of such revised Schedule or
Schedules which shall (i) be dated the date of delivery, (ii) be certified by a
Responsible Officer as true, complete and correct as of such date and as
delivered in replacement for the corresponding Schedule or Schedules previously
in effect, and (iii) show in reasonable detail (by blacklining or other
appropriate graphic means) the changes from each such corresponding predecessor
Schedule. Notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents, in the event that the Majority Banks determine
based upon such revised Schedules (whether individually or in the aggregate or
cumulatively) that there has been a material adverse change since the Closing
Date, or such later date as the Companies shall have most recently furnished
supplements to Schedules under this Section 5.4 or financial statements under
Section 7.1(a) or (b), in the business, operations or affairs, financial or
otherwise, of Danka PLC and its Subsidiaries, taken as a whole, the Banks shall
have no further obligation to fund Credit Extensions or International Swing
Line Advances or International Swing Line Participations hereunder, other than,
so long as no Event of Default shall have occurred and be continuing, the
continuation or conversion of any Loan previously made (which shall remain
subject to the limitations contained in Article II) or renewals or extensions
of existing Letters of Credit.
5.5 Conditions of Initial Swing Line Extensions of Credit. The
obligation of each International Swing Line Bank to make, and of each Bank to
participate in, the International Swing Line Loans is subject to the conditions
that the conditions in this Section 5.5 shall have been satisfied on or before
December 31, 1996 and that the Agent and each International Swing Line Bank
shall have received, on or before the initial extension of credit, all of the
following, in form and substance satisfactory to the Agent, each International
Swing Line Bank and each Bank:
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(i) International Swing Line Agreements. Certified
copies of the duly executed International Swing Line Agreements,
together with such other documents related thereto as shall be
delivered to either of the International Swing Line Banks in
connection therewith; and
(ii) Other Documents. Such other approvals, opinions,
documents or materials as the Agent, any International Swing Line Bank
or any Bank may reasonably request.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each Company represents and warrants to the Agent and each Bank that:
6.1 Existence and Power. Such Company and each of its
Subsidiaries:
(a) is a corporation, partnership or limited liability
company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation;
(b) has the power and authority and governmental
licenses, authorizations, consents and approvals to own its assets,
carry on its business and to execute, deliver, and perform its
obligations under the Loan Documents;
(c) is duly qualified and is licensed and in good
standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires
such qualification or license, except to the extent failure to so
qualify would not have a Material Adverse Effect; and
(d) is in compliance with all Requirements of Law,
except to the extent the failure to so comply would not have a
Material Adverse Effect.
6.2 Authorization; No Contravention. The execution, delivery and
performance by such Company and its Subsidiaries of this Agreement and each
other Loan Document to which such Person is party have been duly authorized by
all necessary action and do not and will not:
(a) contravene the terms of any of that Person's
Organization Documents;
(b) conflict with or result in a material breach or
contravention of, or the creation of any Lien under, any document
evidencing any material Contractual Obligation to which such Person is
a party or any order, injunction, writ or decree of any Governmental
Authority to which such Person or its property is subject; or
(c) violate any Requirement of Law.
6.3 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, such Company or
any of its Subsidiaries of the Agreement or any other Loan Document.
6.4 Binding Effect. This Agreement and each other Loan Document
to which such Company or any of its Subsidiaries is a party constitute the
legal, valid and binding obligations
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of such Company and any of its Subsidiaries to the extent it is a party
thereto, enforceable against such Person in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability), except for
such Subsidiaries (other than any Company) such that, after the exclusion of
such Subsidiaries from the provisions of this Section 6.4, this Section 6.4
would remain true and correct for the Companies and such Subsidiaries to which
is attributable not less than 85% of each of the consolidated revenues and the
consolidated assets of Danka PLC and its Subsidiaries determined at the end of
the most recently ended fiscal year both before and after giving effect to such
exclusion.
6.5 Litigation: Labor Controversies. There are no actions, suits,
labor controversies, proceedings, claims or disputes pending, or to the best
knowledge of such Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against such Company, or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or
any other Loan Document, or any of the transactions contemplated
hereby or thereby; or
(b) if determined adversely to such Company or its
Subsidiaries, would reasonably be expected to have a Material Adverse
Effect, except as set forth in Schedule 6.5.
No injunction, writ, temporary restraining order or order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin
or restrain the execution, delivery or performance of this Agreement or any
other Loan Document, or directing that the transactions provided for herein or
therein not be consummated as herein or therein provided.
6.6 No Default. No Default or Event of Default exists or would
result from the incurring of any Obligations by such Company. As of the
Closing Date, neither such Company nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation in any respect which,
individually or together with all such defaults, could reasonably be expected
to have a Material Adverse Effect, or that would, if such default had occurred
after the Closing Date, create an Event of Default under Section 9.1(e).
6.7 Use of Proceeds; Margin Regulations. The Credit Extensions
are to be used solely for the repayment of the Existing Notes in full, the
acquisition of the Acquired Business in accordance with the terms of the Kodak
Acquisition Documents and for general corporate purposes, including
Acquisitions, and in the case of Term Loan Outstandings, to support the
issuance of FIPs and satisfaction of FIP Holder Payments. Neither such Company
nor any of its Subsidiaries is generally engaged in the business of purchasing
or selling Margin Stock or extending credit for the purpose of purchasing or
carrying Margin Stock. Less than 25% of the Property of the Companies and
their Subsidiaries consists of Margin Stock. The proceeds of International
Swing Line Loans shall be used for general corporate purposes.
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6.8 Title to Properties. Such Company and each of its
Subsidiaries have good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of their respective businesses, except for such defects in title as
could not, individually or in the aggregate, have a Material Adverse Effect.
As of the Closing Date, the property of such Company and its Subsidiaries is
subject to no Liens, other than Liens permitted under Section 8.2.
6.9 Taxes. Such Company and its Subsidiaries have filed all
Federal and other material tax returns and reports required to be filed, and
have paid all Federal and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
such Company or any of its Subsidiaries that would, if made, have a Material
Adverse Effect.
6.10 Financial Condition.
(a) The audited consolidated financial statements of
Danka PLC and its Subsidiaries dated March 31, 1995 and March 31, 1996
and the unaudited consolidated financial statements of Danka PLC and
its Subsidiaries dated June 30, 1996, and the related consolidated
statements of income or operations, shareholders' equity and cash
flows for the fiscal periods ended on such dates:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, subject in the
case of the June 30, 1996 statements to ordinary, good faith
year end audit adjustments;
(ii) present fairly the financial condition of
Danka PLC and its Subsidiaries as of the dates thereof and
results of operations for the periods covered thereby, subject
in the case of the June 30, 1996 statements to ordinary, good
faith year end audit adjustments; and
(iii) except as specifically disclosed in Schedule
6.10, show all material indebtedness and other liabilities,
direct or contingent, of Danka PLC and its consolidated
Subsidiaries as of the date thereof, including liabilities for
taxes, material commitments and Contingent Obligations, which
are required to be disclosed in accordance with GAAP.
(b) The audited consolidated financial statements of
Danka Holding and its Subsidiaries dated March 31, 1995 and March 31,
1996, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for the fiscal periods ended on
such dates:
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(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein;
(ii) present fairly the financial condition of
Danka Holding and its Subsidiaries as of the dates thereof and
results of operations for the periods covered thereby; and
(iii) except as specifically disclosed in Schedule
6.10, show all material indebtedness and other liabilities,
direct or contingent, of Danka Holding and its consolidated
Subsidiaries as of the date thereof, including liabilities for
taxes, material commitments and Contingent Obligations, which
are required to be disclosed in accordance with GAAP.
(c) Since March 31, 1996, there has been no Material
Adverse Effect.
(d) The Pro Forma Historical Statements provided to the
Agent and the Banks fairly present the historical pro forma financial
condition and results of operations of Danka PLC and its Subsidiaries
for the respective periods covered thereby, after giving effect to the
acquisition of the Acquired Business.
(e) The Pro Forma Projections provided to the Agent and
the Banks were prepared by Danka PLC in good faith and are based upon
assumptions which Danka PLC believed to have been reasonable in all
material respects as of the time of preparation thereof and as of the
Closing Date.
6.11 Support Documents.
(a) The provisions of each of the Support Documents
(and the actions contemplated to be taken thereunder) are effective to
create in favor of the Agent for the benefit of the Banks, a legal,
valid and enforceable (i) guaranty of the obligations described
therein except as limited by bankruptcy, insolvency and similar laws
affecting the enforcement of creditors' rights generally and equitable
principles of general application and (ii) duly perfected pledge of
all ownership interest (other than directors' qualifying shares) in
the Subsidiaries described in Schedule IV, except for the Support
Documents (or the absence thereof) of such Subsidiaries (other than
any Company) such that, after the exclusion of such Subsidiaries from
the provisions of this Section 6.11(a), this Section 6.11(a) would
remain true and correct for the Subsidiaries to which, together with
the Companies, is attributable not less than 85% of each of the
consolidated revenues and the consolidated assets of Danka PLC and its
Subsidiaries determined as of the end of the most recently ended
fiscal year both before and after giving effect to such exclusion.
(b) All representations and warranties of such
Company's Subsidiaries contained in the Support Documents are true and
correct in all material respects.
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6.12 Copyrights, Patents, Trademarks and Licenses, etc. Such
Company and its Subsidiaries own or are licensed or otherwise have the right to
use all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective businesses, without material
conflict with the rights of any other Person. To the best knowledge of such
Company, no slogan or other advertising device, product, process, method,
substance, part or other material now employed by such Company or any of its
Subsidiaries infringes in any material respect upon any rights held by any
other Person. Except as specifically disclosed in Schedule 6.12, no claim or
litigation regarding any of the foregoing is pending or known to be threatened,
and no patent, invention, device, application, principle, statute, law, rule,
regulation, standard or code is pending or, to the knowledge of such Company,
proposed, which, in either case, could reasonably be expected to have a
Material Adverse Effect.
6.13 Subsidiaries. As of the Closing Date, such Company has no
Subsidiaries other than those specifically disclosed (and identified as being
Subsidiaries of such Company) in part (a) of Schedule 6.13 and has no equity
investments in any other corporation or entity other than those specifically
disclosed in Part (b) of Schedule 6.13.
6.14 Insurance. The Properties of such Company and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of any Company, in such amounts, with such deductibles
and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where such
Company or such Subsidiary operates; provided, however, Danka PLC and its
Subsidiaries may maintain self insurance as to risks of the types and in the
amounts (and with such reserves) as are customarily maintained by Persons
conducting similar businesses in the same localities.
6.15 ERISA Compliance.
(a) All pension plans governed by laws other than the
laws of the United States have been funded in amounts at least equal
to the present value of the probable liabilities of the Companies and
their Subsidiaries thereunder.
(b) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or
state law. Each Plan which is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from
the IRS and to the best knowledge of the Companies, nothing has
occurred which would cause the loss of such qualification. Danka
Holding and each ERISA Affiliate has made all required contributions
to any Plan subject to Section 412 of the Code, and no application for
a funding waiver or an extension of any amortization period pursuant
to Section 412 of the Code has been made with respect to any Plan.
(c) There are no pending or, to the best knowledge of
the Companies, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan which has
resulted or could reasonably be expected to result in a
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Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect.
(d) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no Pension Plan has any Unfunded Pension
Liability; (iii) neither Danka Holding nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV
of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA) (iv) neither such Company
nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) neither such Company nor any ERISA Affiliate has engaged
in a transaction that could be subject to Section 4069 or 4212(c)
of ERISA.
6.16 Environmental Matters. The Companies have reasonably
concluded that, except as specifically disclosed in Schedule 6.16,
Environmental Laws and Environmental Claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.17 Regulated Entities. None of such Company, any Person
controlling such Company, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. Such Company is not subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal, state or foreign statute or regulation limiting its ability to
incur Indebtedness.
6.18 No Burdensome Restrictions. Neither such Company nor any of
its Subsidiaries is a party to or bound by any Contractual Obligation, or
subject to any restriction in any Organization Document, or any Requirement of
Law, which could reasonably be expected to have a Material Adverse Effect.
6.19 Full Disclosure. Neither this Agreement nor any other Loan
Document or certificate or document executed and delivered by or on behalf of
any Company or any Subsidiary in accordance with Section 5.1 (other than
Section 5.1(vi) and (vii)) or Section 5.2 contains any misrepresentation or
untrue statement of material fact or omits to state a material fact necessary,
in light of the circumstance under which it was made, in order to make any such
representation or statement contained therein not misleading in any material
respect.
6.20 Immunity. The Companies and the Guarantors are generally
subject to suit and none of them nor any of their properties or revenues enjoys
any right of immunity from judicial proceedings.
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6.21 Certain Agreements Paid in Full. From and after the Effective
Date, all liabilities under the Existing Credit Agreement will have been paid
in full and such agreement will have been terminated except as to any provision
thereof which survives such termination.
6.22 Existing Indebtedness. The Obligations are senior in right of
payment to all Subordinated Indebtedness and are not by their terms
subordinated in right of payment to any other Indebtedness of any Company.
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ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in
writing:
7.1 Financial Information, Reports, Notices, etc. The Companies
will furnish, or will cause to be furnished, to the Agent copies, with
sufficient copies for the Banks, of the following financial statements,
reports, notices and information:
(a) as soon as available and in any event within 60
days after the end of each of the first three fiscal quarters of each
fiscal year of Danka PLC, (x) the consolidated balance sheets of Danka
PLC and its Subsidiaries, and (y) commencing with the fiscal quarter
ending March 31, 1998, the consolidated balance sheets of each other
Company and its Subsidiaries, as of the end of such fiscal quarter and
(x) consolidated statements of earnings and cash flow of Danka PLC and
its Subsidiaries and (y) commencing with the fiscal quarter ending
March 31, 1998, consolidated statements of earnings of each other
Company and its Subsidiaries, for such fiscal quarter and for the
period commencing at the end of the previous fiscal year and ending
with the end of such fiscal quarter, such balance sheets and
statements of earnings and cash flow, where required, in the case of
Danka PLC and its Subsidiaries, to be prepared in accordance with GAAP
in a manner consistent with past practices of Danka PLC, certified by
the chief financial officer, treasurer or the secretary-controller of
Danka PLC;
(b) as soon as available and in any event within 120
days after the end of each fiscal year of Danka PLC, (x) a copy of the
annual audit report for such fiscal year for Danka PLC and its
Subsidiaries, including therein the consolidated balance sheet of
Danka PLC and its Subsidiaries as of the end of such fiscal year and
consolidated statements of earnings and cash flow of Danka PLC and its
Subsidiaries for such fiscal year, (y) commencing with the fiscal year
ending March 31, 1998, the consolidated balance sheet as at such
fiscal year end and the related consolidated statements of earnings
for such fiscal year, of Dankalux and its Subsidiaries, and (z)
commencing with the fiscal year ending March 31, 1998, the
consolidated balance sheet as at such fiscal year end and the related
consolidated statements of earnings for such fiscal year, of each
other Company and its Subsidiaries, in each case, with respect to the
consolidated statements of Danka PLC and its Subsidiaries only,
certified without any Impermissible Qualification by KPMG Audit PLC
or other internationally recognized independent public accountants,
together with a certificate from such accountants to the effect that
(i) the consolidated financial statements have been prepared in
accordance with GAAP consistently applied and present fairly the
financial condition and results of operations of Danka PLC and its
Subsidiaries and (ii) in making the examination necessary for the
signing of such annual report by such accountants, they have not
become aware of any Default or Event of Default that has
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occurred and is continuing, or, if they have become aware of such
Default or Event of Default, describing such Default or Event of
Default and the steps, if any, being taken to cure it;
(c) together with the financial statements furnished
under preceding clauses (a) and (b), a certificate substantially in
the form of Exhibit B, as the same may be amended, modified or
supplemented from time to time (the "Compliance Certificate"), signed
by the treasurer, the chief financial officer, the
secretary-controller or the chief executive officer of Danka PLC dated
the date of such annual or such quarterly financial statement, as the
case may be, to the effect that no Default or Event of Default has
occurred and is continuing, or, if there is any such event, describing
it and the steps, if any, being taken to cure it, and containing a
computation of each of the financial ratios and restrictions contained
in Article VIII;
(d) promptly and in any event within 30 days after
receiving such reports, copies of all management reports submitted to
a Company by its independent public accountants in connection with
each audit made by such accountants of the books of a Company or any
Subsidiary;
(e) as soon as possible and in any event within five
Business Days of any material change in its customary accounting
practices, notice thereof and copies of all documentation relating
thereto;
(f) as soon as possible and in any event within ten
Business Days after such Company has become aware of the occurrence of
each Default or Event of Default, a statement of a Responsible Officer
of such Company setting forth details of such Default or Event of
Default and the action which such Company has taken and proposes to
take with respect thereto;
(g) as soon as possible and in any event within 10
Business Days after (x) such Company has become aware of the
occurrence of any known material adverse development with respect to
any litigation, action, proceeding or labor controversy described in
Section 6.5 or (y) the commencement of any known labor controversy,
litigation, action or proceeding of the type described in Section
6.5, notice thereof and copies of all documentation relating thereto;
(h) as soon as possible and in any event within 30 days
after the sending or filing thereof, copies of all reports which Danka
PLC sends to any of its security holders, and all reports and
registration statements which any Company or any of its Subsidiaries
files with the Securities and Exchange Commission or any national
(including any foreign) securities exchange;
(i) immediately upon becoming aware of the occurrence
of any of the following events affecting Danka Holding or any ERISA
Affiliate (but in no event more
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than 10 Business Days after such event), notice with respect to
the occurrence of any of the following:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code
by such Company or any ERISA Affiliate; or
(iv) the adoption of any amendment to a Plan
subject to Section 412 of the Code, if such amendment results
in a material increase in contributions or Unfunded Pension
Liability;
(j) immediately upon becoming aware of any other event
or circumstance (but in no event more than 10 Business Days after such
event or circumstance) which has had or is reasonably likely to have a
Material Adverse Effect (without, for purposes of this notice
provision, giving effect to the proviso contained in the definition of
"Material Adverse Effect"), notice thereof and copies of all
documentation relating thereto;
(k) within 10 Business Days after the confirmed loss of
any contracts with a vendor the sales under which contracts aggregate
at least 15% of the revenues of Danka PLC and its Subsidiaries for the
most recent four fiscal quarter period, notice thereof;
(l) promptly after the issuance of any guaranty in
excess of $10,000,000 for the benefit of any Person, notice thereof
and copies of all documentation relating thereto;
(m) within 125 days after the end of each fiscal year,
a list of all Subsidiaries and the country in which each was organized
and the country in which each is doing business together with
sufficient information to determine whether (i) such Subsidiaries are
Excluded Country Subsidiaries or Inactive Subsidiaries and (ii) any
country has become an Included Country; and
(n) such other information respecting the financial
condition or operations of each Company or any of its Subsidiaries as
any Bank through the Agent may from time to time reasonably request.
7.2 Compliance with Laws, etc. Each Company will, and will cause
each of its Subsidiaries to, comply in all material respects with applicable
laws, rules, regulations and orders, such compliance to include (without
limitation):
(a) the maintenance and preservation of its corporate
existence and qualification as a foreign corporation where such
qualification is appropriate and, as to
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qualification only, where the failure to be so qualified would have or
be reasonably likely to have a Material Adverse Effect on such Person
(for purposes of this Section 7.2(a), "Material Adverse Effect" shall
be applied (x) without reference to the proviso contained in the
definition thereof and (y) all references to any Company or any
Subsidiary shall be deemed to refer solely to such Person); and
(b) the payment, before the same become delinquent, of
all material taxes, assessments and governmental charges imposed upon
it or upon its property the failure to pay or satisfy which could
reasonably be expected to have a Material Adverse Effect, except to
the extent being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.
7.3 Maintenance of Properties. Each Company will, and will cause
each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make necessary and
required repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless such Company
determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable, except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
7.4 Insurance. Each Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its material properties and business
(including business interruption insurance) against such casualties and
contingencies and of such types and in such amounts as is customary in the case
of similar businesses and will, upon request of the Agent or any Bank, furnish
to each Bank at reasonable intervals a certificate of a Responsible Officer of
such Company setting forth the nature and extent of all insurance maintained by
such Company and its Subsidiaries in accordance with this Section.
7.5 Books and Records. Each Company will, and will cause each of
its Subsidiaries to, keep books and records which accurately reflect in all
material respects all of its business affairs and transactions and (i) so long
as no Default or Event of Default has occurred and is continuing, upon 10
Business Days' notice and (ii) at any time after the occurrence and during the
continuance of a Default or Event of Default, permit the Agent and each Bank or
any of their respective representatives to visit all of its offices during
normal business hours, to discuss its and its Subsidiaries' financial matters
with its principal executive officers and independent public accountants (and
each Company hereby authorizes such independent public accountants to discuss
such Company's and its Subsidiaries' financial matters with each Bank or its
representatives whether or not any representative of such Company is present)
and to examine (and photocopy extracts from) any of its books or other
corporate records. Each Company shall pay any photocopy charges (or such
Company shall provide photocopies) and any fees of such independent public
accountants incurred in connection with the Agent's or any Bank's exercise of
its rights pursuant to this Section at any time after the occurrence and during
the continuance of a Default or Event of Default.
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7.6 Maintenance of Existence, etc. Subject to the provisions of
Section 8.7, each Company will, and will cause each of its Subsidiaries to,
conduct its business as it is conducted as of the Closing Date subject to
changes in the ordinary course and do such things as are reasonably necessary
to maintain, preserve, renew and keep in full force and effect its rights,
privileges, licenses, patents, patent rights, copyrights, trademarks, trade
names, franchises and other authority to the extent material and necessary for
the conduct of its respective business in the ordinary course as conducted from
time to time.
7.7 Intercompany Loans. Each Company will cause each intercompany
loan or advance (other than accounts receivable or accounts payable created in
the ordinary course of business) by such Company to any Guarantor or by any of
such Company's Subsidiaries to any Guarantor or to such Company to be
accurately recorded on and evidenced at all times by the books and records of
each of the obligor and obligee of such intercompany loan or advance.
7.8 Additional Support Documents. Each Company will cause (i)
every Included Country Operating Company and every Included Country Holding
Company (excluding Dankalux Sarl, Danka Luxembourg Sarl and Restricted
Subsidiaries) whether on the Effective Date or thereafter, to execute and
deliver, (x) as promptly as practicable but in any event within 90 days after
(A) the creation or Acquisition of any such Subsidiary operating in a country
that is an Included Country at the time of its creation or Acquisition, or (B)
such Subsidiary ceasing to be an Inactive Subsidiary, or (y) within 90 days
after any country becomes an Included Country, a Guaranty, and (ii) each Person
owning any equity interest (other than directors' qualifying shares) in each
such Included Country Operating Company and each such Included Country Holding
Company not owned by Dankalux Sarl or Restricted Subsidiaries to execute and
deliver within the time period specified in clause (i) above a Pledge Agreement
(or supplement to an existing Pledge Agreement of such Person) pledging such
equity interest, together with such resolutions, stock certificates, opinions
of counsel, incumbency certificates and other documentation as the Agent may
reasonably require. Notwithstanding the foregoing provisions of this Section
7.8 and the definitions of "Included Country" and "Excluded Country" contained
herein,
(i) it is the intent of the parties hereto that
not less than 85% of each of the consolidated revenues and the
consolidated assets of Danka PLC and its Subsidiaries for
every fiscal year during the term of this Agreement shall be
attributable to the operations and assets of the Companies and
the Guarantors and, in furtherance thereof, if at any time the
addition of Guarantors shall be required to meet such
thresholds, then the Companies shall promptly notify the Agent
of such event which shall identify such additional country or
countries which are to be treated as Included Countries, and
shall promptly cause to be executed and delivered such
additional Guaranties of all resulting Included Country
Operating Companies and Included Country Holding Companies
pertaining to such additional country or countries,
appropriate Pledge Agreements (or supplements to existing
Pledge Agreements), and related documents described in the
first sentence of this Section 7.8; and
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(ii) in the event that, with respect to countries
that become Included Countries after the date hereof (other
than by election of the Companies pursuant to the immediately
preceding clause (i)), the laws of, or action by a competent
Governmental Authority in, the applicable Included Country (a
"Governmental Impairment") shall prohibit or would render
unenforceable the Guaranties or Pledge Agreements otherwise
required to be furnished pursuant to the first sentence of
this Section 7.8, then the Companies shall not be deemed to be
in default in the performance of the provisions of this
Section 7.8 if (A) the Companies shall (x) give prompt (but in
no event later than 30 days after the creation or acquisition
of such Subsidiary or such country becoming an Included
Country) notice of the existence of any Governmental
Impairment to the Agent, and (y) use, and cause the affected
Subsidiaries to use, their best efforts to eliminate or cure
the circumstances giving rise to such Governmental Impairment,
and (B) excluding the Subsidiaries which remain subject to
Governmental Impairments, not less than 85% of each of the
consolidated revenues and the consolidated assets of Danka PLC
and its Subsidiaries determined as at the end of the most
recently ended fiscal year both before and after giving effect
to such exclusion shall be attributable to the operations and
assets of the Companies and the Guarantors. The Companies
shall not make any Investments in any Guarantor (or in any
Person which upon giving effect to such Investment would
result in such Subsidiary being required to become a
Guarantor), if the Guaranty of such Guarantor is limited as to
amount unless the Majority Banks shall deem such Guaranty (or
a Substitute Guaranty provided by such Guarantor together with
such resolutions, opinions of counsel, incumbency certificates
and other documentation as the Agent may require) in a
sufficient amount (it being agreed that the Guaranties
delivered and accepted as of the Effective Date are in a
sufficient amount). At any time if the Majority Banks request
a replacement Guaranty from a Guarantor, which has previously
delivered a Guaranty in a limited amount, in a greater amount
and the net worth of such Guarantor shall have increased
materially since the delivery of its Guaranty, the Companies
shall cause to be delivered to the Agent such a Guaranty in
such greater amount as the Majority Banks may request, if
permitted by applicable law, together with such resolutions,
opinions of counsel, incumbency certificates and other
documentation as the Agent may reasonably request.
7.9 Compliance with ERISA. Each Company will, and will cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Code, if the failure to
do any or all of the foregoing could reasonably be expected to have a Material
Adverse Effect.
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7.10 Release of Pledge.
(a) In connection with any merger or consolidation
transaction permitted under Section 8.7 and in which transaction any
Person whose equity interests have been pledged to the Agent pursuant
to any Support Document shall not be the survivor thereof, upon the
written request to the Agent by, and at the expense of, the Companies,
the Agent shall take such action as shall be necessary, without
impairing any remaining rights under the Loan Documents, to release
such equity interests from such pledge under the applicable Support
Documents; provided, however, that substantially simultaneously with
such release the Agent shall receive such Support Documents and
related share certificates, evidences of registration of lien,
opinions and other items as the Agent may reasonably require
conferring upon the Agent (or providing assurances as to) a perfected
lien (of substantially equivalent or higher priority as the released
lien) in the equity interests (other than directors' qualifying
shares) of such resulting or surviving entity.
(b) Upon the occurrence of the long-term unsecured,
unenhanced debt of Danka PLC achieving the ratings described in clause
(i) of the definition of "Override Period," and provided no Default or
Event of Default shall then exist or continue, the Agent, at the
request and expense of the Companies, shall release the Liens
conferred under the Pledge Agreements, terminate the Pledge
Agreements, and take such additional actions as the Companies may
reasonably request to terminate or release such Liens of record in
applicable jurisdictions. No such release or termination shall
impair, excuse, discharge or otherwise diminish the Obligations or the
obligations and liabilities of any Company or any Guarantor hereunder
or under any Note or any Guaranty or with respect to International
Swing Line Obligations.
7.11 Swap Contracts. Within 90 days of the Effective Date, the
Companies shall enter into Swap Contracts or other similar arrangements
providing protection from material fluctuations in interest rates on the Loans,
such Swap Contracts to be in an aggregate notional amount and on such other
terms as shall be reasonably acceptable to the Agent.
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ARTICLE VIII
NEGATIVE COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in
writing:
8.1 Business Activities. Each Company will not, and will not
permit any of its Subsidiaries to, engage in any business activity, except
selling, leasing, renting and servicing photocopiers, typewriters, facsimile
and other automated office equipment and parts, services and supplies,
networking, outsourcing, facilities management and such other activities as
such Company is presently engaged in subject to changes in the ordinary course,
and such activities as may be incidental or related thereto.
8.2 Liens.
(a) Negative Pledge. Each Company will not, and will
not permit any Subsidiary to, cause or permit, or agree or consent to
cause or permit in the future (upon the happening of a contingency or
otherwise), any of their respective Property whether now owned or
hereafter acquired, to be subject to a Lien except the following (none
of which (except as expressly permitted under the Pledge Agreements)
shall be permitted to exist in respect of any collateral pledged to
the Agent under any of the Loan Documents):
(i) Liens securing taxes, assessments or
governmental charges or levies or the claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and
other like Persons and Liens arising by operation of law, in
each case securing amounts not yet due;
(ii) Liens incurred or deposits made in the
ordinary course of business:
(a) (1) in connection with worker's
compensation, unemployment insurance, social
security and other like laws; and (2) to secure the
performance of letters of credit, bids, tenders,
sales contracts, leases, statutory obligations,
surety and performance bonds (of a type other than
as set forth in Section 8.2(a)(iii)) and other
similar obligations not incurred in connection with
the borrowing of money, the obtaining of advances
or the payment of the deferred purchase price of
Property;
(b) in connection with the purchasing of
Inventory; provided, that any such purchase of
Inventory is incidental to the conduct of the
business of such Company or such Subsidiary in
accordance with its then current business
practices, such Liens are in the nature of a
vendor's lien or a reservation of title and the
obligations secured by such Liens are
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trade payables incurred in the ordinary course of
such Company's or such Subsidiary's business and,
after giving effect thereto, no Default or Event of
Default would exist under Section 8.3; and
(c) in connection with account netting
and other similar treasury management functions;
(iii) Liens:
(a) arising from judicial attachments
and judgments,
(b) securing appeal bonds or
supersedeas bonds, or
(c) arising in connection with court
proceedings (including, without limitation, surety
bonds and letters of credit or any other instrument
serving a similar purpose);
provided, that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are
being actively contested in good faith and by appropriate
proceedings; and provided, further that the aggregate amount
so secured will not at any time exceed $10,000,000;
(iv) Liens on Property of a Subsidiary; provided,
that such Liens secure only obligations owing to a Company;
(v) Liens in the nature of reservations,
exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other similar
title exceptions or encumbrances affecting real Property,
provided, that such exceptions and encumbrances do not
materially interfere with the use of such Properties in the
ordinary conduct of the owning Person's business;
(vi) Liens in existence on the date hereof, more
specifically described on Schedule 8.2(a)(vi);
(vii) Liens on Property acquired, modified or
constructed by (or assumed by) such Company or any Subsidiary
after the date hereof (or, as to property acquired in an
Acquisition, by the predecessor in interest in such Property)
to secure Indebtedness of such Company or such Subsidiary
incurred in connection with such acquisition, modification or
construction (whether by way of a capital lease or otherwise);
provided, that:
(a) no such Lien shall extend to or
cover any Property other than the Property being
acquired, modified or constructed,
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(b) no such Lien shall secure
Indebtedness in an amount exceeding 100% (or in the
case of real estate 95%) of the cost of
acquisition, modification or construction of the
particular Property to which such Indebtedness
relates,
(c) such Lien shall be created by such
Company or such Subsidiary (or, as to property
acquired in an Acquisition, by the predecessor in
interest in such Property) concurrently with or
within one hundred twenty (120) days of such
acquisition, modification or construction, and
(d) no Event of Default shall exist at
the time of or after giving effect to such
acquisition, modification or construction;
(viii) Liens on receivables sold pursuant
to Section 8.8(a) or (c) and related Liens on the assets
leased or sold to the obligor of such receivables;
(ix) Liens securing Indebtedness permitted under
Sections 8.13(d) and (e);
(x) Liens on Property of Excluded Country
Subsidiaries securing Indebtedness permitted under Section
8.13(e); and
(xi) Liens in favor of the Agent or any of the
Banks under the Loan Documents and Liens expressly permitted
under the terms of any other Loan Documents.
(b) Financing Statements. Each Company will not, and
will not permit any Subsidiary to, sign or file a financing statement
under the Uniform Commercial Code of any jurisdiction that names such
Company or such Subsidiary as debtor, or sign any security agreement
authorizing any secured party thereunder to file any such financing
statement, except, in any such case, a financing statement
filed or to be filed to perfect or protect a security interest that
such Company or such Subsidiary is entitled to create, assume or
incur, or permit to exist, under the foregoing provisions of this
Section 8.2, or to evidence for informational purposes a lessor's
interest in Property leased to such Company or any such Subsidiary.
8.3 Financial Condition. Danka PLC will not permit:
(i) As at the end of any fiscal quarter ending on
or after March 31, 1997, for the four fiscal quarters then
ending, the Consolidated Fixed Charge Coverage Ratio of Danka
PLC and its Subsidiaries to be less than 1.5:1.0.
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(ii) At any time on or after the Effective Date,
the Adjusted Consolidated Net Worth of Danka PLC and its
Subsidiaries to be less than $400,000,000 plus (A) 50% of the
quarterly consolidated net earnings of Danka PLC and its
Subsidiaries (if positive) for each fiscal quarter ending
after the Effective Date (on a cumulative basis) plus (B) 75%
of net proceeds of equity interests issued by Danka PLC after
the Effective Date.
(iii) The Consolidated Total Leverage Ratio as at
the end of any fiscal quarter ending on or after the Effective
Date for the four fiscal quarters then ending to exceed (x)
for any period ending on or prior to March 30, 1998, 3.75 to
1.00, and (y) for any period ending thereafter, 3.25 to 1.00.
8.4 Investments. Each Company will not, and will not permit any
of its Subsidiaries to, make, incur, assume or suffer to exist any Investment
in any other Person, except, subject to the provisions of Section 7.8:
(a) Investments existing on the Effective Date and
identified in Schedule 8.4(a);
(b) Cash Equivalent Investments;
(c) so long as such Company demonstrates, in writing,
compliance with clause (h) below, Investments by such Company or any
of its Subsidiaries by way of acquisitions of an entity or entities or
assets of an entity or entities, within such Company's line of
business; provided, however, that no Acquisition for which the
Acquisition Price equals or exceeds 10% of Adjusted Consolidated Net
Worth may be made without the prior written consent of the Majority
Banks, which shall not be unreasonably withheld, and no Acquisition
through a stock purchase may be made unless approved by the acquired
entity's Board of Directors or similar governing body; for the
purposes of this clause (c) "Acquisition Price" shall equal the cash
paid to the seller plus all notes or securities (other than common
equity securities of Danka PLC) received by or delivered to the seller
in connection with such Acquisition;
(d) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such requirements;
(e) loans and advances by such Company or any of its
Subsidiaries to any Guarantor or a Company or Contingent Obligations
of such Company or any of its Subsidiaries for the benefit of any
Guarantor, any Excluded Country Subsidiary or any other Company;
provided, however, that each such loan or advance shall be evidenced
as required by Section 7.7;
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(f) Investments, excluding guarantees of any Company or
Guarantors, in, or for the benefit of, Excluded Country Subsidiaries
and Restricted Subsidiaries, all such Investments under this clause
(f) not to exceed 10% of Adjusted Consolidated Net Worth at any time
outstanding;
(g) any other Investments not to exceed 10% of Adjusted
Consolidated Net Worth in the aggregate at any time outstanding; and
(h) no Investment otherwise permitted by clause (c)
shall be permitted to be made if, immediately before or after giving
effect thereto, any Default or Event of Default shall have occurred
and be continuing. In determining whether or not a Default or Event
of Default would occur, the calculations set forth in
Section 8.3 shall be made on a pro forma basis, as of the end
of the last fiscal quarter prior thereto, as if the Investment had
been made prior to the period of any such calculations.
8.5 Restricted Payments, etc. On and at all times after the date
hereof Danka PLC will not, and will not permit any of its Subsidiaries to,
declare, pay or make any dividend or distribution (in cash, property or
obligations) on any shares of any class of capital stock (now or hereafter
outstanding) of Danka PLC or on any warrants, options or other rights with
respect to any shares of any class of capital stock (now or hereafter
outstanding) of Danka PLC (other than FIP Holder Payments and dividends or
distributions payable in its common stock or warrants to purchase its common
stock or splitups or reclassifications of its stock into additional or other
shares of its common stock), or apply, or permit any of its Subsidiaries to
apply, any of its funds, property or assets to the purchase, redemption,
sinking fund or other retirement of, or agree or permit any of its Subsidiaries
to purchase or redeem, any shares of any class of capital stock (now or
hereafter outstanding) of Danka PLC, or warrants, options or other rights with
respect to any shares of any class of capital stock (now or hereafter
outstanding) of Danka PLC, other than FIP Holder Payments.
Notwithstanding the foregoing and so long as there shall not exist an
Event of Default which is continuing,
(a) any wholly owned (other than with respect to
directors' qualifying shares) Subsidiary of Danka PLC may pay
dividends or other distributions to Danka PLC or any other such wholly
owned Subsidiary of Danka PLC; and
(b) Danka PLC may pay dividends in any fiscal year in
an amount not exceeding 50% of its consolidated net income for the
previous fiscal year.
8.6 Convertible Subordinated Notes. Neither Danka PLC nor any
Subsidiary shall repurchase, redeem or otherwise retain any Convertible
Subordinated Notes except that the Convertible Subordinated Notes can be
converted to equity in accordance with their terms.
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8.7 Consolidation Merger, etc. Each Company will not, and will
not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with,
or merge into or with, any other corporation, or (except as permitted by
Section 8.4(c)) purchase or otherwise acquire all or substantially all of the
assets of any Person (or of any division thereof) except:
(a) any Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, such Company or any
Subsidiary, and the assets or stock of any Subsidiary may be purchased
or otherwise acquired by such Company or any Subsidiary; provided,
however, that (i) Agent shall have received at least 15 days' prior
written notice thereof and (ii) the applicable requirements of
Section 7.8 shall have been complied with in connection with such
transaction; and
(b) such Company or any Subsidiary may merge with any
other Person if (i) no Default or Event of Default has occurred or
would occur after giving effect thereto, (ii) the general nature of
its business is not changed and (iii) the surviving entity is a
Company (in the case of a merger involving a Company) or a Subsidiary
or an entity which is wholly-owned by a wholly-owned Subsidiary (in
the case of a merger involving a Subsidiary); provided, however, that
(i) Agent shall have received at least 15 days' prior written notice
thereof and (ii) Companies shall have complied with the applicable
requirements of Section 7.8 in connection with such transaction.
Notwithstanding the foregoing, nothing in this clause (b) shall
prohibit a merger solely for the purpose of selecting an alternate
jurisdiction of incorporation; provided, further, that the Companies
shall have complied with the requirements of Section 7.8 at or prior
to such merger. In determining whether or not a Default or Event of
Default would occur, the calculations set out in Section 8.3 shall be
made on a pro forma basis, as of the end of the last fiscal quarter
prior thereto, as if the merger had occurred prior to the period of
such calculations.
8.8 Asset Dispositions, etc. Each Company will not, and will not
permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable and
capital stock of Subsidiaries) to any Person, unless:
(a) such sale, transfer, lease, contribution or
conveyance is in the ordinary course of its business or is permitted
by Section 8.7 or is the sale of accounts receivable in connection
with a Permitted Receivables Securitization;
(b) the net book value of such assets which are sold
other than those sold, transferred, leased, contributed or conveyed in
the ordinary course of business by Danka PLC and its Subsidiaries
since the Closing Date does not exceed in any fiscal year an amount
equal to 10% of Adjusted Consolidated Net Worth; or
(c) such sale, transfer or disposition is the sale,
transfer or disposition to DFC of short and/or long-term receivables
of Danka PLC and its Subsidiaries and any residual value of the
Equipment, the sale or lease of which generated such receivables.
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8.9 Transactions with Affiliates. Each Company will not, and will
not permit any of its Subsidiaries to, enter into, or cause, suffer or permit
to exist, any arrangement or contract with any of its Affiliates that is not a
Guarantor unless such arrangement or contract is fair and equitable to such
Company or such Subsidiary and is an arrangement or contract of the kind which
would be entered into by a prudent Person in the position of such Company or
such Subsidiary with a Person that is not one of its Affiliates.
8.10 Negative Pledges, Restrictive Agreements, etc. Each Company
will not, and will not permit any of its Subsidiaries to, enter into any
agreement (excluding (A) this Agreement, (B) any other Loan Document, (C) the
agreements giving rise to a Permitted Receivables Securitization (with respect
to restrictions on the creation of Liens on accounts receivable transferred in
such Permitted Receivables Securitization only), (D) prior to the initial
Credit Extension hereunder, the Existing Credit Agreement, (E) other
Indebtedness permitted under Section 8.13 (with respect to restrictions on the
creation of Liens on property, plant and equipment acquired with the proceeds
of such Property) and (F) those described on Schedule 8.10) prohibiting:
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of such Company or any Subsidiary to amend or
otherwise modify this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any payments,
directly or indirectly, to such Company by way of dividends, advances,
repayments of loans or advances, reimbursements of management and
other intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which restricts the
ability of any such Subsidiary to make any payment, directly or
indirectly, to such Company.
8.11 Subsidiaries' Voting Share. Each Company will not (a) permit
any of its Subsidiaries to issue voting shares to anyone other than such
Company or another wholly-owned Subsidiary, or (b) permit any of its
wholly-owned Subsidiaries to sell, transfer or otherwise dispose of the voting
shares of any Subsidiaries to any Person other than such Company or another of
its wholly-owned Subsidiaries.
8.12 ERISA. Danka Holding shall not, and shall not suffer or
permit any of its ERISA Affiliates to: (a) engage in a prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably be expected to result in liability of
such Company in an aggregate amount in excess of $5,000,000; or (b) engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
8.13 Limitation on Indebtedness. The Companies shall not, and
shall not permit any of their Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except:
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(a) Indebtedness incurred pursuant to this Agreement
including International Swing Line Loans;
(b) Indebtedness existing on the date hereof and set
forth in Schedule 8.13, including any renewals or replacements on
substantially similar terms;
(c) Indebtedness arising in connection with Permitted
Receivables Securitizations;
(d) Subordinated Indebtedness;
(e) Indebtedness of Excluded Country Subsidiaries and
Restricted Subsidiaries not to exceed at any time 10% of the Adjusted
Consolidated Net Worth;
(f) Additional Indebtedness of the Companies and the
Guarantors not to exceed 20% of the Adjusted Consolidated Net Worth;
and
(g) FIPs.
8.14 Ownership of Operating Companies. The Companies shall not
cause, suffer or permit Dankalux Sarl to own directly any equity interests in
any Included Country Operating Companies.
8.15 Change Fiscal Year. The Companies shall not change their
fiscal year.
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ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default. Any of the following shall constitute an
"Event of Default":
(a) Non-Payment. Any Company fails to make, (i) when
and as required to be made herein, payments of any amount of principal
or interest of any Loan, International Swing Line Loan or any L/C
Borrowing, or (ii) within three days after the same becomes due,
payment of any fee or any other amount payable hereunder or under any
other Loan Document; or
(b) Representation or Warranty. Any representation or
warranty by any Company or any Subsidiary made or deemed made herein
or in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by any Company,
any Subsidiary, or any Responsible Officer of any Company, furnished
at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date
made or deemed made (and which incorrect representation or warranty
shall not be corrected within ten days of the determination thereof);
or
(c) Specific Defaults. Any Company fails to perform
or observe any term, covenant or agreement contained in any of Section
7.1(f), 7.1(j) or 7.8 or in Article VIII, and in the case of
Article VIII (other than Section 8.3) only such default shall continue
unremedied for a period of 10 days after the date upon which written
notice thereof is given to each Company by the Agent or any Bank; or
(d) Other Defaults. Any Company or any Subsidiary
party thereto fails to perform or observe any other term or covenant
contained in this Agreement or any other Loan Document, and such
default shall continue unremedied for a period of 30 days after the
date upon which written notice thereof is given to each Company by the
Agent or any Bank; or
(e) Cross-Default. (i) Any Company or any Subsidiary
(A) fails to make any payment in respect of any Indebtedness or
Contingent Obligations having an aggregate principal amount (including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $10,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise); or
(B) fails to perform or observe any other condition or covenant, or
any other event shall occur or condition exist, under any agreement or
instrument relating to any such Indebtedness or Contingent Obligation,
if the effect of such failure, event or condition is to cause, or to
permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its
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stated maturity, or such Contingent Obligation to become payable or
cash collateral in respect thereof to be demanded; or (ii) there
occurs under any Swap Contract an Early Termination Date (as defined
in such Swap Contract) resulting from (1) any event of default under
such Swap Contract as to which any Company or any Subsidiary is the
Defaulting Party (as defined in such Swap Contract) or (2) any
Termination Event (as so defined) as to which any Company or any
Subsidiary is an Affected Party (as so defined), and, in either event,
the Swap Termination Value owed by such Company or such Subsidiary as
a result thereof is greater than $10,000,000; or
(f) Insolvency; Voluntary Proceedings. Any Company or
any Guarantor (i) is unable to pay its debts as they fall due, ceases
or fails to be solvent, or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course (except as permitted under Section 8.7); (iii)
commences any Insolvency Proceeding with respect to itself; (iv)
commences negotiations with any one or more of its creditors with a
view to the general readjustment or rescheduling of its indebtedness;
or (v) takes any action to effectuate or authorize any of the
foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against any Company or any
Guarantor, or any writ, judgment, warrant of attachment, execution or
similar process is issued or levied against a substantial part of any
Company's or any Guarantor's properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released,
vacated or fully bonded, within 60 days after commencement, filing or
levy; (ii) any Company or any Guarantor admits the material
allegations of a petition against it in any Insolvency Proceeding, or
an order for relief (or similar order) is ordered in any Insolvency
Proceeding; or (iii) any Company or any Guarantor acquiesces in the
appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or
business; or
(h) Monetary Judgments. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is
entered against any Company or any Guarantor involving in the
aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute
coverage) as to any single or related series of transactions,
incidents or conditions, of $10,000,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period
of 10 days after the entry thereof; or
(i) Non-Monetary Judgments. Any non-monetary judgment,
order or decree is entered against a Company or any Subsidiary which
does or would reasonably be expected to have a Material Adverse
Effect, and there shall be any period of 10
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consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(j) Change of Control. There occurs any Change of
Control; or
(k) Guarantor/Pledgor Defaults. (i) Any Guarantor, or
any Company or Subsidiary party to a Pledge Agreement, fails in any
material respect to perform or observe any term, covenant or agreement
in its Guaranty or Pledge Agreement; or (ii) any Guaranty or Pledge
Agreement is for any reason partially (including with respect to
future advances) or wholly revoked or invalidated, or otherwise ceases
to be in full force and effect, and (only as to any such revocation,
invalidation or cessation that shall have occurred by reason of a
Governmental Impairment) the effect of such revocation, invalidation
or cessation is that the Companies and Guarantors whose obligations
under the Loan Documents remain valid and in full force and effect
shall be those to whom less than 85% of the consolidated revenues or
consolidated assets of Danka PLC and its Subsidiaries are attributable
for the fiscal year most recently ended or (iii) any Company or any
Subsidiary (or any representative, agent, trustee or receiver of any
Company or Subsidiary or comparable Person) contests in any manner the
validity, enforceability or perfection of any Guaranty or Pledge
Agreement or denies that it has any further liability or obligation
thereunder; or
(l) ERISA. (i) An ERISA Event shall occur with respect
to a Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of a Company under Title
IV of ERISA to such Pension Plan, such Multiemployer Plan or the PBGC
in an aggregate amount in excess of $10,000,000; (ii) the aggregate
amount of Unfunded Pension Liability among all Pension Plans at any
time exceeds $10,000,000; or (iii) any Company or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $10,000,000; or
(m) The occurrence of an "Event of Default" as defined
in either of the International Swing Line Agreements.
9.2 Remedies. If any Event of Default occurs, the Agent shall, at
the request of, or may, with the consent of, the Majority Banks,
(a) declare the commitments of each Bank to make Loans
or purchase International Swing Line Participations and any obligation
of any Issuing Bank to Issue Letters of Credit to be terminated,
whereupon such commitments shall be terminated;
(b) declare an amount equal to the maximum aggregate
amount that is or at any time thereafter may become available for
drawing under any outstanding Letters of Credit (whether or not any
beneficiary shall have presented, or shall be entitled at such
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time to present, the drafts or other documents required to draw under
such Letters of Credit) to be immediately due and payable, declare
the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by each Company;
(c) apply any cash or deposit account balances that
were used by the Companies to Cash Collateralize any Letters of Credit
that the Agent would otherwise be required to return to the Companies
pursuant to Section 3.7 to any outstanding Obligations; and
(d) exercise on behalf of itself and the Banks
(including the International Swing Banks, in such capacity) all rights
and remedies available to it and the Banks under the Loan Documents or
applicable law;
provided, however, that upon the occurrence of any event specified in
subsection (f) or (g) of Section 9.1 (in the case of clause (i) of subsection
(g) upon the expiration of the 60-day period mentioned therein), the obligation
of each Bank to make Loans or purchase International Swing Line Participations
and any obligation of the Issuing Bank to Issue Letters of Credit shall
automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically
become due and payable without further act of the Agent, the Issuing Bank or
any Bank and without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Companies; and provided,
further, that after any obligations with respect to any undrawn Letter of
Credit shall have been accelerated under clause (b) and if such accelerated
amount has been paid, the Banks shall return to the Companies within 30 days
after the expiration of such Letter of Credit, any amount not drawn thereunder
so long as no Obligations shall be due and payable.
9.3 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive of
any other rights, powers, privileges or remedies provided by law or in equity,
or under any other instrument, document or agreement now existing or hereafter
arising.
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ARTICLE X
THE AGENT
10.1 Appointment and Authorization; "Agent". (a) Each Bank
(including for all purposes of this Article X each of the International Swing
Line Banks in such capacity) hereby irrevocably (subject to Section 10.9)
appoints, designates and authorizes the Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Without limiting the foregoing,
the Agent may accept Support Documents on behalf of the Banks. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be deemed
to have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent. Without limiting the generality of the foregoing sentence, the use of
the term "agent" in this Agreement or any other Loan Document with reference to
the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. So long as there shall only be one Bank party to this
Agreement the term Agent shall mean such Bank.
(b) The Issuing Bank shall act on behalf of the Banks with respect
to any Letters of Credit Issued by it and the documents associated therewith
until such time and except for so long as the Agent may agree at the request of
the Majority Banks to act for such Issuing Bank with respect thereto; provided,
however, that the Issuing Bank shall have all of the benefits and immunities,
including without limitation the right to resign under Section 10.9, (i)
provided to the Agent in this Article X with respect to any acts taken or
omissions suffered by the Issuing Bank in connection with Letters of Credit
Issued by it or proposed to be Issued by it and the application and agreements
for letters of credit pertaining to the Letters of Credit as fully as if the
term "Agent" as used in this Article X, included the Issuing Bank with respect
to such acts or omissions, and (ii) as additionally provided in this Agreement
with respect to the Issuing Bank.
10.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
10.3 Liability of Agent. None of the Agent-Related Persons shall
(i) be liable to any of the Banks for any action taken or omitted to be taken
by any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for
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its own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Banks for any recital, statement, representation or
warranty made by any Company or any Subsidiary or Affiliate of any Company, or
any officer thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Company or any of any Company's
Subsidiaries or Affiliates.
10.4 Reliance by Agent.
(a) The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to any Company or any Subsidiary), independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Majority Banks
or all the Banks as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense, except those arising out of its gross negligence or willful
misconduct, which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Majority Banks or all
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1 and Section 5.2, each Bank that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by the Agent to such
Bank for consent, approval, acceptance or satisfaction, or required thereunder
to be consented to or approved by or acceptable or satisfactory to such Bank.
10.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Agent for the account of the Banks, unless the Agent
shall have received written notice from a Bank or a Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Banks of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the
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Majority Banks in accordance with Article IX; provided, however, that unless
and until the Agent has received any such request, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or in
the best interest of the Banks 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 Banks or all the Banks.
10.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Agent hereafter taken, including any review of the affairs of the
Companies and their Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of each Company and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to the Companies
hereunder. Each Bank also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of each Company
and each Subsidiary. Except for notices, reports and other documents expressly
herein required to be furnished to the Banks by the Agent, the Agent shall not
have any duty or responsibility to provide any Bank with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any Company or any other Person
which may come into the possession of any of the Agent-Related Persons.
10.7 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Companies and without limiting the obligation of the Companies to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
that no Bank shall be liable for the payment to the Agent-Related Persons of
any portion of such Indemnified Liabilities resulting from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Bank shall reimburse the Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any
document contemplated by or referred to herein, to the extent that the Agent is
not reimbursed for such expenses by or on behalf of the Companies, except those
arising out of its gross negligence or willful misconduct. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
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10.8 Agent in Individual Capacity. NationsBank and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with each Company and
its Subsidiaries and Affiliates as though NationsBank were not the Agent or the
Issuing Bank hereunder and without notice to or consent of the Banks. The
Banks acknowledge that, pursuant to such activities, NationsBank or its
Affiliates may receive information regarding a Company or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Company or such Affiliate) and acknowledge that the Agent shall
be under no obligation to provide such information to them. With respect to
its Loans, NationsBank shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Agent or the Issuing Bank, and the terms "Bank" and "Banks" include NationsBank
in its individual capacity.
10.9 Successor Agent and Successor Issuing Bank. Either the Agent
or the Issuing Bank, respectively, may resign as Agent or Issuing Bank upon 30
days' notice to the Banks. If the Agent or Issuing Bank resigns under this
Agreement, the Majority Banks shall appoint from among the Banks a successor
agent for the Banks or successor issuing bank, respectively. The appointment of
a successor issuing bank shall be subject to the consent of the Companies which
shall not be unreasonably withheld. If no successor agent or successor issuing
bank is appointed prior to the effective date of the resignation of the Agent
or the Issuing Bank respectively, the Agent or the Issuing Bank may appoint,
after consulting with the Banks and the Companies, a successor agent or
successor issuing bank from among the Banks. Upon the acceptance of its
appointment as successor agent or successor issuing bank hereunder, such
successor agent or successor issuing bank, respectively, shall succeed to all
the rights, powers and duties of the retiring Agent or the retiring Issuing
Bank and the term "Agent" or "Issuing Bank" shall mean such successor agent or
successor issuing bank and the retiring Agent's or the retiring Issuing Bank's
appointment, powers and duties as Agent or Issuing Bank shall be terminated.
After any retiring Agent's or retiring Issuing Bank's resignation hereunder as
Agent or Issuing Bank, the provisions of this Article X and Sections 11.4 and
11.5 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent or Issuing Bank under this Agreement. If no successor
agent or successor issuing bank has accepted appointment as Agent or Issuing
Bank by the date which is 30 days following a retiring Agent's or retiring
Issuing Bank's notice of resignation, the retiring Agent's or retiring Issuing
Bank's resignation shall nevertheless thereupon become effective and the Banks
shall perform all of the duties of the Agent or Issuing Bank hereunder until
such time, if any, as the Majority Banks appoint a successor agent or successor
issuing bank as provided for above.
10.10 U.S. Withholding Tax.
(a) Any Bank that is a "foreign corporation, partnership or trust"
within the meaning of the Code shall deliver to the Agent on or prior to the
Effective Date (in the case of each Bank listed on the signature pages hereof)
or on or prior to the later of the Effective Date or the date of the Assignment
Agreement pursuant to which it becomes a participating Bank (in the case of
each other Bank):
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(i) two properly completed and executed copies of IRS
Form 1001 establishing that such Bank is entitled to exemption from
withholding tax under a U.S. tax treaty; or
(ii) two properly completed and executed copies of IRS
Form 4224 establishing that interest paid under this Agreement is
exempt from United States withholding tax in respect of interest
payments hereunder because it is effectively connected with a United
States trade or business of such Bank; and
(iii) such additional 1001, 4224 or other form or forms
as may be required from time to time under the Code or other laws of
the United States as a condition to exemption from, or reduction of,
United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) The Company shall not be required to pay any additional amount
to any non-U.S. Bank in respect of United States withholding tax under clause
(b)(i) of Section 4.1 if such Bank shall have failed to satisfy the
requirements of Section 10.10(a); provided, however, that if such Bank shall
have satisfied the requirements of Section 10.10(a) on the Effective Date (in
the case of each Bank listed on the signature pages hereof) or on the later of
the Effective Date or the date of the Assignment Agreement pursuant to which
such Bank became a participating Bank (in the case of each other Bank) nothing
in this Section 10.10(b) shall relieve the Company of its obligation to pay
additional amounts pursuant to clause (b)(i) of Section 4.1 in the event that,
as a result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof, such Bank is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the fact that
such Bank is not subject to withholding as described in clause (a)(i) of this
Section 10.10.
(c) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the Obligations of the Companies to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Companies to such Bank. To the extent
of such percentage amount, the Agent will treat such Bank's IRS Form 1001 as no
longer valid.
(d) If any Bank claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Companies to such Bank, such Bank agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
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(e) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into
account such reduction. However, if the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
Agent may withhold from any interest payment to such Bank not providing such
forms or other documentation an amount equivalent to the applicable withholding
tax imposed by Sections 1441 and 1442 of the Code, without reduction.
(f) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because
such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, together with all costs
and expenses (including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
(g) Each Bank that is a U.S. Bank shall complete and deliver to
the Agent a statement signed by an authorized signatory of such Bank to the
effect that it is a United States person together with a duly completed and
executed copy of IRS Form W-9 (or any successor form) establishing that such
Bank is not subject to U.S. backup withholding tax. To the extent that any
provision of Article IV shall conflict with this Section 10.10, then this
Section 10.10 shall control.
10.11 United Kingdom Withholding.
(a) Each Bank that is not a United Kingdom Bank (as defined in
Section 840A of the United Kingdom Income and Corporation Taxes Act of 1988)
subject to United Kingdom corporation tax as respects interest payments to it
pursuant to this Agreement shall deliver to the Agent, on or prior to the
Effective Date (in the case of each Bank listed on the signature pages hereof)
or on or prior to the later of the Effective Date or the date of the Assignment
Agreement pursuant to which it becomes a participating Bank (in the case of
each other Bank) (I) appropriate documentation (i) establishing that such Bank
is entitled to exemption from United Kingdom withholding tax in respect of
interest payments hereunder under a United Kingdom tax treaty with the
appropriate jurisdiction, or (ii) establishing that it is otherwise entitled to
receive payments without such withholding and (II) a properly completed and
executed official document similar to Schedule 10.11(a) attached claiming an
exemption from future withholding taxes and naming Danka PLC as agent for the
receipt of repayment of U.K. withholding taxes already withheld;
(b) Each Bank that is a United Kingdom Bank (as defined in Section
840A of the United Kingdom Income and Corporation Taxes Act of 1988) shall
complete and deliver to the Agent a statement signed by an authorized signatory
of such Bank, and any other documentation
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reasonably required, to the effect that it is subject to United Kingdom
corporation tax on interest payable to it pursuant to this Agreement;
(c) The Company shall not be required to pay any additional amount
to any non-United Kingdom Bank or United Kingdom Bank in respect of United
Kingdom withholding taxes under clause (b)(i) of Section 4.1 if such Bank shall
have failed to satisfy the requirements of Section 10.11(a) in the case of a
non-United Kingdom Bank, or Section 10.11(b) in the case of a United Kingdom
Bank; provided, however, that if such Bank shall have satisfied the
requirements of such Sections 10.11(a) or (b) on the Effective Date (in the
case of each Bank listed on the signature pages hereof) or on the later of the
Effective Date or the date of the Assignment Agreement pursuant to which such
Bank became a participating Bank (in the case of each other Bank), nothing in
this Section 10.11(c) shall relieve the Company of its obligation to pay
additional amounts pursuant to clause (b)(i) of Section 4.1 in the event that,
as a result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof, such Bank is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the fact that
such Bank is not subject to withholding as described in subsection (a) of this
Section 10.11.
(d) If the Company has to (i) withhold tax on payments of interest
to any Bank that is not a United Kingdom Bank (as defined in Section 10.11(a)
and (ii) make additional payments to such Bank under clause (b) of Section 4.1
in respect of such withholding, such Bank will with reasonable promptness and
to the extent permitted by law complete and properly execute a refund claim on
an official document similar to that in Schedule 10.11(d) and mandate the
United Kingdom Inland Revenue to pay any refund of income tax due to Danka PLC
and file such form with the appropriate tax authority for certification. If
any refund of income tax is received by any Bank, such Bank will pay such
refund promptly to Danka PLC. To the extent that any provision of Article IV
shall conflict with this Section 10.11, then this Section 10.11 shall control.
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ARTICLE XI
MISCELLANEOUS
11.1 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by any Company or any applicable Subsidiary therefrom,
shall be effective unless the same shall be in writing and signed by the
Majority Banks (or by the Agent at the written request of the Majority Banks)
and each Company and delivered to the Agent, and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Banks and each Company
and delivered to the Agent, do any of the following:
(a) increase or extend the Commitment or International
Swing Line Commitment of any Bank (or reinstate any Commitment or
International Swing Line Commitment terminated pursuant to
Section 9.2);
(b) postpone or delay any date fixed by this Agreement
or any other Loan Document for any payment of principal, interest,
fees or other amounts due to the Banks (or any of them) hereunder or
under any other Loan Document;
(c) reduce the principal of, or the rate of interest
specified herein on, any Loan, or (subject to clause (ii) of the
proviso below) any fees or other amounts payable hereunder or under
any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for
the Banks or any of them to take any action hereunder; or
(e) amend this Section, or Section 2.16, or any
provision herein providing for consent or other action by all Banks;
or
(f) release any party to a Guaranty or, except as
expressly provided for herein, release any collateral for any
obligations arising under the Loan Documents;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Issuing Bank in addition to the Majority Banks or
all the Banks, as the case may be, affect the rights or duties of the Issuing
Bank under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Majority
Banks or all the Banks, as the case may be, affect the rights or duties of the
Agent under this Agreement or any other Loan Document, (iii) no amendment,
waiver or consent shall, unless in writing and signed by the International
Swing Line Banks, affect the duties or obligations of the International Swing
Line Banks hereunder or the rights of the International Swing Line Banks under
Sections 2.20 or 5.5,
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and (iv) the Fee Letters may be amended, or rights or privileges thereunder
waived, in a writing executed by the parties thereto.
11.2 Notices.
(a) All notices, requests, consents, approvals, waivers and other
communications may be in writing or oral if confirmed in writing (which
includes confirmation by facsimile) at the address or number specified in
Schedule 11.2.
(b) All such notices, requests and communications shall, when sent
by overnight delivery, or transmitted by facsimile, be effective when
delivered to the recipient or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if hand delivered, upon delivery; except that
notices pursuant to Article II, Article III or Article X to the Agent shall not
be effective until actually received by the Agent, and notices pursuant to
Article III to the Issuing Bank shall not be effective until actually received
by the Issuing Bank at the address specified for the "Issuing Bank" on Schedule
11.2.
(c) Any agreement of the Agent and the Banks herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Companies. The Agent and the Banks shall be entitled to rely
on the authority of any Person purporting to be a Person authorized by a
Company to give such notice and the Agent and the Banks shall not have any
liability to a Company or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Companies to repay the Loans and L/C Obligations
shall not be affected in any way or to any extent by any failure by the Agent
and the Banks to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the Banks of a confirmation which is at
variance with the terms reasonably understood by the Agent and the Banks to be
contained in the telephonic or facsimile notice.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
11.4 Costs and Expenses. The Companies shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse NationsBank (including in its capacity as Agent
and Issuing Bank) and the Arranger within 30 days after invoice (subject to
Section 5.2(a)(v) for all reasonable costs and expenses incurred by NationsBank
(including in its capacity as Agent and Issuing Bank) and the Arranger in
connection with the development, preparation, delivery, and execution of, and
any amendment, supplement, waiver or modification to (in each case, whether or
not consummated but only if
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requested or caused by a Company or a Subsidiary), this Agreement, any other
Loan Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including reasonable Attorney Costs incurred by NationsBank (including
in its capacity as Agent and Issuing Bank) and the Arranger with respect
thereto; and
(b) pay or reimburse the Agent, the Arranger and each Bank within
thirty days after invoice (subject to Section 5.2(f)) for all reasonable costs
and expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an
Event of Default or after acceleration of the Loans (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding).
The agreements in this Section shall survive payment of all other
Obligations.
11.5 Company Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Companies shall indemnify, defend and
hold harmless the Agent-Related Persons, and each Bank (including the
International Swing Line Banks in such capacity) and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges, expenses
and disbursements (including Attorney Costs) of any kind or nature whatsoever
(other than expenses described in Section 11.4 whether or not required to be
reimbursed thereunder) which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any
Bank) be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of this Agreement or the International Swing Line
Agreements or any document contemplated by or referred to herein or therein, or
the transactions contemplated hereby or thereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of
this Agreement or the International Swing Line Agreements or the Loans, the
International Swing Line Loans or Letters of Credit or the use of the proceeds
thereof, or related to any Offshore Currency transactions or International
Swing Line Loans entered into in connection herewith, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Companies shall have no
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting solely from the bad faith, gross negligence or willful
misconduct of such Indemnified Person; and provided further the Companies shall
have no obligations with respect to tax liabilities, funding costs or capital
costs of any Indemnified Person except as set forth in this Agreement or the
International Swing Line Agreements. The agreements in this Section shall
survive payment of all other Obligations.
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At the election of any Indemnified Person, the Companies shall defend
such Indemnified Person using legal counsel mutually acceptable to the
Companies, the Agent, the Majority Banks and such Indemnified Person, at the
sole cost and expense of the Companies. All amounts owing under this Section
shall be paid within 30 days after demand.
11.6 Marshalling; Payments Set Aside. Neither the Agent nor the
Banks shall be under any obligation to marshall any assets in favor of any
Company or any other Person or against or in payment of any or all of the
Obligations. To the extent that a Company makes a payment to the Agent or the
Banks, or the Agent or the Banks exercise their right of set-off, and such
payment or the proceeds of such set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Agent or such Bank in
its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Bank
severally agrees (to the extent it shall have shared in any such recovery) to
pay to the Agent upon demand its pro rata share of any amount so recovered from
or repaid by the Agent.
11.7 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Companies may not assign or
transfer any of their rights or obligations under this Agreement without the
prior written consent of the Agent and each Bank.
11.8 Assignments, Participations, etc.
(a) Any Bank may, with the written consent of each Company (at all
times other than during the existence of an Event of Default) and the Agent and
the Issuing Bank, which consents shall not be unreasonably withheld (provided
that the withholding of consent by reason of any proposed assignment resulting
in the incurrence by the Companies of increased costs under Article IV shall
not be deemed to be unreasonable), at any time assign and delegate to one or
more Eligible Assignees (provided that no written consent of the Companies, the
Agent or the Issuing Bank shall be required in connection with any assignment
and delegation by a Bank to an Eligible Assignee that is an Affiliate of such
Bank) (each an "Assignee") all, or any constant ratable part of all, of the
Loans, the Commitment, the L/C Commitment, the L/C Obligations, Swing Line
Participations, International Swing Line Participations and the other rights
and obligations of such Bank hereunder, in a minimum aggregate amount of
$5,000,000; provided, however, that each Company and the Agent may continue to
deal solely and directly with such Bank in connection with the interest so
assigned to an Assignee until (A) written notice of such assignment, together
with payment instructions, addresses and related information with respect to
the Assignee, shall have been given to each Company and the Agent by such Bank
and the Assignee; (B) such Bank and its Assignee shall have delivered to each
Company and the Agent an Assignment and Acceptance in the form of Exhibit K
("Assignment and Acceptance") together with any Note or Notes subject to such
assignment; and (C) the assignor Bank or Assignee has paid to the Agent
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a processing fee in the amount of $3,500; and provided, further, the assignment
may at the option of the assigning Bank and the Assignee not assign any portion
of any outstanding Bid Loans. Notwithstanding the foregoing, no Bank may
effect an assignment under this Section 11.8(a) if after giving effect thereto
its remaining aggregate Commitment and International Swing Line Commitment
shall be less than $5,000,000, unless such assignment shall be part of a series
of transactions disclosed by such Bank to the Agent to effect the disposition
of all of such Bank's interests in the Loan Documents.
(b) From and after the date that the Agent notifies the assignor
Bank that it has received (and provided its consent with respect to) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents. Upon the
request of the Assignee, the Companies shall issue Notes to the Assignee.
(c) Within five Business Days after their receipt of notice from
the Agent that it has received an executed Assignment and Acceptance and
payment of the processing fee (and provided that they consent to such
assignment in accordance with Section 11.8(a)), the Companies shall execute and
deliver to the Agent a new Revolving Loan Note evidencing such Assignee's
assigned Revolving Loans and Revolving Commitment and a Bid Loan Note and a new
Term Loan Note evidencing such Assignee's assigned Term Loan Commitment and, if
the assignor Bank has retained a portion of its Revolving Loans and its
Revolving Commitment and Term Loan and its Term Loan Commitment, a replacement
Revolving Loan Note in the principal amount of the Revolving Commitment it has
retained (such Revolving Loan Note to be in exchange for, but not in payment
of, the Revolving Loan Note held by such Bank) and a replacement Term Loan Note
in the principal amount of the Term Loan Commitment it has retained (such Term
Loan Note to be in exchange for, but not in payment of, the Term Loan Note held
by such Bank). Immediately upon payment of the processing fee under the
Assignment and Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom.
The Commitment allocated to each Assignee shall reduce such Commitment of the
assigning Bank pro tanto.
(d) Any Bank or Designated Bidder may at any time sell to one or
more commercial banks or other Persons not Affiliates of a Company (a
"Participant") participating interests in any Loans, the Commitment of that
Bank and the other interests of that Bank or Designated Bidder (the
"originating Bank") hereunder and under the other Loan Documents; provided,
however, that (i) the originating Bank's obligations under this Agreement shall
remain unchanged, (ii) the originating Bank shall remain solely responsible for
the performance of such obligations, (iii) each Company, the Issuing Bank and
the Agent shall continue to deal solely and directly with the originating Bank
in connection with the originating Bank's rights and obligations under this
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Agreement and the other Loan Documents, and (iv) no Bank shall transfer or
grant any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, except to the extent such amendment,
consent or waiver would require unanimous consent of the Banks as described in
the first proviso to Section 11.1. In the case of any such participation, the
Participant shall be entitled to the benefit of Sections 4.1, 4.3, 4.4 and 11.5
as though it were also a Bank or Designated Bidder hereunder (provided that no
Participant shall be entitled to any payment under Section 4.1, 4.3 or 4.4 in
excess of the payment which would have been payable to the originating Bank if
it had not so sold a participation), and not have any rights under this
Agreement, or any of the other Loan Documents, and all amounts payable by the
Companies hereunder shall be determined as if such Bank had not sold such
participation; except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest, subject in
all events to Section 2.18 as if such Participant were a Bank, in amounts owing
under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Bank or Designated Bidder under this
Agreement.
(e) Notwithstanding any other provision in this Agreement, any
Bank or Designated Bidder may at any time create a security interest in, or
pledge all or any portion of its rights under and interest in this Agreement
and the Notes held by it in favor of any Federal Reserve Bank in accordance
with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR Section 203.14,
and such Federal Reserve Bank may enforce such pledge or security interest in
any manner permitted under applicable law.
(f) Any assignment or participation shall be subject to the
assignee's or the participant's agreement to be bound by all applicable
confidentiality restrictions.
(g) Notwithstanding an assignment, the Bank making the assignment
shall continue to have the benefits of Article IV and Sections 11.4 and 11.5
with respect to the period prior to the assignment.
11.9 Designated Bidders. Any Bank may designate one Designated
Bidder to have a right to offer and make Bid Loans pursuant to Section 2.6;
provided, however, that (i) no such Bank may make more than one such
designation, (ii) each such Bank making any such designation shall retain the
right to make Bid Loans, and (iii) the parties to each such designation shall
execute and deliver to the Agent a Designation Agreement. Upon its receipt of
an appropriately completed Designation Agreement executed by a designating Bank
and a designee representing that it is a Designated Bidder, the Agent will
accept such Designation Agreement and give prompt notice thereof to the
Company, whereupon such designation of such Designated Bidder shall become
effective and such designee shall become a party to this Agreement as a
"Designated Bidder."
11.10 Confidentiality. Each Bank and Designated Bidder agrees to
take and to cause its Affiliates to take normal and reasonable precautions and
exercise due care to maintain the
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confidentiality of all information provided to it by each Company or any
Subsidiary, or by the Agent on such Company's or Subsidiary's behalf, under
this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents or in connection
with other business now or hereafter existing or contemplated with the
Companies or any Subsidiary; except to the extent such information (i) was or
becomes generally available to the public other than as a result of disclosure
by the Agent, such Bank or Designated Bidder, or (ii) was or becomes available
on a non-confidential basis from a source other than the Companies, provided
that such source is not bound by a confidentiality agreement with the Companies
known to the Bank or Designated Bidder; provided, however, that any Bank or
Designated Bidder may disclose such information (A) at the request or pursuant
to any requirement of any Governmental Authority to which such Bank or
Designated Bidder is subject or in connection with an examination of such Bank
or Designated Bidder by any such authority; (B) pursuant to subpoena or other
court process; (C) when required to do so in accordance with the provisions of
any applicable Requirement of Law; (D) to the extent reasonably required in
connection with any litigation or proceeding to which the Agent, any Bank, any
Designated Bidder or their respective Affiliates may be party; (E) to the
extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to such Bank's or Designated
Bidder's independent auditors and other professional advisors provided that
such Person shall be notified of its obligation to keep such information
confidential to the same extent required of the Banks hereunder; (G) to any
Participant or Assignee, actual or potential, provided that such Person agrees
in writing to keep such information confidential to the same extent required of
the Banks hereunder; (H) as to any Bank, any Designated Bidder or its
Affiliate, as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which the Companies or any Subsidiary is
party or is deemed party with such Bank or such Affiliate; and (i) to its
Affiliates. The Bank disclosing information pursuant to the above proviso
(except pursuant to clauses (A) , (E) , (F) , (G) , (H) or (I) shall to the
extent permitted by law give prior notice thereof to the Companies and shall
limit such disclosures to the information so required.
11.11 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank and Designated Bidder is authorized at any time and from
time to time, without prior notice to any Company, any such notice being waived
by each Company to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held by, and other indebtedness at any time owing by, such Bank or
Designated Bidder to or for the credit or the account of such Company against
any and all Obligations then due and owing, or in case of Letters of Credit,
which may become due and owing, to such Bank or Designated Bidder, now or
hereafter existing, irrespective of whether or not the Agent or such Bank or
Designated Bidder shall have made demand under this Agreement or any Loan
Document. Each Bank and Designated Bidder agrees promptly to notify each
Company and the Agent after any such set-off and application made by such Bank
or Designated Bidder; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.
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11.12 Notification of Addresses of Lending Offices, Etc. Each Bank
and Designated Bidder shall notify the Agent in writing of any changes in the
address to which notices to such Bank and Designated Bidder should be directed,
of addresses of any Lending Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative
information as the Agent shall reasonably request.
11.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.14 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
11.15 No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and legal benefit of the Companies, the
Banks, the Designated Bidders, the Agent and the Agent-Related Persons, and
their permitted successors and assigns, and no other Person shall be a direct
or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents.
11.16 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF FLORIDA; PROVIDED THAT THE AGENT AND
THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF FLORIDA
OR OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF FLORIDA, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANIES, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANIES, THE DESIGNATED BIDDERS,
THE AGENT AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. THE COMPANIES, THE AGENT, THE DESIGNATED BIDDERS AND THE BANKS
EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY FLORIDA LAW.
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11.17 Waiver of Jury Trial. THE COMPANIES, THE BANKS, THE
DESIGNATED BIDDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL
BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED
TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE COMPANIES, THE BANKS, THE DESIGNATED BIDDERS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION 11.17 AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
11.18 Entire Agreement. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Companies, the Banks and the Agent, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.
11.19 Judgment Currency. Each Company, the Agent and each Bank
hereby agree that if, in the event that a judgment is given in relation to any
sum due to the Agent or any Bank hereunder, such judgment is given in a
currency (the "Judgment Currency") other than that in which such sum was
originally denominated (the "Original Currency"), such Company agrees to
indemnify the Agent or such Bank, as the case may be, to the extent that the
amount of the Original Currency which could have been purchased by the Agent in
accordance with normal banking procedures on the Business Day following receipt
of such sum is less than the sum which could have been so purchased by the
Agent had such purchase been made on the day on which such judgment was given
or, if such day is not a Business Day, on the Business Day immediately
preceding the giving of such judgment, and if the amount so purchased exceeds
the amount which could have been so purchased had such purchase been made on
the day on which such judgment was given or, if such day is not a Business Day,
on the Business Day immediately preceding such judgment, the Agent or the
applicable Bank agrees to remit such excess to the Companies. The agreements
in this Section shall survive payment of all other Obligations.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in Charlotte by their proper and duly authorized
officers as of the day and year first above written.
WITNESS: DANKA BUSINESS SYSTEMS PLC
/s/ Paul M. Natale By: /s/ David C. Snell
- ------------------------------ --------------------------------
Name: David C. Snell
/s/ Illegible Title: Finance Director
DANKA HOLDING COMPANY
/s/ Paul M. Natale By: /s/ William T. Freeman
- ------------------------------ --------------------------------
Name: Bill T. Freeman
/s/ Illegible Title: Treasurer and Chief
Financial Officer
DANKALUX SARL & CO. SCA
BY: DANKALUX SARL, COMMANDITE
/s/ Terry L. Scaggs By: /s/ Paul G. Dumond
- ------------------------------ --------------------------------
Name: Paul G. Dumond
/s/ Robert J. Willsea Title: Director
125
<PAGE> 133
NATIONSBANK, N.A., as Agent and
Issuing Bank
By: /s/ Miles C. Dearden III
------------------------------------
Name: Miles C. Dearden III
Title: Vice President
NATIONSBANK, N.A., as a Bank
By: /s/ Miles C. Dearden III
------------------------------------
Name: Miles C. Dearden III
Title: Vice President
<PAGE> 134
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
International Swing Line Bank
By: /s/ Laurens F. Schaad, Jr.
------------------------------------
Name: Laurens F. Schaad, Jr.
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as a Bank
By: /s/ Laurens F. Schaad, Jr.
------------------------------------
Name: Laurens F. Schaad, Jr.
Title: Vice President
<PAGE> 135
THE BANK OF NOVA SCOTIA
By: /s/ Frank F. Sandler
------------------------------------
Name: Frank F. Sandler
Title: Relationship Manager
THE BANK OF NOVA SCOTIA
By: /s/ Paul Gibbon
------------------------------------
Name: Paul Gibbon
Title: Relationship Manager
<PAGE> 136
COMMERZBANK AKTIENGESELLSCHAFT,
ATLANTA AGENCY
By: /s/ Andreas K. Bremer
------------------------------------
Name: Andreas K. Bremer
Title: SVP & Manager
By: /s/ Mary B. Smith
------------------------------------
Name: Mary B. Smith
Title: Assistant Vice President
<PAGE> 137
THE BANK OF NEW YORK
By: /s/ David C. Siegel
------------------------------------
Name: David C. Siegel
Title: Assistant Vice President
<PAGE> 138
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Jacques-Yves Mulliez
------------------------------------
Name: Jacquest-Yves Mulliez
Title: Senior Vice President
<PAGE> 139
CIBC INC.
By: /s/ Kim Frederking
------------------------------------
Name: Kim Frederking
Title: Director
<PAGE> 140
PNC BANK, KENTUCKY, INC.
By: /s/ James D. Neil
------------------------------------
Name: James D. Neil
Title: Vice President
<PAGE> 141
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ Jorge Gonzalez
------------------------------------
Name: Jorge Gonzalez
Title: Senior Vice President
<PAGE> 142
SUN TRUST BANK, TAMPA BAY
By: /s/ Ronald K. Rueve
------------------------------------
Name: Ronald K. Rueve
Title: Vice President
<PAGE> 143
THE FUJI BANK AND TRUST COMPANY
By: /s/ Toshiaki Yakura
------------------------------------
Name: Toshiaki Yakura
Title: Senior Vice President
<PAGE> 144
ABN AMRO BANK N.V.
By: /s/ Larry Kelley
------------------------------------
Name: Larry Kelley
Title: Group Vice President
By: /s/ Steven Hipsman
------------------------------------
Name: Steven Hipsman
Title: Vice President
<PAGE> 145
BANQUE PARIBAS
By:/s/ Ann C. Pifer
------------------------------------
Name: Ann C. Pifer
Title: Vice President
By: /s/ John J. McCormick, III
------------------------------------
Name: John J. McCormick, III
Title: Vice President
<PAGE> 146
DEUTSCHE BANK AG
NEW YORK BRANCH AND/OR CAYMAN ISLANDS
BRANCH
By:/s/ Ralf Hoffmann
------------------------------------
Name: Ralf Hoffmann
Title: Vice President
DEUTSCHE BANK AG
NEW YORK BRANCH AND/OR CAYMAN ISLANDS
BRANCH
By: /s/ Robert Wood
------------------------------------
Name: Robert Wood
Title: Vice President
<PAGE> 147
HIBERNIA NATIONAL BANK
By: /s/ Katharine Gonzalez
------------------------------------
Name: Katharine Gonzalez
Title: Banking Officer
<PAGE> 148
ISTITUTO BANCARIO SAN PAOLO DI TORINO
SPA
By: /s/ Robert S. Wurster /s/ William J. De Angel
------------------------------------------------
Name:Robert S. Wurster William J. De Angel
Title: First Vice President First Vice President
<PAGE> 149
LLOYDS BANK PLC
By: /s/ Windsor B. Davies /s/ Stephen J. Attree
----------------------------------------------
Name: Windsor B. Davies Stephen J. Attree
Title: VP & Manager AVP
<PAGE> 150
NATIONAL WESTMINSTER BANK PLC
By: /s/ J. Brett
------------------------------------
Name: J. Brett
Title: Senior Corporate Manager
<PAGE> 151
SOUTHTRUST BANK OF ALABAMA, N.A.
By: /s/ Antonia Williams
------------------------------------
Name: Antonia Williams
Title: Vice President
<PAGE> 152
THE SUMITOMO BANK, LIMITED
By: /s/ Masayuki Fukushima
------------------------------------
Name: Masayuki Fukushima
Title: Joint General Manager
<PAGE> 153
BANCA COMMERCIAL ITALIANA, NEW YORK
BRANCH
By: /s/ Charles P. Dougherty
------------------------------------
Name: Charles P. Dougherty
Title: Vice President
By: /s/ Brian Carlson
------------------------------------
Name: Brian Carlson
Title: Assistant Vice President
<PAGE> 154
AMSOUTH BANK OF FLORIDA
By: /s/ William R. Tsukalas
------------------------------------
Name: William R. Tsukalas
Title: Vice President
<PAGE> 155
THE BANK OF TOKYO-MITSUBISHI, LTD.,
ATLANTA AGENCY
By: /s/ G. England
------------------------------------
Name: G. England
Title: VP & Manager
<PAGE> 156
BANKERS TRUST COMPANY
By: /s/ Dana Klein
------------------------------------
Name: Dana Klein
Title: Vice President
<PAGE> 157
CORESTATES BANK, N.A.
By: /s/ Orville C. Dewey
------------------------------------
Name: Orville C. Dewey
Title: Vice President
<PAGE> 158
THE DAI-ICHI KANGYO BANK, LIMITED
By: /s/ Toshiaki Kurihara
------------------------------------
Name: Toshiaki Kurihara
Title: Joint General Manager
<PAGE> 159
THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY
By: /s/ Junri Oda
------------------------------------
Name: Junri Oda
Title: Senior Vice President
& Senior Manager
<PAGE> 160
NATIONAL AUSTRALIA BANK LIMITED
By: /s/ Shaun Dooley
------------------------------------
Name: Shaun Dooley
Title: Vice President
<PAGE> 161
SANWA BANK LIMITED
By: /s/ P.J. Pawlak
------------------------------------
Name: P.J. Pawlak
Title: VP & Senior Manager
<PAGE> 162
THE TOKAI BANK LIMITED, ATLANTA AGENCY
By: /s/ Eiichi Fujihira
------------------------------------
Name: Eiichi Fujihira
Title: General Manager
<PAGE> 163
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ Tammy F. Hughes
------------------------------------
Name: Tammy F. Hughes
Title: Vice President
<PAGE> 164
BARNETT BANK, N.A. PINELLAS
By: /s/ Michael S. Crowe
------------------------------------
Name: Michael S. Crowe
Title: Senior Vice President
<PAGE> 1
Exhibit 99.1
DANKA PRESS RELEASE
WORLD-CLASS PRODUCTS. WORLD-CLASS SERVICE.
FOR IMMEDIATE RELEASE WILLIAM T. FREEMAN
813-576-6003
DECEMBER 12, 1996 PAUL G. DUMOND
011-44-171-603-1515
DANKA SIGNS $1.275 BILLION CREDIT FACILITY
Danka Business Systems PLC (NASDAQ: DANKY) announces that it has signed a
$1.275 billion credit facility with a syndicate of international banks and
NationsBank N.A. as agent. The proceeds of the facility will be used: (i) to
finance the pending acquisition of Eastman Kodak Company's Office Imaging
business, previously announced on September 9, 1996, (ii) to refinance existing
bank indebtedness of the Company, and (iii) to provide additional working
capital and for general corporate purposes of the Company.
11201 Danka Circle North 107 Hammersmith Road
St. Petersburg, FL 33716 London, England W14 OQH
<PAGE> 1
Exhibit 99.2
DANKA PRESS RELEASE
WORLD-CLASS PRODUCTS. WORLD-CLASS SERVICE.
FOR IMMEDIATE RELEASE WILLIAM T. FREEMAN
813-576-6003
DECEMBER 12, 1996 PAUL G. DUMOND
011-44-171-603-1515
DANKA SHAREHOLDERS APPROVE ACQUISITION OF
EASTMAN KODAK'S OFFICE IMAGING BUSINESS
Danka Business Systems PLC (NASDAQ: DANKY) announces that the Ordinary
Resolution to approve the Company's acquisition of Kodak's Office Imaging
business was passed by the Company's shareholders at the Extraordinary General
Meeting held on December 11, 1996. As previously announced, Danka entered into
an agreement to acquire the sales, marketing, and equipment service operations
of Kodak Office Imaging business, as well as Kodak's facilities management
business known as Kodak Imaging Services. Kodak will retain its manufacturing
and research and development functions supporting the Office Imaging business.
In connection with a related supply agreement, Danka and Kodak will enter into
a strategic alliance whereby Kodak will supply high-volume copiers and printers
to the Company, making Danka the principal distributor of Kodak branded office
copiers and printers worldwide.
11201 Danka Circle North 107 Hammersmith Road
St. Petersburg, FL 33716 London, England W14 OQH
