<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(AMENDMENT NO.1)
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 31, 1997
THE STANDARD REGISTER COMPANY
Incorporated under the laws of Ohio
Commission File No. 01-1097 IRS Employer Identification No. 31-0455440
600 Albany Street, Dayton, Ohio 45401
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(937) 443-1000
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Registrant's Telephone Number, Including Area Code
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<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 31, 1997, The Standard Register Company (the "Registrant") acquired
all of the outstanding shares of stock of Uarco Incorporated and its
wholly-owned subsidiary, United Autographic Register Co., by a cash payment of
$245 million. The cash payment was provided from available corporate cash and a
five-year unsecured revolving credit agreement underwritten by KeyBank N.A. The
credit line provides for borrowings up to $300 million and bears interest at a
floating rate of the London Interbank Offered Rate (LIBOR) plus a spread
dependent upon the net debt to total capital ratio. On January 23, 1998, $200
million of the outstanding debt was swapped to an effective fixed interest rate
of 6.09%.
Uarco Incorporated was a wholly-owned subsidiary of Settsu Corporation of
Osaka, Japan. Uarco Incorporated produces and markets business forms, pressure
sensitive labels, business equipment supplies, and workflow systems to the U.S.
market. The business acquired is similar to that being conducted by the
Registrant and the Registrant intends to continue such use.
During fiscal year 1997, Uarco Incorporated sold the net assets of Crain
Drummond, which was operating as a wholly-owned subsidiary, and the net assets
of its York Tape & Label Division, both of which were operating as other than
business segments. Thus, these operations were not a part of the acquisition by
the Registrant.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
The following unaudited financial statements are filed as part of this
report:
Unaudited consolidated balance sheet of Uarco Incorporated and
subsidiaries as of September 30, 1997, and unaudited consolidated
statements of operations, stockholder's equity, and cash flows for the
nine months ended September 30, 1997.
The following audited financial statements are filed as part of this
report:
Audited consolidated balance sheets of Uarco Incorporated and
subsidiaries as of December 31, 1996 and 1995, and audited consolidated
statements of operations, stockholder's equity, and cash flows for the
years ended December 31, 1996 and 1995.
(b) Pro Forma Financial Information
The following pro forma financial information is filed as part of this
report:
Unaudited pro forma condensed consolidated balance sheet which combines
the unaudited consolidated balance sheet of The Standard Register Company
as of September 28, 1997 and the unaudited consolidated balance sheet of
Uarco Incorporated and subsidiaries as of September 30, 1997, along with
a description of the unaudited pro forma adjustments.
<PAGE> 3
Unaudited pro forma condensed consolidated statements of income which
combines the consolidated statement of income of The Standard Register
Company for the fiscal year ended December 29, 1996, and for the nine
months ended September 28, 1997 and the consolidated statements of
operations of Uarco Incorporated and subsidiaries for the year ended
December 31, 1996 and for the nine months ended September 30, 1997, along
with a description of the unaudited pro forma adjustments.
The aforementioned pro forma financial statements were prepared under the
assumption the acquisition of Uarco Incorporated had been consummated as
of January 1, 1996 for the December 29, 1996 financial statements and as
of December 30, 1996 for the September 28, 1997 financial statements.
These pro forma condensed financial statements may not be indicative of
the financial position and results of operations that actually would have
been obtained if the acquisition had been in effect or that may be
obtained in the future. Such statements should be read in conjunction
with the Registrant's audited financial statements. The assumptions and
adjustments used are described in the accompanying notes to the pro forma
financial statements.
The Registrant expects this business combination to achieve certain
synergies, for which the financial benefits have not been included in the
pro forma presentations.
(c) Exhibits
99 - Revolving Credit Agreement
<PAGE> 4
UARCO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
September 30
ASSETS 1997
------------
<S> <C>
CURRENT ASSETS
Cash and cash equivalents $ -
Accounts receivable, less allowance of $3,982 147,221
Inventories 24,659
Prepaid expenses 8,927
Other current assets 9,022
---------
Total current assets 189,829
PROPERTY, PLANT AND EQUIPMENT , NET 118,803
COST IN EXCESS OF FAIR VALUE OF NET ASSETS ACQUIRED,
net of accumulated amortization and writeoffs of $113,109 244,489
PREPAID PENSION 49,933
OTHER ASSETS 4,998
---------
Total assets $ 608,052
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 66,920
Securitized borrowings on accounts receivable 92,000
Accounts payable 29,754
Accrued interest expense 3,258
Accrued other expenses 4,242
Accrued restructuring 6,395
---------
Total current liabilities 202,569
---------
LONG-TERM LIABILITIES
Long-term debt and capital lease obligations 265,409
Other long-term liabilities 29,941
Deferred income taxes (4,882)
---------
Total long-term liabilities 290,468
---------
STOCKHOLDERS' EQUITY
Common stock, $.01 par value, 100 shares
authorized, issued and outstanding -
Additional paid-in capital 614,069
Accumulated deficit (499,054)
---------
Total stockholders' equity 115,015
---------
Total liabilities and stockholders' equity $ 608,052
=========
</TABLE>
<PAGE> 5
UARCO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Nine months
ended
September 30
1997
--------------
<S> <C>
REVENUE $ 422,265
---------
COST AND EXPENSE
Cost of products sold 324,631
Selling, general and administrative 107,353
Depreciation and amortization 18,988
Loss on sales of assets 77,887
Restructuring charges 9,428
Interest and debt expense 34,372
---------
Total cost and expense 572,659
---------
LOSS BEFORE INCOME TAXES (150,394)
INCOME TAX BENEFIT (993)
---------
NET LOSS $(149,401)
=========
</TABLE>
<PAGE> 6
UARCO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Nine months
ended
September 30
1997
--------------
<S> <C>
ADDITIONAL PAID-IN CAPITAL
Beginning balance $ 464,569
Capital contribution from parent 149,500
---------
Ending balance 614,069
---------
ACCUMULATED DEFICIT
Beginning balance (349,653)
Net loss (149,401)
---------
Ending balance (499,054)
---------
ACCUMULATED FOREIGN CURRENCY
TRANSLATION ADJUSTMENTS
Beginning balance (11,709)
Sale of subsidiary 11,709
---------
Ending balance -
---------
Total stockholders' equity $ 115,015
=========
</TABLE>
<PAGE> 7
UARCO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Nine months
ended
September 30
1997
------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(149,401)
---------
Add (deduct) items not affecting cash:
Depreciation 12,527
Amortization 6,461
Interest on accreting swap obligation 14,346
Provision for deferred income taxes (6,014)
Provision for bad debts 933
Loss on sale of assets 77,016
Increase (decrease) in cash arising from
changes in assets and liabilities:
Accounts receivable 5,197
Inventories (2,675)
Prepaid expenses and other current assets (2,405)
Accounts payable and accrued expenses (2,755)
Interest payable (334)
Other 950
---------
Net adjustments 103,247
---------
Net cash used in operating activities (46,154)
---------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (13,231)
Proceeds from sale of assets 33,537
---------
Net cash provided by investing activities 20,306
---------
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of accounts receivable 37,000
Capital contribution from parent 149,500
Repayment of term loans (18,919)
Net payments under revolving line of credit (54,565)
Proceeds received from accreting swap obligation 14,000
Repayment of other debt (102,317)
---------
Net cash provided by financing activities 24,699
---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,149)
Cash and cash equivalents at beginning of period 1,149
---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ -
=========
SUPPLEMENTAL CASH FLOW DISCLOSURES
Income taxes paid, net of refunds $ 127
Interest paid, net of capitalized interest 29,458
</TABLE>
<PAGE> 8
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Uarco Incorporated
We have audited the accompanying consolidated balance sheets of Uarco
Incorporated and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of operations, stockholder's equity, and cash flows for
the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Uarco Incorporated
and subsidiaries at December 31, 1996 and 1995, and the consolidated results of
their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
March 31, 1997
<PAGE> 9
UARCO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31
1996 1995
-----------------------------
(Thousands of Dollars)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,149 $ 19,856
Accounts receivable, net of allowances of $4,708 in
1996 and $4,468 in 1995 137,597 146,609
Inventories 36,370 40,871
Prepaid expenses 9,821 7,454
Other current assets 9,744 1,350
-----------------------------
Total current assets 194,681 216,140
Property, plant, and equipment, net 175,829 155,915
Cost in excess of fair value of net assets acquired,
net of accumulated amortization of $73,404 in
1996 and $64,457 in 1995 284,194 293,141
Prepaid pension 41,855 41,953
Other assets 6,679 2,487
-----------------------------
Total assets $ 703,238 $ 709,636
=============================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt $ 71,123 $ 32,201
Accounts payable 39,275 35,446
Accrued expenses 17,625 19,407
Accrued interest expense 3,592 4,207
-----------------------------
Total current liabilities 131,615 91,261
Deferred income taxes 7,011 7,465
Other long-term liabilities 30,343 33,528
Long-term debt and capital lease obligations 331,062 364,190
Junior subordinated note payable to Settsu Corporation 100,000 100,000
Commitments (Note 14)
Stockholder's equity:
Common stock, par value of $.01, 100 shares
authorized, issued, and outstanding - -
Additional paid-in capital 464,569 395,869
Accumulated deficit (349,653) (272,992)
Accumulated foreign currency translation adjustments (11,709) (9,685)
-----------------------------
Total stockholder's equity 103,207 113,192
-----------------------------
Total liabilities and stockholder's equity $ 703,238 $ 709,636
=============================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 10
UARCO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31
1996 1995
---------------------------
(Thousands of Dollars)
<S> <C> <C>
Revenues $ 653,576 $ 645,017
Cost of goods sold 476,386 458,796
Selling, general, and administrative expenses 167,191 142,725
Depreciation and amortization 27,748 34,210
Restructuring charges 6,481 8,261
---------------------------
Income (loss) from operations before interest and debt
expense (24,230) 1,025
Interest and debt expense 52,223 52,075
---------------------------
Loss from operations before income taxes (76,453) (51,050)
Income tax provision 208 1,407
---------------------------
Net loss ($76,661) ($52,457)
===========================
Net loss per share ($767) ($525)
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 11
UARCO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1996 AND 1995
<TABLE>
<CAPTION>
Accumulated
Foreign
Additional Currency
Paid-In Accumulated Translation
Capital Deficit Adjustments
----------------------------------------------
(Thousands of Dollars)
<S> <C> <C> <C>
Balance, December 31, 1994 $ 343,869 ($220,535) ($ 11,283)
Net loss - (52,457) -
Capital contribution from parent 52,000 - -
Translation adjustment - - 1,598
----------------------------------------------
Balance, December 31, 1995 395,869 (272,992) (9,685)
Net loss - (76,661) -
Capital contribution from parent 68,700 - -
Translation adjustment - - (2,024)
----------------------------------------------
Balance, December 31, 1996 $ 464,569 ($349,653) ($ 11,709)
==============================================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 12
UARCO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31
1996 1995
----------------------------------
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($76,661) ($52,457)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation 18,820 25,283
Amortization 8,928 8,927
Interest on accreting swap obligation 15,555 12,463
Deferred income tax expense (benefit) (91) 119
Net curtailment gain - (6,565)
Provision for bad debts 4,535 3,718
Write-down of property and equipment - 1,684
Changes in assets and liabilities:
Accounts receivable 4,356 (25,361)
Inventories 4,380 3,333
Prepaid expenses and other current assets (10,795) 359
Accounts payable and accrued expenses 3,120 8,323
Interest payable (615) (747)
Other (8,803) 4,251
----------------------------------
Net cash used in operating activities (37,271) (16,670)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (39,689) (39,904)
Proceeds from sale of assets 896 836
----------------------------------
Net cash used in investing activities (38,793) (39,068)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contribution from parent 68,700 52,000
Repayment of term loans (32,274) (21,532)
Net proceeds under revolving credit loan 7,954 15,000
Proceeds received from accreting swap obligation 14,000 14,000
Repayment of other debt 650 (819)
----------------------------------
Net cash provided by financing activities 59,030 58,649
Effect of exchange rate changes on cash (1,673) (1,081)
----------------------------------
Net increase (decrease) in cash and cash equivalents (18,707) 1,830
Cash and cash equivalents at beginning of year 19,856 18,026
----------------------------------
Cash and cash equivalents at end of year $1,149 $19,856
==================================
SUPPLEMENTAL DISCLOSURES
Income taxes paid (received), net of refunds $1,833 ($202)
Interest paid, net of capitalized interest 36,429 40,058
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 13
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
(Thousands of Dollars)
1. BACKGROUND
On October 12, 1988, Settsu Holding Corporation (SHC), a wholly owned subsidiary
of Settsu Corporation, Osaka, Japan, purchased the common stock of Uarco
Incorporated (the Company). On December 15, 1989, SHC purchased R. L. Crain,
Inc., a Canadian company, which was then merged with Drummond Business Forms
(1984) Ltd., a wholly owned subsidiary of the Company.
The Company operates in a single industry segment and is engaged primarily in
the design, manufacture and sale of business forms in North America.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Uarco Incorporated
and its subsidiaries. All significant intercompany transactions and balances are
eliminated in consolidation.
PURCHASE ACCOUNTING
The acquisitions of the Company and a Canadian subsidiary were accounted for as
purchases. The assets and liabilities acquired were recorded at their fair
values at the dates of acquisition. Purchase price in excess of the fair value
of net assets acquired is being amortized on the straight-line method over 40
years.
REVENUE RECOGNITION
The Company generally recognizes revenue at the time of shipment. Under
contractual arrangements with some customers, custom forms which are stored for
future delivery are recognized as revenue when manufacturing is complete and the
forms are shipped to a storage facility.
CASH EQUIVALENTS
The Company considers all highly liquid, short-term investments purchased with a
maturity of three months or less to be cash equivalents.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined on the
last-in, first-out (LIFO) method for U.S. inventories and the first-in,
first-out (FIFO) method for Canadian inventories.
PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment in service at the acquisition dates were recorded
at estimated fair values, and additions subsequent to those dates, are recorded
at cost. Depreciation is recorded principally on the straight-line method over
the estimated useful lives of the individual assets, which are 3 to 20 years for
machinery and equipment and 10 to 50 years for buildings and improvements.
<PAGE> 14
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
OTHER ASSETS
Other assets consist principally of pension plan assets in excess of the
projected benefit obligation and unamortized debt issuance costs. Unamortized
debt issuance costs are being amortized on the straight-line method over the
term of the related debt instruments from 5 to 10 years.
INCOME TAXES
The domestic taxable income of the Company is included in the consolidated
federal income tax return of SHC. The effects of income taxes have been computed
as if the Company filed a separate return. Crain Drummond files a separate tax
return in Canada covering its consolidated operations.
NET LOSS PER SHARE
Net loss per share is calculated using the average number of common shares
outstanding.
CONCENTRATION OF CREDIT RISK
The Company sells products to domestic and foreign customers and extends credit
based on an evaluation of the customer's financial conditions, generally without
requiring collateral. Exposure to losses on receivables is principally dependent
on each customer's financial condition. The Company monitors its exposure for
credit losses and maintains allowances for anticipated losses.
INTERNAL USE COMPUTER SOFTWARE COSTS
Costs incurred for computer software developed or obtained for internal use are
capitalized by the Company. These costs include external direct costs of
software and services and payroll and payroll related costs of employees who are
directly associated with the internal use computer software development. These
costs are being amortized on the straight-line method over five years once the
software is placed in service.
ADVERTISING EXPENSE
The cost of advertising is charged to expense as incurred. Catalogue costs are
recorded as prepaids and are charged to expense over the period of intended use.
The Company incurred $6,589 and $5,712 in advertising costs during 1996 and
1995, respectively.
TRANSLATION OF FOREIGN CURRENCIES
All assets and liabilities in the balance sheet of the Company's foreign
subsidiary whose functional currency is other than the U.S. dollar, are
translated at year-end exchange rates, except stockholder's equity, which is
translated at historical rates. Translation gains and losses are accumulated as
a separate component of stockholder's equity.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles necessarily requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements as well as revenues and expenses during the reporting period. Actual
amounts when ultimately realized could differ from those estimates.
<PAGE> 15
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECLASSIFICATION
Certain reclassifications have been made to the 1995 financial statements to
conform to the 1996 presentation.
3. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
December 31
1996 1995
-------- -------
<S> <C> <C>
Finished goods $ 14,183 $ 15,206
Work in process 5,643 8,369
Raw materials 16,544 20,539
-------- -------
Total at FIFO 36,370 44,114
LIFO adjustment - ( 3,243)
-------- -------
$ 36,370 $ 40,871
======== =======
</TABLE>
Inventories valued using the LIFO method of determining cost comprised
approximately 70% of total inventories at December 31, 1996 and 1995.
4. PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment are summarized as follows:
<TABLE>
<CAPTION>
December 31
1996 1995
------- -------
<S> <C> <C>
Land and improvements $ 26,920 $ 27,079
Buildings and leasehold improvements 54,187 50,273
Machinery and equipment 205,039 190,861
Construction in progress 39,377 30,580
-------- --------
325,523 298,793
Accumulated depreciation (149,694) (142,878)
------- -------
$175,829 $155,915
======= =======
</TABLE>
5. SALES OF ACCOUNTS RECEIVABLE
The Company has entered into an agreement that allows for the sale, without
recourse, of a fractional interest in a defined pool of trade accounts
receivable for up to $55,000. At December 31, 1996 and 1995, $55,000 and
$40,000, respectively, had been sold under this agreement, and the sale is
reflected as a reduction of accounts receivable in the consolidated balance
sheets. The proceeds from the sale were used to repay a portion of the Company's
term loan. The fees paid by the Company under the agreement are based on certain
variable market rate indices and are included in interest and debt expense. The
agreement expires in September 1997. The Company may request to extend the
termination date for a period of 180 days. On March 14, 1997, this agreement was
amended to increase the amount that could be sold under the agreement to $95,000
and to include additional receivables in the defined pool eligible for sale.
Proceeds from the March 14, 1997 sale of receivables were used to repay the
Company's term loan and a portion of its revolving credit loan.
<PAGE> 16
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. SALES OF ACCOUNTS RECEIVABLE (CONTINUED)
Under the terms of the agreement, the Company is required to maintain certain
affirmative and negative covenants including minimum coverage and maximum
dilution ratios, as defined. As of December 31, 1996, the Company was in
compliance with all covenants. The agreement is collateralized by the Company's
inventory, equipment, and certain other tangible and intangible assets, as
defined in the agreement. The Company maintains an allowance for accounts
receivable based upon the expected collectibility of all trade accounts
receivable, including receivables sold.
6. LONG-TERM DEBT
Long-term debt other than amount due to Settsu Corporation is
summarized as follows:
<TABLE>
<CAPTION>
December 31
1996 1995
-------- ---------
<S> <C> <C>
Bank term loan $ 16,000 $ 46,000
Revolving credit loan 105,000 105,000
Senior subordinated notes, due March 15, 1999 100,000 100,000
Accreting swap obligation 152,154 122,599
$31 million Canadian dollar term loan, principal payable in
annual installments of varying amounts through
February 12, 2000 17,366 19,731
Other 11,665 3,061
-------- ---------
402,185 396,391
Less: current portion 71,123 32,201
-------- --------
Total long-term debt $331,062 $364,190
======== ========
</TABLE>
The rate of interest on the bank term loan and the revolving credit loan is the
London Interbank Offered Rate (LIBOR) for U.S. dollar deposits, as adjusted for
reserve requirements, plus a base margin. The Company must also pay under both
agreements a supplementary margin of zero to one-half of 1% based on the ratio
of operating cash flow to total interest and a commitment fee of one-half of 1%
on the amount available under the revolving credit loan. At December 31, 1996,
the interest rate including supplementary margin was 6.56% for the term loan and
7.10% for the revolving credit loan.
The bank term loan and revolving credit loan are collateralized by all of the
outstanding stock of the Company. In addition, SHC's parent, Settsu Corporation,
has entered into a support agreement that provides that the minimum net worth of
the Company, as defined, will exceed $100,000 reduced by a maximum of $10,000 in
certain eligible expenses as defined in the agreement, which when incurred, will
permanently reduce the net worth requirement on a dollar-for-dollar basis. As of
December 31, 1996, the actual minimum required net worth was $96,990.
The bank term loan and revolving credit loan represent amounts under the
Company's Credit Agreement (the Agreement) with a number of Japanese, European,
and American commercial banks (the Banks). On March 28, 1997, the Company and
the Banks completed an amended agreement (the Amended Agreement). Under the
Amended Agreement, $16,000 was repaid on the term loan, and an additional
$24,000 was repaid under the revolving credit loan. A loan fee on one-half of 1%
was paid to the Banks in connection with the amendment. The agreement, as
amended, reduces the maximum borrowing capacity on the revolving credit loan
from $105,000 to $81,000 through August 14, 1997 and to $61,000 thereafter. The
revolving credit loan expires January 14, 1998.
<PAGE> 17
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. LONG-TERM DEBT (CONTINUED)
On March 31, 1997, the Company entered into an agreement to sell its York Tape &
Label Division for $24,000 subject to certain working capital adjustments at the
time of closing. The net assets included in the sale have a book value of
approximately $16,000. The sale is expected to be completed in May 1997. The
Company anticipates using the proceeds to repay a portion of the revolving
credit loan.
The rate of interest on the senior subordinated notes is the LIBOR rate for U.S.
dollar deposits plus 1%, through March 17, 1997, and 1.5% thereafter. In
addition, the Company must pay a supplementary margin of zero to one-half of 1%
based on the ratio of operating cash flow to total interest. At December 31,
1996, the interest rate including supplementary margin was 7.15%. The senior
subordinated notes are subordinate to all debt other than the junior
subordinated note. On March 28, 1997 the Company and the senior subordinated
noteholders amended the senior subordinated notes. Under the amendment, the rate
of interest was increased to LIBOR plus 1-1/2% as of March 17, 1997, and the
noteholders received a fee of 0.6%. Principal payments of $33,300, $33,300, and
$33,400 are due on January 15, 1998, March 16, 1998 and March 15, 1999,
respectively.
The bank term loan, revolving credit loan, and senior subordinated notes contain
affirmative and negative covenants, including minimum current ratios; maximum
leverage and senior leverage ratios; minimum coverage and minimum debt service
ratios; restrictions on additional borrowings; limitations on capital
expenditures, loans, and certain investments; restrictions on the payment of
dividends and purchase of Company stock restrict the consolidation of the
Company with any other party. The Company was in compliance with all covenants
at December 31, 1996.
The Company issued a junior subordinated note to Settsu Corporation and at the
same time entered into an accreting interest rate swap agreement with a third
party that guarantees the annual payment of interest and defers the payment of
principal until March 30, 1999, the maturity date of the note. The note bears
interest at 14%. Interest accrues on the interest payment made by third parties
under the agreement at a rate of 11.69%. On March 31, 1997, the junior
subordinated note was converted to common stock.
The Company's Canadian subsidiary has a term loan agreement with three Canadian
banks. Interest on the Canadian term loan is the banker's acceptance rate plus a
stamping fee (6.90% and 6.95% at December 31, 1996 and 1995, respectively). This
loan agreement also contains certain affirmative and negative covenants. The
Company's Canadian subsidiary was in compliance with all covenants at December
31, 1996.
Outstanding letters of credit amounted to $27,500 at December 31, 1996.
Maturities of long-term debt and minimum annual capital lease payments, payable
to date of exercising purchase right, for each of the five years subsequent
December 31, 1996, are $71,123 in 1997; $132,698 in 1998; $191,257 in 1999;
$5,763 in 2000; and $238 in 2001.
<PAGE> 18
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:
CASH AND CASH EQUIVALENTS
The carrying amount reported in the balance sheet for cash and cash
equivalents approximates its fair value.
LONG-TERM DEBT
The fair value of the Company's long-term debt is estimated using
discounted cash flow analyses, based on the Company's current
incremental borrowing rates for similar types of borrowing
arrangements.
The carrying amounts of the Company's financial instruments approximate their
fair value.
8. LEASES
The Company leases certain manufacturing and office facilities, production
equipment, data processing equipment, communication equipment, and vehicles
under operating leases with varying renewal provisions. Certain facility leases
require the Company to pay property taxes and insurance.
Future minimum rental commitments under noncancelable operating leases with an
initial or remaining noncancelable term in excess of one year as of December 31,
1996, are as follows:
<TABLE>
<S> <C>
1997 $ 29,745
1998 26,703
1999 19,733
2000 13,840
2001 7,934
Thereafter 30,476
--------
Total future minimum lease payments $128,431
========
</TABLE>
Rental expense charged to expense in 1996 and 1995 was $18,683 and
$11,061, respectively.
9. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the amount of assets and liabilities for financial reporting purposes
and the amounts used for income taxes. Deferred tax assets also include the
future tax benefit from loss carryforwards. Significant components of the
Company's deferred tax assets and liabilities at December 31 were:
<PAGE> 19
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. INCOME TAXES (CONTINUED)
<TABLE>
<CAPTION>
1996 1995
--------- -------
<S> <C> <C>
Deferred tax assets resulting from:
Net operating loss carryforwards $ 58,712 $48,516
Postretirement reserves 7,776 7,668
Interest 49,805 30,750
Other 5,897 8,884
-------- --------
Total deferred tax assets 122,190 95,818
Valuation allowance for deferred tax assets 78,416 54,419
-------- --------
43,774 41,399
Deferred tax liabilities resulting from:
Capitalization of software 4,845 2,805
Overfunded pension plan 18,619 18,405
Book over tax basis in property, plant, and equipment 24,112 25,746
Other 3,209 1,908
-------- --------
Total deferred tax liabilities 50,785 48,864
-------- --------
Net deferred tax liabilities $ 7,011 $ 7,465
======== ========
</TABLE>
At December 31, 1996, the Company has net operating loss carryforwards of
$150,400 for income tax purposes that expire from 2004 to 2011. For financial
reporting purposes, a valuation allowance of $78,416 has been provided at
December 31, 1996, to offset a portion of the deferred tax assets related to
those carryforwards. The net operating loss carryforwards expire as follows:
<TABLE>
<CAPTION>
Net
Years ending Operating
December 31 Loss
------------ ---------
<S> <C>
2004 $11,500
2005 20,100
2006 24,300
2007 25,000
2008 41,400
2010 3,200
2011 24,900
</TABLE>
The components of the income tax provision (benefit) are as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Current:
Federal $ - $ -
State 225 300
Foreign 74 988
----- ------
299 1,288
Deferred:
Federal - -
State - -
Foreign ( 91) 119
----- ------
( 91) 119
----- ------
$ 208 $1,407
===== ======
</TABLE>
<PAGE> 20
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9. INCOME TAXES (CONTINUED)
The reconciliation of income tax (benefit) computed at the federal statutory
rate to income tax expense is:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Federal statutory rate (35.0)% (35.0)%
Permanent differences, primarily goodwill
amortization and nondeductible interest 4.4 7.0
Net operating loss to be carried forward
to future periods 30.6 28.0
State taxes .3 .6
Foreign taxes - 2.2
----- -----
.3% 2.8%
===== =====
</TABLE>
A tax benefit of the loss carryforward amounting to $63,463 has been provided in
the financial statements through reduction in deferred taxes that would
otherwise have been provided absent the loss carryforward or through the use of
tax planning strategies. Hence, any future utilization of the loss carryforward
up to this amount to reduce taxes payable will not result in reduction of
financial statement tax provisions.
10. PENSION PLANS
The Company has pension plans covering substantially all domestic and certain
Canadian employees who meet eligibility requirements. Benefits under these plans
are primarily based on final average compensation as defined within the
provisions of the individual plans. The Company's funding policy is consistent
with the funding requirements of federal law and regulations concerning
pensions.
The following table reconciles the funded status and the amount reported in the
Company's balance sheets for the pension plans.
<TABLE>
<CAPTION>
December 31
-------------------------------------------------------
1996 1995
----------------------- -----------------------
Domestic Foreign Domestic Foreign
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Actuarial present value of benefit
obligations
Accumulated benefit obligation:
Vested $(140,065) $ (18,274) $(148,092) $ (18,288)
Nonvested (13,910) - (4,477) -
--------- --------- --------- ---------
$(153,975) $ (18,274) $(152,569) $ (18,288)
========= ========= ========= =========
Projected benefit obligation for
service rendered to date $(173,997) $ (18,372) $(173,621) $ (18,376)
Less: Plan assets at fair value 227,362 18,544 208,335 18,068
--------- --------- --------- ---------
Plan assets in excess of (less than)
projected benefit obligation 53,365 172 34,714 (308)
Adjustments for deferral of benefit
liability not yet recognized in cost:
Unrecognized prior service cost 3,021 - 3,549 -
Unrecognized net (gain) loss (14,703) - 3,998 -
--------- --------- --------- ---------
Pension asset (liability) recognized
in the balance sheet $ 41,683 $ 172 $ 42,261 $ (308)
========= ========= ========= =========
</TABLE>
<PAGE> 21
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. PENSION PLANS (CONTINUED)
Net pension cost (credit) for the years ended December 31, 1996 and 1995
includes the following components:
<TABLE>
<CAPTION>
1996 1995
-------------------------- ---------------------------
Domestic Foreign Domestic Foreign
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Service cost $ 5,274 $ 73 $ 2,863 $ 68
Interest cost on projected benefit
obligations 12,959 1,417 12,358 1,412
Actual return on plan assets ( 29,352) ( 1,432) (46,342) ( 1,383)
Net amortization and deferral 12,314 23 29,931 60
--------- --------- --------- -------
Net pension cost (credit) $ 1,195 $ 81 $( 1,190) $ 157
========= ========= ========= =======
</TABLE>
Assumptions used in the actuarial computations at December 31 were:
<TABLE>
<CAPTION>
1996 1995
-------------------------- ------------------------
Domestic Foreign Domestic Foreign
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Discount rate 7.25% 8.0% 7.25% 8.0%
Rate of increase in compensation levels 5.0 4.5 5.0 4.5
Expected long-term rate of return on assets 9.5 8.0 9.5 8.0
</TABLE>
Plan assets consist primarily of stocks, bonds, and cash equivalents.
In addition to the defined benefit plans described above, the Company also
sponsors a defined contribution plan covering eligible domestic employees.
Employee contributions range from 1% to 15% of pretax compensation. The Company
provides matching contributions equal to 50% beginning April 1, 1996 and 10% in
1995 of employee contributions up to 5% of employee compensation. The Company's
contribution expense was approximately $1,727 in 1996 and $377 in 1995.
11. POSTRETIREMENT MEDICAL BENEFITS
The Company sponsors a defined-benefit unfunded postretirement plan that covers
both domestic salaried and nonsalaried employees. The plan provides medical
benefits and is noncontributory assuming normal retirement.
The following table reconciles the plan's funded status and the amount reported
in the Company's balance sheets. Accrued postretirement medical cost includes
$25,400 recorded as part of the Company's acquisition adjustments.
<TABLE>
<CAPTION>
December 31
1996 1995
--------- ---------
<S> <C> <C>
Accumulated postretirement medical obligation
retirees $( 24,772) $( 29,632)
Unrecognized prior service costs ( 11,791) ( 12,976)
Unrecognized net loss 17,255 22,946
--------- ---------
Accrued postretirement medical cost $( 19,308) $( 19,662)
========= =========
</TABLE>
During 1995, the Company elected to terminate all retiree medical benefits for
active employees effective January 1, 1996. This change resulted in a
curtailment gain of $6,565.
<PAGE> 22
UARCO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11. POSTRETIREMENT MEDICAL BENEFITS (CONTINUED)
Net postretirement medical cost for the years ended December 31, 1996 and 1995,
includes the following components:
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Service cost $ - $1,203
Interest cost 1,974 3,227
Net amortization and deferrals 113 881
------ ------
Net postretirement medical cost $2,087 $5,311
====== ======
</TABLE>
Assumptions used in the actuarial computations at December 31, 1996 and 1995
were as follows:
Discount rate 7.25%
Health care cost trend Pre-65 11.4% graded down
to 4.5% by 2007
Post-65 10.5% graded down
to 4.5% by 2007
The health care cost trend assumption has a significant effect on the amounts
reported. To illustrate, increasing the assumed health care cost trend rates by
one percentage point in each year would increase the accumulated postretirement
benefit obligation as of December 31, 1996, by $2,120 and the aggregate of the
service and interest cost components of the net postretirement medical cost for
the year then ended by $173.
12. FOREIGN OPERATIONS
The Company has operations located in Canada. Canadian sales approximated 22%
and 21% of consolidated sales in 1996 and 1995, respectively. The carrying
amount of the net assets located in Canada was $64,459 and $67,014 at December
31, 1996 and 1995, respectively.
13. RESTRUCTURING CHARGES
During 1996, the Company recognized restructuring charges of $6,481 associated
with implementation of its Strategic Improvement Plan, a program designed to
reduce costs and enhance revenue. The Strategic Improvement Plan initiatives
include a reduction in the number of employees, reconfiguration of the Company's
current plant and distribution network, and a change in the Company's management
structure. The charges consist principally of write-downs of plant and equipment
to estimate realizable values, facilities consolidation costs, and employee
severance pay.
14. COMMITMENTS
At December 31, 1996, the Company has entered into firm commitments for capital
expenditures of approximately $5,266 for the purchase of machinery and
equipment.
15. SUBSEQUENT EVENTS [UNAUDITED]
On June 30, 1997, the Company sold its Crain Drummond subsidiary for
approximately $44 million. Proceeds received from the sale were used to repay a
portion of the Company's outstanding debt.
On December 31, 1997, the Company was acquired by The Standard Register Company
at a purchase price of $245 million, excluding the long-term debt of the
Company.
<PAGE> 23
PRO FORMA FINANCIAL INFORMATION
THE STANDARD REGISTER COMPANY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AT SEPTEMBER 28, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THE
STANDARD
REGISTER UARCO PRO FORMA
A S S E T S COMPANY INC. ADJUSTMENTS PRO FORMA
----------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 78,567 $ (15,000)(1) $ 63,567
Short-term investments 16,339 16,339
Accounts receivable 168,655 $ 147,221 315,876
Inventories 87,174 24,659 111,833
Other current assets 13,943 17,949 31,892
----------- ------------- ------------- -------------
Total current assets 364,678 189,829 (15,000) 539,507
----------- ------------- ------------- -------------
PROPERTY, PLANT AND EQUIPMENT , NET 251,548 118,803 370,351
COST IN EXCESS OF FAIR VALUE OF NET ASSETS ACQUIRED 244,489 (244,489)(4)
OTHER ASSETS 8,686 54,931 16,045 (5) 79,662
----------- ------------- ------------- -------------
Total assets $ 624,912 $ 608,052 $ (243,444) $ 989,520
=========== ============= ============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 66,920 $ (66,600)(3) $ 320
Securitized borrowings on accounts receivable 92,000 (92,000)(3)
Accounts payable $ 20,587 29,754 50,341
Accrued interest expense 3,258 (3,245)(3) 13
Accrued other expenses 43,994 4,242 48,236
Customer deposits 21,189 21,189
Deferred service contract income 8,352 8,352
Accrued restructuring 6,395 6,395
----------- ------------- ------------- -------------
Total current liabilities 94,122 202,569 (161,845) 134,846
----------- ------------- ------------- -------------
LONG-TERM LIABILITIES
Long-term debt and capital lease obligations 4,600 265,409 230,000 (2) 235,674
(264,335)(3)
Retiree health care obligation 28,718 28,718
Other long-term liabilities 29,941 29,941
Deferred income taxes 16,785 (4,882) 11,903
----------- ------------- ------------- -------------
Total long-term liabilities 50,103 290,468 (34,335) 306,236
----------- ------------- ------------- -------------
SHAREHOLDERS' EQUITY
----------- ------------- ------------- -------------
Total shareholders' equity 480,687 115,015 (47,264)(6) 548,438
----------- ------------- ------------- -------------
Total liabilities and shareholders' equity $ 624,912 $ 608,052 $ (243,444) $ 989,520
=========== ============= ============= =============
</TABLE>
(1) To remove cash paid at closing.
(2) To record debt incurred to finance the acquisition.
(3) To remove debt and accrued interest not assumed by The Standard Register
Company.
(4) To eliminate goodwill previously recorded by UARCO Inc.
(5) To eliminate existing net unrecognized values for prior service costs and
net gain related to defined benefit plans.
(6) Represents net effect of pro forma adjustments.
<PAGE> 24
PRO FORMA FINANCIAL INFORMATION
THE STANDARD REGISTER COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1997
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THE
STANDARD
REGISTER UARCO PRO FORMA
COMPANY INC. ADJUSTMENTS (7) PRO FORMA DISPOSITIONS (8) PRO FORMA
---------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUE $ 703,824 $ 422,265 $ (566) (4) $ 1,125,523 $ (77,476) $ 1,048,047
---------- ----------- ------------ ------------ ----------- ------------
COST AND EXPENSE
Cost of products sold 416,244 324,631 740,875 (59,608) 681,267
Engineering and research 7,020 7,020 7,020
Selling, general and administrative 171,010 107,353 278,363 (16,156) 262,207
Depreciation and amortization 28,339 18,988 (6,461) (1) 40,866 (2,107) 38,759
Interest and debt expense 218 34,372 (33,548) (2) 11,392 (680) 10,712
10,350 (3)
Loss on sale of assets 77,887 77,887 (77,887) -
Restructuring charges 9,428 9,428 (2,727) 6,701
---------- ----------- ------------ ------------ ----------- ------------
Total cost and expense 622,831 572,659 (29,659) 1,165,831 (159,165) 1,006,666
---------- ----------- ------------ ------------ ----------- ------------
INCOME (LOSS) BEFORE INCOME TAXES 80,993 (150,394) 29,093 (40,308) 81,689 41,381
---------- ----------- ------------ ------------ ----------- ------------
INCOME TAXES 32,796 (993) 11,725 (5) (17,081) 32,921 (5) 15,840
(60,609) (6)
---------- ----------- ------------ ------------ ----------- ------------
NET INCOME (LOSS) $ 48,197 $(149,401) $ 77,977 $ (23,227) $ 48,768 $ 25,541
========== =========== ============ ============ =========== ============
Average Shares Outstanding 28,498 28,498 28,498
Common Stock Equivalents 203 203 203
EARNINGS PER SHARE
Basic $ 1.69 $ (0.82) $ 0.90
========== =============== ============
Diluted $ 1.68 $ (0.81) $ 0.89
========== =============== ============
</TABLE>
(1) To remove goodwill amortization of UARCO Inc.
(2) To remove interest expense of UARCO Inc. debt not assumed.
(3) To record additional estimated interest expense resulting from the use of
debt to finance the acquisition.
(4) To remove interest income earned on cash paid at closing.
(5) To record tax effect, using a 40.3% combined federal and state effective tax
rate, on the net pro forma adjustments.
(6) To record tax benefit, using a 40.3% combined federal and state effective
tax rate, of UARCO Inc. Net Loss.
(7) The Standard Register Company expects to achieve certain synergies in
relation to the business combination.
Such synergies are not included in the above pro forma adjustments.
(8) To remove profit and loss for Crain Drummond and York Tape and Label for the
entire period.
<PAGE> 25
PRO FORMA FINANCIAL INFORMATION
THE STANDARD REGISTER COMPANY
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 29, 1996
(DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THE
STANDARD
REGISTER UARCO PRO FORMA
COMPANY INC. ADJUSTMENTS (7) PRO FORMA DISPOSITIONS (8) PRO FORMA
---------- ------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
REVENUE $ 943,979 $ 653,576 $ (765) (4) $1,596,790 $ (176,898) $1,419,892
---------- ------------ ------------ ------------- ------------- ------------
COST AND EXPENSE
Cost of products sold 575,316 476,386 1,051,702 (131,393) 920,309
Engineering and research 7,842 7,842 7,842
Selling, general and administrative 217,671 167,191 384,862 (32,609) 352,253
Depreciation and amortization 34,814 27,748 (8,947) (1) 53,615 (4,468) 49,147
Interest and debt expense 532 52,223 (50,343) (2) 16,212 (1,661) 14,551
13,800 (3)
Restructuring charges 6,481 6,481 (1,803) 4,678
---------- ------------ ------------ -------------
Total cost and expense 836,175 730,029 (45,490) 1,520,714 (171,934) 1,348,780
---------- ------------ ------------ ------------- ------------- ------------
INCOME (LOSS) BEFORE INCOME TAXES 107,804 (76,453) 44,725 76,076 (4,964) 71,112
---------- ------------ ------------ ------------- ------------- ------------
INCOME TAXES 44,647 208 18,024 (5) 32,068 (2,000) 30,068
(30,811) (6)
---------- ------------ ------------ ------------- ------------- ------------
NET INCOME (LOSS) $ 63,157 $ (76,661) $ 57,512 $ 44,008 $ (2,964) $ 41,044
========== ============ ============ ============= ============= ============
Average Shares Outstanding 28,687 28,687 28,687
Common Stock Equivalents 118 118 118
EARNINGS PER SHARE
Basic $ 2.20 $ 1.53 $ 1.43
========== ============= ============
Diluted $ 2.19 $ 1.53 $ 1.42
========== ============= ============
</TABLE>
(1) To remove goodwill amortization of UARCO Inc.
(2) To remove interest expense of UARCO Inc. debt not assumed.
(3) To record additional estimated interest expense resulting from the use of
debt to finance the acquisition.
(4) To remove interest income earned on cash paid at closing.
(5) To record tax effect, using a 40.3% combined federal and state effective
tax rate, on the net pro forma adjustments.
(6) To record tax benefit, using a 40.3% combined federal and state effective
tax rate, of UARCO Inc. Net Loss.
(7) The Standard Register Company expects to achieve certain synergies in
relation to the business combination. Such synergies are not included in
the above pro forma adjustments.
(8) To remove profit and loss for Crain Drummond and York Tape and Label for
the entire period.
<PAGE> 26
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
THE STANDARD REGISTER COMPANY
By: /s/ C.J. Brown
C.J. Brown, Senior Vice President,
Administration, Treasurer & Chief
Financial Officer
Dated March 13, 1998
<PAGE> 1
================================================================================
================================================================================
CREDIT AGREEMENT
DATED AS OF
DECEMBER 15, 1997
AMONG
THE STANDARD REGISTER COMPANY
AS BORROWER
THE LENDING INSTITUTIONS NAMED THEREIN
AS LENDERS
KEYBANK NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT
================================================================================
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. DEFINITIONS AND TERMS...........................................................................1
1.1. Certain Defined Terms...........................................................................1
1.2. Computation of Time Periods....................................................................14
1.3. Accounting Terms...............................................................................14
1.4. Terms Generally................................................................................14
SECTION 2. AMOUNT AND TERMS OF LOANS......................................................................15
2.1. Commitments for Revolving Loans................................................................15
2.2. Procedures for Revolving Borrowings............................................................15
2.3. Pro Rata Revolving Borrowings..................................................................17
2.4. Competitive Bid Loans..........................................................................17
2.5. Refunding of, or Participation in, Swing Line Revolving Loans..................................20
2.6. Notes..........................................................................................21
2.7. Conversions of General Revolving Loans.........................................................22
2.8. Interest on Revolving Loans....................................................................23
2.9. Interest Periods...............................................................................24
2.10. Increased Costs, Illegality, etc...............................................................25
2.11. Breakage Compensation..........................................................................26
2.12. Change of Lending Office; Replacement of Lenders...............................................27
SECTION 3. FEES...........................................................................................27
3.1. Facility Fee...................................................................................27
3.2. Other Fees.....................................................................................28
3.3. Computations of Fees..........................................................................28
SECTION 4. COMMITMENTS....................................................................................28
4.1. Voluntary Termination/Reduction of Commitments.................................................28
4.2. Mandatory Termination of Commitments, etc......................................................29
4.3. Extension of Maturity Dates....................................................................29
SECTION 5. PAYMENTS.......................................................................................29
5.1. Voluntary Prepayments of Revolving Loans.......................................................29
5.2. Mandatory Prepayments..........................................................................30
5.3. Method and Place of Payment....................................................................31
5.4. Net Payments...................................................................................31
5.5. Withholding Tax Exemption......................................................................31
SECTION 6. CONDITIONS PRECEDENT...........................................................................32
6.1. Conditions Precedent at Initial Borrowing Date.................................................32
6.2. Conditions Precedent to All Loans (other than Competitive Bid Borrowings)......................33
6.3. Conditions Precedent to Each Competitive Bid Borrowing.........................................33
SECTION 7. REPRESENTATIONS AND WARRANTIES.................................................................34
7.1. Corporate Status, etc..........................................................................34
7.2. Subsidiaries...................................................................................34
7.3. Corporate Power and Authority, etc.............................................................34
7.4. No Violation...................................................................................34
7.5. Governmental Approvals.........................................................................34
7.6. Litigation.....................................................................................35
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
7.7. Use of Proceeds; Margin Regulations............................................................35
7.8. Financial Statements, etc......................................................................35
7.9. No Material Adverse Change.....................................................................36
7.10. Tax Returns and Payments.......................................................................36
7.11. Title to Properties, etc.......................................................................36
7.12. Lawful Operations, etc.........................................................................36
7.13. Environmental Matters..........................................................................36
7.14. Compliance with ERISA..........................................................................37
7.15. Intellectual Property, etc.....................................................................37
7.16. Investment Company.............................................................................37
7.17. Existing Indebtedness..........................................................................37
7.18. True and Complete Disclosure...................................................................38
SECTION 8. AFFIRMATIVE COVENANTS..........................................................................38
8.1. Reporting Requirements.........................................................................38
8.2. Books, Records and Inspections.................................................................40
8.3. Insurance......................................................................................40
8.4. Payment of Taxes and Claims....................................................................41
8.5. Corporate Franchises...........................................................................41
8.6. Good Repair....................................................................................41
8.7. Compliance with Statutes, etc..................................................................41
8.8. Compliance with Environmental Laws.............................................................41
8.9. Fiscal Years, Fiscal Quarters..................................................................41
8.10. Hedge Agreements, etc..........................................................................42
8.11. Most Favored Covenant Status...................................................................42
8.12. Senior Debt....................................................................................42
SECTION 9. NEGATIVE COVENANTS.............................................................................42
9.1. Changes in Business............................................................................42
9.2. Consolidation, Merger, or Sale of Assets, etc..................................................42
9.3. Liens..........................................................................................43
9.4. Indebtedness...................................................................................44
9.5. Consolidated Debt/Consolidated Total Capital Ratio.............................................45
9.6. Interest Coverage Ratio........................................................................45
9.7. Transactions with Affiliates...................................................................45
9.8. Plan Terminations, Minimum Funding, etc........................................................45
SECTION 10. EVENTS OF DEFAULT..............................................................................45
10.1. Events of Default..............................................................................45
10.2. Acceleration, etc..............................................................................46
10.3. Application of Liquidation Proceeds............................................................47
SECTION 11. THE ADMINISTRATIVE AGENT.......................................................................47
11.1. Appointment....................................................................................47
11.2. Delegation of Duties...........................................................................48
11.3. Exculpatory Provisions.........................................................................48
11.4. Reliance by Administrative Agent...............................................................48
11.5. Notice of Default..............................................................................48
11.6. Non-Reliance...................................................................................48
11.7. Indemnification................................................................................49
11.8. The Administrative Agent in Individual Capacity................................................49
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
11.9. Successor Administrative Agent.................................................................49
11.10. Other Agents...................................................................................49
SECTION 12. MISCELLANEOUS..................................................................................50
12.1. Payment of Expenses etc........................................................................50
12.2. Right of Setoff................................................................................51
12.3. Notices........................................................................................51
12.4. Benefit of Agreement...........................................................................51
12.5. No Waiver: Remedies Cumulative.................................................................53
12.6. Payments Pro Rata..............................................................................54
12.7. Calculations: Computations.....................................................................54
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.........................54
12.9. Counterparts...................................................................................55
12.10. Effectiveness..................................................................................55
12.11. Headings Descriptive...........................................................................55
12.12. Amendment or Waiver............................................................................55
12.13. Survival of Indemnities........................................................................55
12.14. Domicile of Loans..............................................................................55
12.15. Confidentiality................................................................................56
12.16. Lender Register................................................................................56
12.17. No Duty........................................................................................56
12.18. Lenders and Agent Not Fiduciary to Borrower, etc...............................................56
12.19. Survival of Representations and Warranties.....................................................57
</TABLE>
iii
<PAGE> 5
ANNEX I - INFORMATION AS TO LENDERS
ANNEX II - INFORMATION AS TO SUBSIDIARIES
ANNEX III - DESCRIPTION OF EXISTING INDEBTEDNESS
ANNEX IV - DESCRIPTION OF EXISTING LIENS
EXHIBIT A-1 - FORM OF GENERAL REVOLVING NOTE
EXHIBIT A-2 - FORM OF SWING LINE REVOLVING NOTE
EXHIBIT A-3 - FORM OF COMPETITIVE BID NOTE
EXHIBIT B-1 - FORM OF NOTICE OF REVOLVING BORROWING
EXHIBIT B-2 - FORM OF NOTICE OF COMPETITIVE BID BORROWING
EXHIBIT B-3 - FORM OF NOTICE OF CONVERSION
EXHIBIT C - FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
EXHIBIT D - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT E - FORM OF DESIGNATION AGREEMENT
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<PAGE> 6
CREDIT AGREEMENT, dated as of December 15, 1997, among the following:
(i) THE STANDARD REGISTER COMPANY, an Ohio corporation
(herein, together with its successors and assigns, the "BORROWER");
(ii) the lending institutions listed in Annex I hereto (each
of which is a "LENDER"); and
(iii) KEYBANK NATIONAL ASSOCIATION, a national banking
association, as administrative agent (the "ADMINISTRATIVE AGENT"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 1 are used herein as so defined.
(2) The Borrower has applied to the Lenders for credit facilities in
order to finance acquisitions and to provide working capital and funds for other
lawful purposes.
(3) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the credit facilities
provided for herein.
(4) At the Effective Date, KeyBank is the only Lender hereunder. It is
contemplated that, on or prior to the Syndication Date, KeyBank will syndicate
portions of its General Revolving Loans and General Revolving Commitment to new
Lenders who will become parties hereto in accordance with section 12.4(b).
NOW, THEREFORE, it is agreed:
SECTION 1. DEFINITIONS AND TERMS.
1.1. CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"AFFILIATE" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 20% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any of its Subsidiaries.
"AGREEMENT" shall mean this Credit Agreement, as the same may be from
time to time further modified, amended and/or supplemented.
"APPLICABLE EURODOLLAR MARGIN" shall have the meaning provided in
section 2.8(g).
<PAGE> 7
"APPLICABLE FACILITY FEE RATE" shall have the meaning provided in
section 4.1(a).
"APPLICABLE LENDING OFFICE" shall mean, with respect to each Lender,
(i) such Lender's Domestic Lending Office in the case of Revolving Borrowings
consisting of Prime Rate Loans (or, in the case of any Revolving Borrowings of
Swing Line Revolving Loans consisting of Money Market Rate Loans), (ii) such
Lender's Eurodollar Lending Office in the case of Revolving Borrowings
consisting of Eurodollar Loans, and (iii) the office of such Lender notified by
such Lender to the Administrative Agent as its Applicable Lending Office with
respect to any particular Competitive Bid Loan made by it.
"ASSIGNMENT AGREEMENT" shall mean an Assignment Agreement substantially
in the form of Exhibit D hereto.
"AUTHORIZED OFFICER" shall mean any officer or employee of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.
"BANKRUPTCY CODE" shall have the meaning provided in section 10.1(g).
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"BORROWING" shall mean a Revolving Borrowing or a Competitive Bid
Borrowing, as applicable.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city in which the Payment Office is located a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) and which is also a day for trading by
and between banks in U.S. dollar deposits in the interbank Eurodollar market.
"CAPITAL LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
"CASH EQUIVALENTS AND OTHER SHORT TERM INVESTMENTS" shall mean any of
the following:
(i) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the
United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition;
(ii) U.S. dollar denominated time deposits, certificates of
deposit and bankers' acceptances of (x) any Lender or (y) any bank
whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank, an "APPROVED BANK"), in each case
with maturities of not more than one year from the date of acquisition;
(iii) commercial paper issued by any Lender or Approved Bank
or by the parent company of any Lender or Approved Bank and commercial
paper issued by, or guaranteed by, any industrial or financial company
with a short- term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case
maturing within 270 days after the date of acquisition;
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<PAGE> 8
(iv) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in
clauses (i) through (iii) above;
(v) investments in money market funds access to which is
provided as part of "sweep" accounts maintained with a Lender or an
Approved Bank;
(vi) investments in highly liquid municipal and other debt
securities, "money market" preferred stocks, and similar securities, in
each case having (A) a rating at the time of acquisition of at least AA
by S&P (or the equivalent by any other rating organization); and (B)
maturities of not more than one year from the date of acquisition, or
which may, at the option of the holder be subject to mandatory
redemption or mandatory purchase by a remarketing agent at intervals
not exceeding six months in length; and
(vii) investments in money market or similar funds
substantially all the assets of which are comprised of securities of
the types described in the preceding clause (vi).
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 ET SEQ.
"CHANGE OF CONTROL" shall mean and include any of the following:
(i) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the
Borrower's Board of Directors (together with any new directors whose
election by the Borrower's Board of Directors or whose nomination for
election by the Borrower's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office;
(ii) any person or group (as such term is defined in section
13(d)(3) of the 1934 Act), other than the Borrower, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Borrower, and the Current Holder Group, shall acquire, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3 and
13d-5 of the 1934 Act) of more than 50%, on a fully diluted basis, of
the economic or voting interest in the Borrower's capital stock;
(iii) the shareholders of the Borrower approve a merger or
consolidation of the Borrower with any other person, other than a
merger or consolidation which would result in the voting securities of
the Borrower outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted or
exchanged for voting securities of the surviving or resulting entity or
its parent corporation) more than 60% of the combined voting power of
the voting securities of the Borrower or such surviving or resulting
entity (or parent corporation) outstanding after such merger or
consolidation;
(iv) the shareholders of the Borrower approve a plan of
complete liquidation of the Borrower or an agreement or agreements for
the sale or disposition by the Borrower and/or any of its Subsidiaries
of all or substantially all of the assets of the Borrower and its
Subsidiaries considered as an entirety; and/or
(v) any "Change of Control" or similar term as defined in any
other agreement or instrument evidencing or governing Indebtedness of
the Borrower or any Subsidiary with an aggregate original principal
amount of at least $50,000,000.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
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<PAGE> 9
"COMMITMENT" shall mean with respect to each Lender its General
Revolving Commitment or its Swing Line Revolving Commitment, as the case may be.
"COMPETITIVE BID BORROWING" shall mean a borrowing consisting of one or
more Competitive Bid Loans made pursuant to section 2.4.
"COMPETITIVE BID LOAN" shall mean a loan denominated in U.S. Dollars
made pursuant to section 2.4.
"COMPETITIVE BID NOTE" shall have the meaning provided in section
2.6(a).
"COMPETITIVE BID REDUCTION" shall have the meaning provided in section
2.1.
"CONSOLIDATED DEBT" shall mean (i) the sum, without duplication, on a
consolidated basis, of the principal amount (or the Capitalized Lease
Obligations, in the case of any Capital Lease) of all Indebtedness of the
Borrower and its Subsidiaries which would appear as a liability on a
consolidated balance sheet of the Borrower and its Subsidiaries prepared in
accordance with GAAP; PLUS (ii) without duplication of any amounts included
pursuant to the preceding clause (i), the sum, without duplication, on a
consolidated basis, of all Guaranty Obligations of the Borrower and its
Subsidiaries of Indebtedness of any other person which would appear as a
liability on a balance sheet of such other person prepared in accordance with
GAAP.
"CONSOLIDATED EBIT" shall mean, for any period, Consolidated Net Income
for such period; PLUS (A) the sum of the amounts for such period included in
determining such Consolidated Net Income of (i) Consolidated Interest Expense,
(ii) Consolidated Income Tax Expense, (iii) amortization or write-off of
deferred financing costs, and (iv) extraordinary non-cash losses and charges and
other non-recurring non-cash losses and charges; LESS (B) gains on sales of
assets (excluding sales in the ordinary course of business) and other
extraordinary gains and non-recurring non-cash gains; all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" shall mean, for any period, all
provisions for taxes based on the net income of the Borrower or any of its
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, total
interest expense (including that which is capitalized and that which is
attributable to Capital Leases, in accordance with GAAP) of the Borrower and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries including, without limitation,
net costs under Hedge Agreements, but excluding, however, any amortization of
deferred financing costs, all as determined in accordance with GAAP.
"CONSOLIDATED NET DEBT" shall mean as of any date of determination (i)
Consolidated Debt as of such date, LESS (ii) the sum of unrestricted cash and
Cash Equivalents and Other Short Term Investments which would appear on a
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
of such date which is prepared in accordance with GAAP.
"CONSOLIDATED NET INCOME" shall mean for any period, the net income (or
loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
PROVIDED that there shall be excluded therefrom the income (or loss) of any
entity accrued prior to the date it becomes a Subsidiary of the Borrower or is
merged into or consolidated with the Borrower or any of its Subsidiaries or on
which its assets are acquired by the Borrower or any of its Subsidiaries.
"CONSOLIDATED NET WORTH" shall mean at any time for the determination
thereof all amounts which, in conformity with GAAP, would be included under the
caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrower as at such date, PROVIDED that in no event shall
Consolidated Net Worth include any amounts in respect of preferred stock which
is subject to mandatory redemption, in whole or in part,
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<PAGE> 10
pursuant to a sinking fund, scheduled redemption or similar provisions, at any
time prior to the General Revolving Maturity Date.
"CONSOLIDATED TOTAL CAPITAL" shall mean the sum of Consolidated Debt
and Consolidated Net Worth.
"CREDIT DOCUMENTS" shall mean this Agreement and the Notes.
"CURRENT HOLDER GROUP" shall mean (i) Paul H. Granzow, James L. Sherman
and Charles F. Sherman, as trustees under the Last Will and Testament of John Q.
Sherman, deceased, and any successor trustees; (ii) The Fifth Third Bank, as
trustee under the Last Will and Testament of William C. Sherman, deceased, and
any successor trustee or trustees; (iii) the trustees under the Agreement with
William C. Sherman dated December 29, 1939, as amended, and any successor
trustee or trustees; (iv) those persons who are officers and/or directors of the
Borrower at the Effective Date; (v) the spouses, heirs, legatees, descendants
and blood relatives to the third degree of consanguinity of any person referred
to in the preceding clause (iv); (vi) the executors and administrators of the
estate of any person referred to in the preceding clauses (iv) and (v), and any
court appointed guardian of any such person; and (vii) any trust for the benefit
of any of the persons referred to in the preceding clauses (iv) and (v) and any
other persons, so long as one or more of the persons referred to in the
preceding clauses (iv) and (v) has the exclusive right (either acting alone or
with the concurrence of any other person) to control the voting and disposition
of securities held by such trust.
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" shall mean any Lender with, respect to which a
Lender Default is in effect.
"DESIGNATED BIDDER" shall mean (i) an Eligible Transferee or (ii) a
special purpose corporation which is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and that
issues (or the parent of which issues) commercial paper rated at least Prime-1
(or the then equivalent grade) by Moody's or A-1 (or the then equivalent grade)
by S&P, that, in either case, (A) is organized under the laws of the United
States or any State thereof, (B) shall have become a party hereto pursuant to
section 12.4(c) through (e), and (C) is not otherwise a Lender.
"DESIGNATION AGREEMENT" shall mean a designation agreement entered into
by a Lender (other than a Designated Bidder) and a Designated Bidder, and
accepted by the Administrative Agent, in substantially the form of Exhibit E
hereto.
"DOLLARS", "U.S. DOLLARS", "DOLLARS" and the sign "$" each means lawful
money of the United States.
"DOMESTIC LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Office in Annex I or in
the Assignment Agreement pursuant to which it became a Lender, or such other
office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"EFFECTIVE DATE" shall have the meaning provided in section 12.10.
"ELIGIBLE TRANSFEREE" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which:
(i) is not disapproved in writing by the Borrower in a notice
given to a requesting Lender and the Administrative Agent, specifying
the reasons for such disapproval, within five Business Days following
the giving of notice to the Borrower of the identity of any proposed
transferee (any such disapproval by the Borrower must be reasonable),
PROVIDED that the Borrower shall not be entitled to exercise the
foregoing right of disapproval if and so long as any Event of Default
shall have occurred and be continuing, and, PROVIDED, FURTHER, that for
purposes of transfers by KeyBank on or prior to the Syndication Date,
those
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<PAGE> 11
financial institutions which KeyBank has identified to the Borrower
prior to the Effective Date as potential Lenders hereunder and which
the Borrower indicated at such time were acceptable to it, shall be
considered Eligible Transferees; and
(ii) is not a direct competitor of the Borrower or engaged in
the same or similar business as the Borrower, or any of its respective
Subsidiaries or is not an Affiliate of any such competitors of the
Borrower or any of its respective Subsidiaries.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "CLAIMS"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. Section 2601 ET SEQ.; the Clean Air Act, 42 U.S.C. Section 7401 ET SEQ.;
the Safe Drinking Water Act, 42 U.S.C. Section 3803 ET SEQ.; the Oil Pollution
Act of 1990, 33 U.S.C. Section 2701 ET SEQ.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 ET SEQ., the
Hazardous Material Transportation Act, 49 U.S.C. Section 1801 ET SEQ. and the
Occupational Safety and Health Act, 29 U.S.C. Section 651 ET SEQ. (to the extent
it regulates occupational exposure to Hazardous Materials); and any state and
local or foreign counterparts or equivalents, in each case as amended from time
to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA AFFILIATE" shall mean each person (as defined in section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of section 414(b),(c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"EURODOLLAR LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Eurodollar Lending Office in Annex I or
in the Assignment Agreement pursuant to which it became a Lender, or such other
office or offices for Eurodollar Loans of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"EURODOLLAR LOANS" shall mean each Loan bearing interest at the rates
provided in section 2.8(a)(ii) or 2.8(b)(ii).
"EURODOLLAR RATE" shall mean with respect to each Interest Period for a
Eurodollar Loan, (A) either (i) the rate per annum for deposits in Dollars of
amounts in same day funds comparable to the outstanding principal amount of the
Eurodollar Loan for which an interest rate is then being determined for a
maturity most nearly comparable to such Interest Period which appears on page
3750 of the Dow Jones Telerate Screen as of 11:00 A.M. (local time at the Notice
Office) on the date which is two Business Days prior to the commencement of such
Interest Period, or (ii) if such a rate does not appear on such page, an
interest rate per annum equal to the average (rounded upward to the
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<PAGE> 12
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in Dollars are offered to each
of the Reference Banks by prime banks in the London interbank Eurodollar market
for deposits of amounts in Dollars in same day funds comparable to the
outstanding principal amount of the Eurodollar Loan for which an interest rate
is then being determined with maturities comparable to the Interest Period to be
applicable to such Eurodollar Loan, determined as of 11:00 A.M. (London time) on
the date which is two Business Days prior to the commencement of such Interest
Period, in each case divided (and rounded upward to the nearest whole multiple
of 1/16th of 1%) by (B) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves and without benefit of
credits for proration, exceptions or offsets which may be available from time to
time) applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"EVENT OF DEFAULT" shall have the meaning provided in section 10.1.
"EXISTING INDEBTEDNESS" shall have the meaning provided in section
7.17.
"EXISTING INDEBTEDNESS AGREEMENTS" shall have the meaning provided in
section 7.17.
"FACILITY" shall mean the General Revolving Facility or the Swing Line
Revolving Facility, as applicable.
"FACILITY FEE" shall have the meaning provided in section 3.1.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"FEES" shall mean all amounts payable pursuant to, or referred to in,
section 3.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 9,
including defined terms as used therein, are subject (to the extent provided
therein) to sections 1.3 and 12.7(a).
"GENERAL REVOLVING COMMITMENT" shall mean, with respect to each Lender,
the amount, if any, set forth opposite such Lender's name in Annex I as its
"General Revolving Commitment" as the same may be reduced from time to time
pursuant to section 4.1 and/or 10 or adjusted from time to time as a result of
assignments to or from such Lender pursuant to section 12.4.
"GENERAL REVOLVING FACILITY" shall mean the credit facility evidenced
by the Total General Revolving Commitment.
"GENERAL REVOLVING FACILITY PERCENTAGE" shall mean at any time for any
Lender with a General Revolving Commitment, the percentage obtained by dividing
such Lender's General Revolving Commitment by the Total General Revolving
Commitment, PROVIDED, that if the Total General Revolving Commitment has been
terminated, the General Revolving Facility Percentage for each Lender with a
General Revolving Commitment shall be determined by dividing such Lender's
General Revolving Commitment immediately prior to such termination by the Total
General Revolving Commitment immediately prior to such termination.
"GENERAL REVOLVING LOAN" shall have the meaning provided in section
2.1(a).
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"GENERAL REVOLVING MATURITY DATE" shall mean December 31, 2002, unless
earlier terminated, or extended in accordance with section 4.3.
"GENERAL REVOLVING NOTE" shall have the meaning provided in section
2.6(a).
"GUARANTY OBLIGATIONS" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any Indebtedness
("PRIMARY INDEBTEDNESS") of any other person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such person, whether or not contingent, (a) to purchase any such
primary Indebtedness or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof, PROVIDED, HOWEVER, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
"HEDGE AGREEMENT" shall mean (i) any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates, and (ii) any currency swap agreement, forward currency purchase agreement
or similar agreement or arrangement designed to protect against fluctuations in
currency exchange rates.
"HAZARDOUS MATERIALS" shall mean (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (ii) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "restricted hazardous materials", "extremely hazardous
wastes", "restrictive hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar meaning and regulatory
effect, under any applicable Environmental Law.
"INDEBTEDNESS" of any person shall mean without duplication: (i) all
indebtedness of such person for borrowed money; (ii) all bonds, notes,
debentures and similar debt securities of such person; (iii) the deferred
purchase price of capital assets or services which in accordance with GAAP would
be shown on the liability side of the balance sheet of such person; (iv) all
Indebtedness of a second person secured by any Lien on any property owned by
such first person, whether or not such indebtedness has been assumed; (v) all
Capitalized Lease Obligations of such person; (vi) the full outstanding balance
of trade receivables, notes or other instruments sold with full or limited
recourse, other than solely for purposes of collection of delinquent accounts;
(vii) the stated value of all preferred stock which is by its terms subject, in
whole or in part, to a sinking fund, scheduled redemption or similar provisions,
at any time prior to the General Revolving Maturity Date; and (viii) all
Guaranty Obligations of such person; PROVIDED that notwithstanding any of the
above clauses neither trade payables and accrued expenses, in each case arising
in the ordinary course of business, nor obligations in respect of insurance
policies or performance or surety bonds which themselves are not guarantees of
Indebtedness (nor drafts, acceptances or similar instruments evidencing the same
nor obligations in respect of letters of credit supporting the payment of the
same), shall constitute Indebtedness.
"INITIAL BORROWING DATE" shall mean the date, on or after the Effective
Date, upon which the conditions specified in section 6.1 are satisfied.
"INTEREST COVERAGE RATIO" shall mean, for any Testing Period, the ratio
of (i) Consolidated EBIT to (ii) Consolidated Interest Expense, in each case on
a consolidated basis for the Borrower and its Subsidiaries for such Testing
Period; PROVIDED that if any Testing Period includes any period ending on or
prior to the fiscal year ending on or nearest to December 31, 1998, in which the
Borrower shall have taken restructuring or relocation charges,
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<PAGE> 14
incident to the acquisition of Uarco, the Interest Coverage Ratio shall be
computed without regard to the actual amount of such restructuring and
relocation charges up to $20,000,000 in the aggregate on a pre-tax basis.
"INTEREST PERIOD" with respect to any Eurodollar Loan shall mean the
interest period applicable thereto, as determined pursuant to section 2.9.
"KEYBANK" shall mean KeyBank National Association, a national banking
association, together with its successors and assigns.
"LEASEHOLDS" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"LENDERS" shall mean the Lenders listed on the signature pages hereof,
each person that shall become a Lender hereunder pursuant to an Assignment
Agreement accepted by the Administrative Agent pursuant to section 12.4 and,
except when used with reference to a Revolving Loan, a Commitment, a Facility or
a related term, each Designated Bidder.
"LENDER DEFAULT" shall mean (i) the refusal (which has not been
retracted) of a Lender in violation of the requirements of this Agreement to
make available its portion of any incurrence of Loans or to fund its portion of
any Swing Line Participation Amount under section 2.5(b), or (ii) a Lender
having notified the Administrative Agent and/or the Borrower that it does not
intend to comply with any such requirements, in the case of either (i) or (ii)
as a result of the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or authority.
"LENDER REGISTER" shall have the meaning provided in section 12.16.
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"LOAN" shall mean a Revolving Loan or a Competitive Bid Loan, or both,
as applicable.
"MARGIN STOCK" shall have the meaning provided in Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of, when used with reference to the Borrower or any of
its Subsidiaries, the Borrower and its Subsidiaries, taken as a whole, or when
used with reference to any other person, such person and its Subsidiaries, taken
as a whole, as the case may be.
"MATERIAL SUBSIDIARY" shall mean, at any time, with reference to any
person, any Subsidiary of such person (i) that has assets at such time
comprising 5% or more of the consolidated assets of such person and its
Subsidiaries, or (ii) whose operations in the current fiscal year are expected
to, or whose operations in the most recent fiscal year did (or would have if
such person had been a Subsidiary for such entire fiscal year), represent 5% or
more of the consolidated earnings before interest, taxes, depreciation and
amortization of such person and its Subsidiaries for such fiscal year.
"MATURITY DATE" shall mean the General Revolving Maturity Date or the
Swing Line Maturity Date, as applicable.
"MINIMUM BORROWING AMOUNT" shall mean (i) for General Revolving Loans
which are (A) Prime Rate Loans, $5,000,000, with minimum increments thereafter
of $1,000,000, or (B) Eurodollar Loans, $5,000,000, with minimum increments
thereafter of $1,000,000; and (ii) for Swing Line Revolving Loans, $2,000,000,
with minimum increments thereafter of $500,000.
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<PAGE> 15
"MONEY MARKET RATE LOAN" shall mean each Swing Line Revolving Loan
bearing interest at a rate provided in section 2.8(b)(ii).
"MOODY'S" shall mean Moody's Investors Service, Inc. and its
successors.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan, as defined in
section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of the
preceding three plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" shall mean an employee benefit plan, other
than a Multiemployer Plan, to which the Borrower or any ERISA Affiliate, and one
or more employers other than the Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which the Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"NON-DEFAULTING LENDER" shall mean each Lender other than a Defaulting
Lender.
"NOTE" shall mean a General Revolving Note, a Swing Line Revolving Note
or a Competitive Bid Note, as the case may be.
"NOTICE OF BORROWING" shall mean a Notice of Revolving Borrowing or a
Notice of Competitive Bid Borrowing, or both, as applicable.
"NOTICE OF COMPETITIVE BID BORROWING" shall have the meaning provided
in section 2.4(a)(i).
"NOTICE OF CONVERSION" shall have the meaning provided in section 2.7.
"NOTICE OFFICE" shall mean the office of the Administrative Agent at
Key Center, 127 Public Square, Cleveland, Ohio 44114, Attention: Large Corporate
Group (facsimile: (216) 689-4981), or such other office, located in a city in
the United States Eastern Time Zone, as the Administrative Agent may designate
to the Borrower from time to time.
"NOTICE OF REVOLVING BORROWING" shall have the meaning provided in
section 2.2(a).
"NOTICE OF SWING LINE REFUNDING" shall have the meaning provided in
section 2.5(a).
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by the
Borrower to the Administrative Agent or any Lender pursuant to the terms of this
Agreement or any other Credit Document.
"PAYMENT OFFICE" shall mean the office of the Administrative Agent at
Key Center, 127 Public Square, Cleveland, Ohio 44114, Attention: Loree Kuttler
of the Large Corporate Group (telephone: (216) 689-0206; facsimile: (216) 689-
4981), or such other office, located in a city in the United States Eastern Time
Zone, as the Administrative Agent may designate to the Borrower from time to
time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"PERMITTED LIENS" shall mean Liens described in section 9.3.
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"PERSON" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"PLAN" shall mean any multiemployer or single-employer plan as defined
in section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute by) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"PRIME RATE" shall mean, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greater of (i) the rate of interest established by the
Administrative Agent at its principal office, from time to time, as its prime
rate, whether or not publicly announced, which interest rate may or may not be
the lowest rate charged by it for commercial loans or other extensions of
credit; and (ii) the Federal Funds Effective Rate in effect from time to time
PLUS 1/2 of 1% per annum.
"PRIME RATE LOAN" shall mean each Loan bearing interest at the rate
provided in section 2.8(a)(i) or 2.8(b)(i), as applicable.
"PROHIBITED TRANSACTION" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"QUOTED RATE" shall have the meaning provided in section 2.2(c).
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. Section 6901 ET SEQ.
"REAL PROPERTY" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"REFERENCE BANKS" shall mean (i) KeyBank, and (ii) any other Lender or
Lenders selected as a Reference Bank by the Administrative Agent and the
Required Lenders, PROVIDED, that if any of such Reference Banks is no longer a
Lender, such other Lender or Lenders as may be selected by the Administrative
Agent acting on instructions from the Required Lenders.
"REVOLVING BORROWING" shall mean the incurrence of General Revolving
Loans or Swing Line Revolving Loans, as the case may be, consisting of one Type
of Loan, by the Borrower from all of the Lenders having Commitments in respect
thereof on a PRO RATA basis on a given date (or resulting from conversions of
General Revolving Loans on a given date), having in the case of Eurodollar Loans
the same Interest Period, and having in the case of any Money Market Rate Loans
the same Quoted Rate and maturity.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"REGULATION U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"REPORTABLE EVENT" shall mean an event described in section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation section 2615.
"REQUIRED LENDERS" shall mean Non-Defaulting Lenders whose outstanding
General Revolving Loans and Unutilized General Revolving Commitments constitute
at least 51% of the sum of the total outstanding General Revolving Loans and
Unutilized General Revolving Commitments of Non-Defaulting Lenders (PROVIDED
that, for
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purposes hereof, neither the Borrower, nor any of its Affiliates, shall be
included in (i) the Lenders holding such amount of the General Revolving Loans
or having such amount of the Unutilized General Revolving Commitments, or (ii)
determining the aggregate unpaid principal amount of the General Revolving Loans
or Unutilized General Revolving Commitments).
"REVOLVING LOAN" shall have the meaning provided in section 2.1 and
shall include any General Revolving Loan or Swing Line Revolving Loan, as the
case may be.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC REGULATION D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"STANDARD PERMITTED LIENS" shall mean any of the following:
(i) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP;
(ii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and mechanic's Liens, carrier's Liens, and other Liens to
secure the performance of tenders, statutory obligations, contract
bids, government contracts, performance and return-of-money bonds and
other similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money), whether pursuant to statutory requirements, common law or
consensual arrangements; PROVIDED such Liens do not in the aggregate
materially detract from the value of the property or assets subject
thereto or materially impair the use thereof in the operation of the
business of the Borrower or any Subsidiary;
(iii) Liens, if any, created by this Agreement or the other
Credit Documents;
(iv) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
10.1(g);
(v) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement;
(vi) Liens arising from financing statements regarding
property subject to leases not in violation of the requirements of this
Agreement, PROVIDED that such Liens are only in respect of the property
subject to, and secure only, the respective lease (and any other lease
with the same or an affiliated lessor); and
(vii) easements, rights-of-way, zoning or deed restrictions,
minor encroachments, defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect
with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries considered as an entirety.
"SUBSIDIARY" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries; (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time; and (iii) any
other person whose assets, liabilities and operations are required under GAAP to
be consolidated with those of such person for
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financial reporting purposes. Unless otherwise expressly provided, all
references herein to "Subsidiary" shall mean a Subsidiary of the Borrower.
"SWING LINE LENDER" shall mean KeyBank and any single financial
institution that shall become a Lender hereunder holding all of the Swing Line
Revolving Loans and the entire Total Swing Line Revolving Commitment, pursuant
to an Assignment Agreement accepted by the Administrative Agent pursuant to
section 12.4.
"SWING LINE MATURITY DATE" shall mean December 31, 2002, unless earlier
terminated, or extended in accordance with section 4.3.
"SWING LINE PARTICIPATION AMOUNT" shall have the meaning provided in
section 2.5(b).
"SWING LINE REVOLVING COMMITMENT" shall mean, with respect to the Swing
Line Lender, the amount set forth opposite such Lender's name in Annex I as its
"Swing Line Revolving Commitment" as the same may be reduced from time to time
pursuant to section 4.1 and/or 10 or adjusted from time to time as a result of
assignments from such Lender pursuant to section 12.4.
"SWING LINE REVOLVING FACILITY" shall mean the credit facility
evidenced by the Total Swing Line Revolving Commitment.
"SWING LINE REVOLVING LOAN" shall have the meaning provided in section
2.1(b).
"SWING LINE REVOLVING NOTE" shall have the meaning provided in section
2.6(a).
"SYNDICATION DATE" shall mean the earlier of (i) the date which is 90
days after the Initial Borrowing Date, and (ii) the date upon which the
Administrative Agent determines in its sole discretion (and notifies the
Borrower) that the primary syndication by the initial Lender or Lenders named
herein of portions of their General Revolving Commitments to new Lenders has
been completed.
"TESTING PERIOD" shall mean for any determination a single period
consisting of the four consecutive fiscal quarters of the Borrower then last
ended (whether or not such quarters are all within the same fiscal year).
"TOTAL COMMITMENT" shall mean the sum of the Commitments of the
Lenders.
"TOTAL GENERAL REVOLVING COMMITMENT" shall mean the sum of the General
Revolving Commitments of the Lenders.
"TYPE" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., a Prime Rate Loan, Eurodollar Loan or
Money Market Rate Loan.
"UARCO ACQUISITION" shall mean the acquisition of Settsu Holding Corp.,
a Delaware corporation, and its Subsidiaries, including Uarco Incorporated,
pursuant to the Uarco Acquisition Documents.
"UARCO ACQUISITION DOCUMENTS" shall mean the Stock Purchase Agreement,
dated as of November 26, 1997, between the Borrower, as buyer, and Settsu
Corporation, a Japanese corporation, as seller, all ancillary agreements between
or among any of such parties related thereto, including, without limitation, any
amendments and "side letters", and the "disclosure schedule" or similar document
furnished to the Borrower pursuant to such Stock Purchase Agreement.
"UCC" shall mean the Uniform Commercial Code.
"UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards
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No. 87, based upon the actuarial assumptions used by the Plan's actuary in the
most recent annual valuation of the Plan.
"UNITED STATES" and "U.S." each means United States of America.
"UNUTILIZED GENERAL REVOLVING COMMITMENT" for any Lender at any time
shall mean the excess of (i) such Lender's General Revolving Commitment at such
time over (ii) the aggregate principal amount of General Revolving Loans made by
such Lender and outstanding at such time.
"UNUTILIZED SWING LINE REVOLVING COMMITMENT" for the Swing Line Lender
at any time shall mean the excess of (i) the Lender's Swing Line Revolving
Commitment at such time over (ii) the aggregate principal amount of Swing Line
Revolving Loans made by such Lender and outstanding at such time.
"UNUTILIZED TOTAL GENERAL REVOLVING COMMITMENT" shall mean, at any
time, the excess of (i) the Total General Revolving Commitment at such time over
(ii) the aggregate principal amount of all General Revolving Loans then
outstanding.
"WHOLLY-OWNED SUBSIDIARY" shall mean each Subsidiary of the Borrower at
least 95% of whose capital stock, equity interests and partnership interests,
other than director's qualifying shares or similar interests, are owned directly
or indirectly by the Borrower.
"WRITTEN", "WRITTEN" or "IN WRITING" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
1.2. COMPUTATION OF TIME PERIODS. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
1.3. ACCOUNTING TERMS. Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; PROVIDED that, if the
Company notifies the Administrative Agent that the Company requests an amendment
to any provision of section 8 or 9 hereof to eliminate the effect of any change
occurring after the Effective Date in GAAP or in the application thereof to such
provision (or if the Administrative Agent notifies the Company that the Required
Lenders request an amendment to any such provision hereof for such purposes),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance with the requirements of this Agreement.
1.4. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to sections, Annexes
and Exhibits shall be construed to refer to sections of, and Annexes and
Exhibits to, this Agreement, and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all real
property, tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and interests in any of the foregoing.
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SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1. COMMITMENTS FOR REVOLVING LOANS. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a "REVOLVING LOAN" and, collectively, the "REVOLVING LOANS") to the
Borrower, which Revolving Loans shall be drawn, to the extent such Lender has a
Commitment under a Facility for the Borrower, under the applicable Facility, as
set forth below:
(a) GENERAL REVOLVING FACILITY. Revolving Loans to the
Borrower under the General Revolving Facility (each a "GENERAL
REVOLVING LOAN" and, collectively, the "GENERAL REVOLVING LOANS") (i)
may be made at any time and from time to time on and after the Initial
Borrowing Date and prior to the General Revolving Maturity Date; (ii)
shall be made only in U.S. Dollars; (iii) except as otherwise provided,
may, at the option of the Borrower, be incurred and maintained as, or
converted into, General Revolving Loans which are either Prime Rate
Loans or Eurodollar Loans, PROVIDED that all General Revolving Loans
made as part of the same Borrowing shall, unless otherwise specifically
provided herein, consist of General Revolving Loans of the same Type;
(iv) may be repaid or prepaid and reborrowed in accordance with the
provisions hereof; (v) may only be made if after giving effect thereto
the Unutilized Total General Revolving Commitment exceeds the
outstanding Swing Line Revolving Loans; and (vi) shall not exceed for
any Lender at any time outstanding the General Revolving Commitment of
such Lender at such time.
(b) SWING LINE REVOLVING FACILITY. Revolving Loans to the
Borrower under the Swing Line Revolving Facility (each a "SWING LINE
REVOLVING LOAN" and, collectively, the "SWING LINE REVOLVING LOANS")
(i) may be made at any time and from time to time on and after the
Initial Borrowing Date and prior to the Swing Line Maturity Date; (ii)
shall only be made by the Swing Line Lender; (iii) shall be made only
in U.S. Dollars; (iv) shall have a maturity of 30 days or less; (v)
except as otherwise provided, may, at the option of the Borrower, be
incurred as Swing Line Revolving Loans which are either Prime Rate
Loans or Money Market Rate Loans, PROVIDED that all Swing Line
Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, consist of Swing Line Revolving
Loans of the same Type; (vi) may be repaid or prepaid and reborrowed in
accordance with the provisions hereof; (vii) may only be made if after
giving effect thereto the Unutilized Total General Revolving Commitment
exceeds the outstanding Swing Line Revolving Loans; and (viii) shall
not exceed for the Swing Line Lender at any time outstanding such
Lender's Swing Line Revolving Commitment at such time.
Except as otherwise specifically provided in this Agreement, the Total General
Revolving Commitment shall be deemed used (and correspondently, the Unutilized
Total General Revolving Commitment shall be deemed reduced) from time to time to
the extent of the aggregate amount of the Competitive Bid Loans then
outstanding, and such deemed usage of the Total General Revolving Commitment
(and such deemed reduction in the Unutilized Total General Revolving Commitment)
shall be applied to the Lenders having General Revolving Commitments ratably
according to their respective General Revolving Facility Percentages (such
deemed usage of the Total General Revolving Commitment and such deemed reduction
in the Unutilized Total General Revolving Commitment, each being a "COMPETITIVE
BID REDUCTION").
2.2. PROCEDURES FOR REVOLVING BORROWINGS. (a) NOTICE OF REVOLVING
BORROWING. Whenever the Borrower desires to incur Revolving Loans, it shall give
the Administrative Agent at its Notice Office,
(A) BORROWINGS UNDER THE GENERAL REVOLVING FACILITY OF
EURODOLLAR LOANS: in the case of any Borrowing under the Short Term
Revolving Facility or the General Revolving Facility of Eurodollar
Loans to be made hereunder, prior to 11:00 A.M. (local time at its
Notice Office), at least three Business Days' prior written or
telephonic notice thereof (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Administrative Agent),
(B) BORROWINGS UNDER ANY FACILITY OF PRIME RATE LOANS: in the
case of any Borrowing under any Facility of Prime Rate Loans to be made
hereunder, prior to 11:00 A.M. (local time at its Notice Office) on the
proposed date thereof written or telephonic notice thereof (in the case
of telephonic notice, promptly confirmed in writing if so requested by
the Administrative Agent), or
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(C) BORROWINGS UNDER THE SWING LINE REVOLVING FACILITY OF
MONEY MARKET RATE LOANS: in the case of any Borrowing under the Swing
Line Revolving Facility of Money Market Rate Loans to be made
hereunder, if the Administrative Agent shall have furnished the
Borrower with a Quoted Rate therefor, prior to 11:00 A.M. (local time
at its Notice Office) on the proposed date thereof (which shall be
within such period as the Administrative Agent shall have specified for
such Quoted Rate) written or telephonic notice thereof (in the case of
telephonic notice, promptly confirmed in writing if so requested by the
Administrative Agent).
Each such notice (each such notice, a "NOTICE OF REVOLVING BORROWING") shall (if
requested by the Administrative Agent to be confirmed in writing), be
substantially in the form of Exhibit B-1, and in any event shall be irrevocable
and shall specify: (i) the Facility under which the Borrowing is to be incurred;
(ii) the aggregate principal amount of the Loans to be made pursuant to such
Borrowing; (iii) the date of the Borrowing (which shall be a Business Day); (iv)
whether the Borrowing shall consist of Prime Rate Loans, Eurodollar Loans or
Money Market Rate Loans; (v) if the Borrowing consists of Swing Line Revolving
Loans, the maturity date thereof (which shall not be more than 30 days), and if
such Swing Line Revolving Loans are Money Market Rate Loans, the Quoted Rate
therefor; and (vi) if the requested Borrowing consists of Eurodollar Loans, the
Interest Period to be initially applicable thereto. If the Borrower fails to
specify in a Notice of Borrowing the maturity date of any Swing Line Revolving
Loans, such maturity date shall be deemed to be 30 days. The Administrative
Agent shall promptly give each Lender which has a Commitment under any
applicable Facility written notice (or telephonic notice promptly confirmed in
writing) of each proposed Borrowing under the applicable Facility, of such
Lender's proportionate share thereof and of the other matters covered by the
Notice of Borrowing relating thereto.
(b) BORROWINGS OF MONEY MARKET RATE LOANS. Whenever the Borrower
proposes to submit a Notice of Borrowing with respect to Swing Line Revolving
Loans which will be Money Market Rate Loans, it will prior to submitting such
Notice of Borrowing notify the Administrative Agent of its intention and request
the Administrative Agent to quote a fixed or floating interest rate (the "QUOTED
RATE") to be applicable thereto prior to the proposed maturity thereof. The
Administrative Agent will immediately so notify the Swing Line Lender, and if
the Swing Line Lender is agreeable to a particular interest rate for the
proposed maturity of such Money Market Rate Loans if such Loans are made on or
prior to a specified date, the Administrative Agent shall quote such interest
rate to the Borrower as the Quoted Rate applicable to such proposed Money Market
Rate Loans if made on or before such specified date for a maturity as so
proposed by the Borrower. The Swing Line Lender contemplates that any Quoted
Rate will be a rate of interest which reflects a margin corresponding to (or
greater than) the sum of (x) the Applicable Eurodollar Margin in effect at the
time of quotation of any Quoted Rate, PLUS (y) the Applicable Facility Fee Rate
in effect at such time, over the then prevailing Federal Funds Effective Rate,
commercial paper, call money, overnite repurchase or other commonly quoted
interest rate, in each case as selected by the Swing Line Lender. Nothing herein
shall be deemed to permit any Lender other than the Swing Line Lender any right
of approval with respect to a Quoted Rate.
(c) ACTIONS BY ADMINISTRATIVE AGENT ON TELEPHONE NOTICE. Without in any
way limiting the obligation of the Borrower to confirm in writing any telephonic
notice permitted to be given hereunder, the Administrative Agent may act prior
to receipt of written confirmation without liability upon the basis of such
telephonic notice believed by the Administrative Agent in good faith to be from
an Authorized Officer of the Borrower entitled to give telephonic notices under
this Agreement on behalf of the Borrower. In each such case, the Administrative
Agent's record of the terms of such telephonic notice shall be conclusive absent
manifest error.
(d) MINIMUM REVOLVING BORROWING AMOUNTS. The aggregate principal amount
of each Borrowing by the Borrower under a Facility shall not be less than the
Minimum Borrowing Amount. More than one Borrowing may be incurred by the
Borrower on any day under the same or a different Facility, PROVIDED that (i) if
there are two or more Borrowings on a single day under the same Facility which
consist of Eurodollar Loans, each such Borrowing shall have a different initial
Interest Period, and (ii) at no time shall there be more than 20 Borrowings
outstanding under the General Revolving Facility which are Eurodollar Loans.
(e) DISBURSEMENT OF FUNDS FROM REVOLVING BORROWINGS. No later than 2:00
P.M. (local time at the Payment Office) on the date specified in each Notice of
Revolving Borrowing, each Lender with a Commitment under the Facility under
which any Borrowing pursuant to such Notice of Revolving Borrowing is to be made
will make
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available its PRO RATA share, if any, of each Borrowing under such Facility
requested to be made on such date in the manner provided below. All amounts
shall be made available to the Administrative Agent in U.S. dollars and
immediately available funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with section 2.8, for the respective Loans
(but without any requirement to pay any amounts in respect thereof pursuant to
section 2.11).
(f) RESPONSIBILITY FOR LENDER DEFAULT. It is understood that no Lender
shall be responsible for any default by any other Lender in its obligation to
make Revolving Loans hereunder and that each Lender shall be obligated to make
the Revolving Loans provided to be made by it hereunder, regardless of the
failure of any other Lender to fulfill its Commitment hereunder. Nothing in this
section 2.2, and no subsequent termination of the Commitments pursuant to
section 4.1, shall be deemed to relieve any Lender from its obligation to
fulfill prior to such termination its Commitment or Commitments hereunder and in
existence from time to time prior to such termination. Nothing in this section
2.2, or any subsequent termination of the Commitments pursuant to section 4.1,
shall prejudice any rights which the Borrower may have against any Lender for
damages or otherwise as a result of any default by such Lender under this
Agreement.
2.3. PRO RATA REVOLVING BORROWINGS. All Borrowings under a Facility
shall be made by the Lenders having Commitments under such Facility PRO RATA on
the basis of their respective Commitments under such Facility.
2.4. COMPETITIVE BID LOANS. (a) Each Lender severally agrees that the
Borrower may make Competitive Bid Borrowings under this section 2.4 from time to
time on any Business Day during the period from the Initial Borrowing Date until
the date occurring 30 days prior to the General Revolving Maturity Date in the
manner set forth below; PROVIDED that notwithstanding anything to the contrary
contained herein, following the making of each Competitive Bid Borrowing, the
sum of the aggregate outstanding General Revolving Loans, the aggregate
outstanding Swing Line Revolving Loans and the aggregate outstanding Competitive
Bid Loans shall not exceed the Total General Revolving Commitment (computed
without regard to any Competitive Bid Reduction).
(i) The Borrower may request a Competitive Bid Borrowing under
this section 2.4 by delivering to the Administrative Agent, by
telecopier, telex or cable, confirmed immediately in writing, a notice
of a Competitive Bid Borrowing (a "NOTICE OF COMPETITIVE BID
BORROWING"), in substantially the form of Exhibit B-2 hereto,
specifying the date and aggregate amount of the proposed Competitive
Bid Borrowing, the maturity date for repayment of each Competitive Bid
Loan to be made as part of such Competitive Bid Borrowing (which
maturity date may not be earlier than the date occurring 30 days after
the date of such Competitive Bid Borrowing or later than the General
Revolving Maturity Date), the interest payment date or dates relating
thereto, and any other terms to be applicable to such Competitive Bid
Borrowing, not later than 10:00 A.M. (local time at the Notice Office)
(A) at least one Business Day prior to the date of the proposed
Competitive Bid Borrowing, if the Borrower shall specify in the Notice
of Competitive Bid Borrowing that the rates of interest to be offered
by the Lenders shall be fixed rates per annum and (B) at least four
Business Days prior to the date of the proposed Competitive Bid
Borrowing, if the Borrower shall
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instead specify in the Notice of Competitive Bid Borrowing a different
basis to be used by the Lenders in determining the rates of interest to
be offered by them. Competitive Bid Loans shall only be made in U.S.
Dollars. If the Borrower and the Administrative Agent shall have so
agreed, the Borrower shall pay to the Administrative Agent, for its own
account, in connection with each request for a Competitive Bid
Borrowing, promptly after receipt of an invoice therefor, a competitive
bid administrative fee in such amount as has been so agreed. The
Administrative Agent shall in turn promptly notify each Lender of each
request for a Competitive Bid Borrowing received by it from the
Borrower by sending such Lender a copy of the related Notice of
Competitive Bid Borrowing.
(ii) Each Lender may, if, in its sole discretion, it elects to
do so, irrevocably offer to make one or more Competitive Bid Loans to
the Borrower as part of such proposed Competitive Bid Borrowing at a
rate or rates of interest specified by such Lender in its sole
discretion, by notifying the Administrative Agent (which shall give
prompt notice thereof to the Borrower), before 10:00 A.M. (local time
at the Notice Office) (A) on the date of such proposed Competitive Bid
Borrowing, in the case of a Notice of Competitive Bid Borrowing
delivered pursuant to clause (A) of paragraph (i) above and (B) three
Business Days before the date of such proposed Competitive Bid
Borrowing, in the case of a Notice of Competitive Bid Borrowing
delivered pursuant to clause (B) of paragraph (i) above, of the minimum
amount and maximum amount of each Competitive Bid Loan which such
Lender would be willing to make as part of such proposed Competitive
Bid Borrowing (which amounts may, subject to the proviso to the first
sentence of this section 2.4(a), exceed such Lender's General Revolving
Commitment), the rate or rates of interest therefor (specified to the
nearest 1/10,000th of 1%) and such Lender's Applicable Lending Office
with respect to such Competitive Bid Loan; PROVIDED that if the
Administrative Agent in its capacity as a Lender shall, in its sole
discretion, elect to make any such offer, it shall notify the Borrower
of such offer before 9:00 A.M. (local time at the Notice Office) on the
date on which notice of such election is to be given to the
Administrative Agent by the other Lenders. If any Lender shall elect
not to make such an offer, such Lender shall so notify the
Administrative Agent, before 10:00 A.M. (local time at the Notice
Office) on the date on which notice of such election is to be given to
the Administrative Agent by the other Lenders, and such Lender shall
not be obligated to, and shall not, make any Competitive Bid Loan as
part of such Competitive Bid Borrowing; PROVIDED that the failure by
any Lender to give such notice shall not cause such Lender to be
obligated to make any Competitive Bid Loan as part of such proposed
Competitive Bid Borrowing. It is understood and agreed that the
Borrower may not accept any offer to make a Competitive Bid Loan if
such offer is not made on a timely basis or otherwise fails to comply
with the requirements of this Agreement.
(iii) The Borrower shall, in turn, (A) before 12:00 noon
(local time at the Notice Office) on the date of such proposed
Competitive Bid Borrowing, in the case of a Notice of Competitive Bid
Borrowing delivered pursuant to clause (A) of paragraph (i) above and
(B) before 12:00 noon (local time at the Notice Office) three Business
Days before the date of such proposed Competitive Bid Borrowing, in the
case of a Notice of Competitive Bid Borrowing delivered pursuant to
clause (B) of paragraph (i) above, either
(x) cancel such Competitive Bid Borrowing by giving
the Administrative Agent notice to that effect, or
(y) accept one or more of the offers made by any
Lender or Lenders pursuant to paragraph (ii) above, in
ascending order, from the lowest cost to the highest cost
acceptable to the Borrower in its sole discretion (subject, if
necessary, to ratable allocation between or among Lenders
offering the same interest rates), by giving notice to the
Administrative Agent of the amount of each Competitive Bid
Loan (which amount shall be equal to or greater than the
minimum amount, and equal to or less than the maximum amount,
notified to the Borrower by the Administrative Agent on behalf
of such Lender for such Competitive Bid Loan pursuant to
paragraph (ii) above) to be made by each Lender as part of
such Competitive Bid Borrowing, and reject any remaining
offers made by Lenders pursuant to paragraph (ii) above by
giving the Administrative Agent notice to that effect,
PROVIDED that the aggregate principal amount of each
Competitive Bid Borrowing may not exceed the applicable amount
requested in the relevant Notice of Competitive Bid Borrowing.
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(iv) If the Borrower notifies the Administrative Agent that
such Competitive Bid Borrowing is cancelled pursuant to paragraph
(iii)(x) above, the Administrative Agent shall give prompt notice
thereof to the Lenders and such Competitive Bid Borrowing shall not be
made.
(v) If the Borrower accepts one or more of the offers made by
any Lender or Lenders pursuant to paragraph (iii)(y) above, the
Administrative Agent shall in turn promptly notify (A) each Lender that
has made an offer as described in paragraph (ii) above, of the date and
aggregate amount of such Competitive Bid Borrowing and whether or not
any offer or offers made by such Lender pursuant to paragraph (ii)
above have been accepted by the Borrower, (B) each Lender that is to
make a Competitive Bid Loan as part of such Competitive Bid Borrowing,
of the amount of each Competitive Bid Loan to be made by such Lender as
part of such Competitive Bid Borrowing and (C) each Lender that is to
make a Competitive Bid Loan as part of such Competitive Bid Borrowing,
upon receipt, that the Administrative Agent has received forms of
documents appearing to fulfill the applicable conditions set forth in
section 6. Each Lender that is to make a Competitive Bid Loan as part
of such Competitive Bid Borrowing shall, before 12:00 noon (local time
at the Notice Office) on the date of such Competitive Bid Borrowing
specified in the notice received from the Administrative Agent pursuant
to clause (A) of the preceding sentence or any later time when such
Lender shall have received notice from the Administrative Agent
pursuant to clause (C) of the preceding sentence, make available for
the account of its Applicable Lending Office to the Administrative
Agent at its Payment Office such Lender's portion of such Competitive
Bid Borrowing, in same day funds. Upon fulfillment of the applicable
conditions set forth in section 6 and after receipt by the
Administrative Agent of such funds, the Administrative Agent will make
such funds available to the Borrower at the Administrative Agent's
Payment's Office. Promptly after each Competitive Bid Borrowing the
Administrative Agent will notify each Lender of the amount of the
Competitive Bid Borrowing, the consequent Competitive Bid Reduction and
the dates upon which such Competitive Bid Reduction commenced and will
terminate.
(b) Each Competitive Bid Borrowing shall be in an aggregate amount not
less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof
and, following the making of each Competitive Bid Borrowing, the Borrower shall
be in compliance with the limitations set forth in the proviso to the first
sentence of section 2.4(a) above.
(c) Within the limits and on the conditions set forth in this section
2.4, the Borrower may from time to time borrow under this section 2.4, repay or
prepay pursuant to section 2.4(d) below, and reborrow under this section 2.4,
PROVIDED that a Competitive Bid Borrowing shall not be made within 10 Business
Days of the date of any other Competitive Bid Borrowing.
(d) The Borrower shall repay to the Administrative Agent for the
account of each Lender which has made a Competitive Bid Loan, or each other
holder of a Competitive Bid Note, on the maturity date of each Competitive Bid
Loan (such maturity date being that specified by the Borrower for repayment of
such Competitive Bid Loan in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above and provided in the Competitive
Bid Note evidencing such Competitive Bid Loan), the then unpaid principal amount
of such Competitive Bid Loan. The Borrower shall have no right to prepay any
principal amount of any Competitive Bid Loan unless, and then only on the terms,
specified by the Borrower for such Competitive Bid Loan in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and set
forth in the Competitive Bid Note evidencing such Competitive Bid Loan.
Competitive Bid Loans made by any Lender shall be subject to mandatory
prepayment in accordance with the provisions of section 5.2 hereof. Any such
mandatory prepayment shall be accompanied by accrued interest on the amount of
the prepayment to the date of prepayment and such breakage compensation as may
be reasonably determined by such Lender as necessary to compensate it for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund its Competitive Bid
Loans) which such Lender may sustain by reason of such mandatory prepayment.
(e) The Borrower shall pay interest on the unpaid principal amount of
each Competitive Bid Loan from the date of such Competitive Bid Loan to the date
the principal amount of such Competitive Bid Loan is repaid in full, at the rate
of interest for such Competitive Bid Loan specified by the Lender making such
Competitive Bid Loan in
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its notice with respect thereto delivered pursuant to subsection (a)(ii) above,
payable on the interest payment date or dates specified by the Borrower for such
Competitive Bid Loan in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above, as provided in the Competitive
Bid Note evidencing such Competitive Bid Loan.
(f) The indebtedness of the Borrower resulting from each Competitive
Bid Loan made to the Borrower as part of a Competitive Bid Borrowing shall be
evidenced by the Competitive Bid Note of the Borrower payable to the order of
the Lender making such Competitive Bid Loan.
2.5. REFUNDING OF, OR PARTICIPATION IN, SWING LINE REVOLVING LOANS. (a)
If any Event of Default exists, any Lender which has any Swing Line Revolving
Loans owing to it (a "SWING LINE LENDER") may, in its sole and absolute
discretion, direct that the Swing Line Revolving Loans owing to it be refunded
by delivering a notice to such effect to the Administrative Agent, specifying
the aggregate principal amount thereof (a "NOTICE OF SWING LINE REFUNDING").
Promptly upon receipt of a Notice of Swing Line Refunding, the Administrative
Agent shall give notice of the contents thereof to the Lenders with General
Revolving Commitments and, unless an Event of Default specified in section
10.1(g) in respect of the Borrower has occurred, the Borrower. Each such Notice
of Swing Line Refunding shall be deemed to constitute delivery by the Borrower
of a Notice of Borrowing requesting General Revolving Loans consisting of Prime
Rate Loans in the amount of the Swing Line Revolving Loans to which it relates.
Each Lender with a General Revolving Commitment (including the Swing Line Lender
giving the Notice of Swing Line Refunding) hereby unconditionally agrees
(notwithstanding that any of the conditions specified in section 6.2 hereof or
elsewhere in this Agreement shall not have been satisfied, but subject to the
provisions of paragraph (b) and (d) below) to make a General Revolving Loan to
the Borrower in an amount equal to such Lender's General Revolving Facility
Percentage of the aggregate amount of the Swing Line Revolving Loans to which
such Notice of Swing Line Refunding relates. Each such Lender shall make the
amount of such General Revolving Loan available to the Administrative Agent in
immediately available funds at the Payment Office not later than 2:00 P.M.
(local time at the Payment Office), if such notice is received by such Lender
prior to 11:00 A.M. (local time at its Domestic Lending Office), or not later
than 2:00 P.M. (local time at the Payment Office) on the next Business Day, if
such notice is received by such Lender after such time. The proceeds of such
General Revolving Loans shall be made immediately available to the Swing Line
Lender giving such Notice of Swing Line Refunding and applied by it to repay the
principal amount of the Swing Line Revolving Loans to which such Notice of Swing
Line Refunding related. The Borrower irrevocably and unconditionally agrees
that, notwithstanding anything to the contrary contained in this Agreement,
General Revolving Loans made as herein provided in response to a Notice of Swing
Line Refunding shall constitute General Revolving Loans hereunder consisting of
Prime Rate Loans.
(b) If prior to the time a General Revolving Loan would otherwise have
been made as provided above as a consequence of a Notice of Swing Line
Refunding, any of the events specified in section 10.1(g) shall have occurred in
respect of the Borrower or one or more of the Lenders with General Revolving
Commitments shall determine that it is legally prohibited from making a General
Revolving Loan under such circumstances, each Lender (other than the Swing Line
Lender giving the Notice of Swing Line Refunding), or each Lender (other than
such Swing Line Lender) so prohibited, as the case may be, shall, on the date
such General Revolving Loan would have been made by it (the "PURCHASE DATE"),
purchase an undivided participating interest in the outstanding Swing Line
Revolving Loans to which such Notice of Swing Line Refunding related, in an
amount (the "SWING LINE PARTICIPATION AMOUNT") equal to such Lender's General
Revolving Facility Percentage of such Swing Line Revolving Loans. On the
Purchase Date, each such Lender or each such Lender so prohibited, as the case
may be, shall pay to the Swing Line Lender, in immediately available funds, such
Lender's Swing Line Participation Amount, and promptly upon receipt thereof the
Swing Line Lender shall, if requested by such other Lender, deliver to such
Lender a participation certificate, dated the date of the Swing Line Lender's
receipt of the funds from, and evidencing such Lender's participating interest
in such Swing Line Revolving Loans and its Swing Line Participation Amount in
respect thereof. If any amount required to be paid by a Lender to the Swing Line
Lender pursuant to the above provisions in respect of any Swing Line
Participation Amount is not paid on the date such payment is due, such Lender
shall pay to the Swing Line Lender on demand interest on the amount not so paid
at the overnight Federal Funds Effective Rate from the due date until such
amount is paid in full.
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(c) Whenever, at any time after the Swing Line Lender has received from
any other Lender such Lender's Swing Line Participation Amount, the Swing Line
Lender receives any payment from or on behalf of the Borrower on account of the
related Swing Line Revolving Loans, the Swing Line Lender will promptly
distribute to such Lender its General Revolving Facility Percentage of such
payment on account of its Swing Line Participation Amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded);
PROVIDED, HOWEVER, that in the event such payment received by the Swing Line
Lender is required to be returned, such Lender will return to the Swing Line
Lender any portion thereof previously distributed to it by the Swing Line
Lender.
(d) Each Lender's obligation to make General Revolving Loans and/or to
purchase participations in connection with a Notice of Swing Line Refunding
(which shall in all events be within such Lender's Unutilized General Revolving
Commitment, taking into account all outstanding participations in connection
with Swing Line Refundings) shall be subject to the conditions that
(i) such Lender shall have received a Notice of Swing Line
Refunding complying with the provisions hereof; and
(ii) at the time the Swing Line Revolving Loans which are the
subject of such Notice of Swing Line Refunding were made, the Swing
Line Lender making the same had no actual written notice from another
Lender that an Event of Default had occurred and was continuing);
but otherwise shall be absolute and unconditional, shall be solely for the
benefit of the Swing Line Lender which gives such Notice of Swing Line
Refunding, and shall not be affected by any circumstance, including, without
limitation, (A) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against any other Lender or any other person, or the
Borrower may have against any Lender or other person, as the case may be, for
any reason whatsoever; (B) the occurrence or continuance of a Default or Event
of Default; (C) any event or circumstance involving a Material Adverse Effect
upon the Borrower; (D) any breach of any Credit Document by any party thereto;
or (E) any other circumstance, happening or event, whether or not similar to any
of the foregoing.
2.6. NOTES. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made to it by each Lender shall be evidenced (i) if
General Revolving Loans, by a promissory note substantially in the form of
Exhibit A-1 with blanks appropriately completed in conformity herewith (each a
"GENERAL REVOLVING NOTE" and, collectively, the "GENERAL REVOLVING NOTES"), (ii)
if Swing Line Revolving Loans, by a promissory note substantially in the form of
Exhibit A-2 with blanks appropriately completed in conformity herewith (each a
"SWING LINE REVOLVING NOTE" and, collectively, the "SWING LINE REVOLVING
NOTES"), and (iii) if Competitive Bid Loans, by a promissory note substantially
in the form of Exhibit A-3 with blanks appropriately completed in conformity
herewith (each a "COMPETITIVE BID NOTE" and, collectively, the "COMPETITIVE BID
NOTES").
(b) The General Revolving Note issued to a Lender with a General
Revolving Commitment shall: (i) be executed by the Borrower; (ii) be payable to
the order of such Lender and be dated on or prior to the date the first Loan
evidenced thereby is made; (iii) be in a stated principal amount equal to the
General Revolving Commitment of such Lender and be payable in the principal
amount of General Revolving Loans evidenced thereby; (iv) mature on the General
Revolving Maturity Date; (v) bear interest as provided in section 2.8 in respect
of the Prime Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby; (vi) be subject to mandatory prepayment as provided in section 5.2: and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) The Swing Line Revolving Note issued to a Lender with a Swing Line
Revolving Commitment shall: (i) be executed by the Borrower; (ii) be payable to
the order of such Lender and be dated on or prior to the date the first Loan
evidenced thereby is made; (iii) be in a stated principal amount equal to the
Swing Line Revolving Commitment of such Lender and be payable in the principal
amount of Swing Line Revolving Loans evidenced thereby; (iv) mature as to any
Swing Line Revolving Loan evidenced thereby on the maturity date, not later than
the 30th day following the date such Swing Line Revolving Loan was made,
specified in the applicable Notice of Borrowing; (v) bear interest as provided
in section 2.8 in respect of the Prime Rate Loans or Money Market Rate
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Loans, as the case may be, evidenced thereby; (vi) be subject to mandatory
prepayment as provided in section 5.2; and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(d) The Competitive Bid Note issued to a Lender which has made a
Competitive Bid Loan shall: (i) be executed by the Borrower; (ii) be payable to
the order of such Lender and be dated on or prior to the date the first
Competitive Bid Loan is made by such Lender; (iii) be payable in the principal
amount of the Competitive Bid Loans evidenced thereby; (iv) mature as to any
Competitive Bid Loan evidenced thereby on the maturity date selected therefor in
the applicable Notice of Competitive Bid Borrowing; (v) bear interest as to any
such Competitive Bid Loan at the rate and payable on the dates provided therefor
as contemplated by section 2.4(e); (vi) be subject in the case of any
Competitive Bid Loan evidenced thereby to optional or mandatory prepayment only
as contemplated by section 2.4(d); and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(e) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any Note, endorse on the reverse side thereof or the grid attached
thereto the outstanding principal amount of Loans evidenced thereby. Failure to
make any such notation or any error in any such notation shall not affect the
Borrower's obligations in respect of such Loans.
2.7. CONVERSIONS OF GENERAL REVOLVING LOANS. The Borrower shall have
the option to convert on any Business Day all or a portion at least equal to the
applicable Minimum Borrowing Amount of the outstanding principal amount of the
outstanding Loans comprising a Borrowing under the General Revolving Facility
into a Borrowing or Borrowings under the same Facility of the other Type of Loan
which can be made pursuant to such Facility, PROVIDED that: (i) no partial
conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding
principal amount of the Eurodollar Loans made pursuant to such Borrowing to less
than the Minimum Borrowing Amount applicable thereto; (ii) any conversion of
Eurodollar Loans into Prime Rate Loans shall be made on, and only on, the last
day of an Interest Period for such Eurodollar Loans; (iii) Prime Rate Loans may
only be converted into Eurodollar Loans if no Default under section 10.1(a) or
Event of Default is in existence on the date of the conversion unless the
Required Lenders otherwise agree; and (iv) Borrowings of Eurodollar Loans
resulting from this section 2.7 shall conform to the requirements of section
2.2. Each such conversion shall be effected by the Borrower giving the
Administrative Agent at its Notice Office, prior to 11:00 A.M. (local time at
such Notice Office), at least three Business Days' (or prior to 11:00 A.M.
(local time at such Notice Office) same Business Day's, in the case of a
conversion into Prime Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing if so requested by the Administrative Agent) (each
a "NOTICE OF CONVERSION"), substantially in the form of Exhibit B-3, specifying
the Loans to be so converted and the Facility under which such Loans are
outstanding, the Type of Loans to be converted into and, if to be converted into
a Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its Loans. For the avoidance of doubt,
the prepayment or repayment of any Loans out of the proceeds of other Loans by
the Borrower is not considered a conversion of Loans into other Loans.
2.8. INTEREST ON REVOLVING LOANS. (a) The unpaid principal amount of
each General Revolving Loan which is (i) a Prime Rate Loan shall bear interest
from the date of the Borrowing thereof until maturity (whether by acceleration
or otherwise) at a fluctuating rate per annum which shall at all times be equal
to the Prime Rate in effect from time to time; or (ii) a Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin (as defined below) for such General Revolving Loan
PLUS the relevant Eurodollar Rate.
(b) The unpaid principal amount of each Swing Line Revolving Loan which
is (i) a Prime Rate Loan shall bear interest from the date of the Borrowing
thereof until maturity (whether by acceleration or otherwise) at a fluctuating
rate per annum which shall at all times be equal to the Prime Rate in effect
from time to time; or (ii) a Money Market Rate Loan shall bear interest from the
date of the Borrowing thereof until maturity (whether by acceleration or
otherwise) at a rate per annum which shall be equal to the Quoted Rate therefor.
(c) Notwithstanding the above provisions, if a Default under section
10.1(a) or Event of Default is in existence, all outstanding amounts of
principal and, to the extent permitted by law, all overdue interest, in respect
of each Revolving Loan shall bear interest, payable on demand, at a rate per
annum equal to 2% per annum above the
22
<PAGE> 28
interest rate otherwise applicable thereto. If any amount (other than the
principal of and interest on the Loans) payable by the Borrower under the Credit
Documents is not paid when due, such amount shall bear interest, payable on
demand, at a rate per annum equal to the Prime Rate in effect from time to time
PLUS 2% per annum.
(d) Interest shall accrue from and including the date of any Revolving
Borrowing to but excluding the date of any prepayment or repayment thereof and
shall be payable:
(i) in the case of any Swing Line Revolving Loan, on any
prepayment (on the amount prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand; and
(ii) in the case of any General Revolving Loan (A) which is a
Prime Rate Loan, quarterly in arrears on the last Business Day of
March, June, September and December, (B) which is a Eurodollar Loan, on
the last day of each Interest Period applicable thereto and, in the
case of an Interest Period in excess of three months, on the dates
which are successively three months after the commencement of such
Interest Period, and (C) in respect of each General Revolving Loan, on
any prepayment or conversion (on the amount prepaid or converted), at
maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) All computations of interest hereunder shall be made in accordance
with section 12.7(b).
(f) Each Reference Bank agrees to furnish the Administrative Agent
timely information for the purpose of determining the Eurodollar Rate for any
Borrowing consisting of Eurodollar Loans. If any one or more of the Reference
Banks shall not timely furnish such information, the Administrative Agent shall
determine the Eurodollar Rate on the basis of timely information furnished by
the remaining Reference Banks. The Administrative Agent upon determining the
interest rate for any Borrowing shall promptly notify the Borrower and the
Lenders thereof.
(g) As used herein, the term "APPLICABLE EURODOLLAR MARGIN", as applied
to any Loan which is a Eurodollar Loan, means the rate per annum determined by
the Administrative Agent in accordance with the Pricing Grid Table which appears
below, based on the Borrower's ratio of Consolidated Net Debt to Consolidated
Total Capital as of the end of the most recent fiscal quarter or fiscal year for
which financial statements have been delivered hereunder, and the following
provisions; PROVIDED that, subject to section 2.8(b), if any financial
statements referred to in section 8.1(a) or (b) are not timely delivered, the
Applicable Eurodollar Margin will be the highest rate indicated therefor in such
Table during the period from the due date of such financial statements until
such financial statements are so delivered. Initially, until changed hereunder
in accordance with the following provisions, the Applicable Eurodollar Margin
will be 16.50 basis points per annum. Subsequent to the fiscal quarter of the
Borrower ended on or nearest to March 31, 1998, the Administrative Agent will
determine the Applicable Eurodollar Margin for any Loan in accordance with the
Pricing Grid Table, based on the Borrower's ratio (expressed as a percentage) of
Consolidated Net Debt to Consolidated Capital as of the end of the most recent
fiscal quarter or fiscal year for which financial statements have been delivered
hereunder, and identified in such Table. Changes in the Applicable Eurodollar
Margin based upon changes in such ratio shall become effective on the first day
of the month following the receipt by the Administrative Agent pursuant to
section 8.1(a) or (b) of the financial statements of the Borrower, accompanied
by the certificate referred to in section 8.1(c), demonstrating the computation
of such ratio, based upon the ratio in effect at the end of the applicable
period covered by such financial statements. Any changes in the Applicable
Eurodollar Margin shall be determined by the Administrative Agent in accordance
with the above provisions and the Administrative Agent will promptly provide
notice of such determinations to the Borrower and the Lenders. Any such
determination by the Administrative Agent pursuant to this section 2.8(g) shall
be conclusive and binding absent manifest error.
23
<PAGE> 29
PRICING GRID TABLE
(EXPRESSED IN BASIS POINTS)
<TABLE>
<CAPTION>
=====================================================================================================================
Applicable Applicable
RATIO OF Eurodollar Facility
CONSOLIDATED NET DEBT Margin Fee Rate
TO
CONSOLIDATED TOTAL CAPITAL
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Greater than 40.00% 25.00 12.50
- ---------------------------------------------------------------------------------------------------------------------
Greater than 30.00% and less than or equal to 40.00% 20.00 10.00
- ---------------------------------------------------------------------------------------------------------------------
Equal or less than 30.00% 16.50 8.50
=====================================================================================================================
</TABLE>
2.9. INTEREST PERIODS. (a) At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 11:00 A.M. (local time at the applicable
Notice Office) on the third Business Day prior to the expiration of an Interest
Period applicable to a Borrowing of Eurodollar Loans, it shall have the right to
elect by giving the Administrative Agent written or telephonic notice (in the
case of telephonic notice, promptly confirmed in writing if so requested by the
Administrative Agent) of the Interest Period applicable to such Borrowing, which
Interest Period shall, at the option of the Borrower, be a one, two, three or
six month period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Prime Rate
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv) subject to the foregoing clauses (i) through (iii), (x)
only a one month Interest Period shall be available to be selected
prior to the Syndication Date; and (y) all General Revolving Loans
which constitute Eurodollar Loans and are outstanding during said
period shall have been incurred or converted into one or more
Borrowings, with all such Borrowings to commence and end on the same
day;
(v) no Interest Period for any Loan may be selected which
would end after the Maturity Date applicable thereto; and
(vi) no Interest Period may be elected at any time when a
Default under section 10.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
24
<PAGE> 30
(b) If upon the expiration of any Interest Period the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing to Prime Rate Loans
effective as of the expiration date of such current Interest Period.
2.10. INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender, shall have determined on a reasonable
basis (which determination shall, absent manifest error, be final and conclusive
and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder in an
amount which such Lender deems material with respect to any Eurodollar
Loans (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in
the rate of taxes or similar charges) because of (x) any change since
the Effective Date in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Eurodollar Rate pursuant
to the definition thereof) and/or (y) other circumstances adversely
affecting the interbank Eurodollar market or the position of such
Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any change since the Effective Date in any law,
governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Lender
customarily complies or has become impracticable as a result of a
contingency occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
THEN, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other applicable Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred or converted shall be deemed rescinded by the Borrower or, in
the case of a Notice of Borrowing, shall, at the option of the Borrower, be
deemed converted into a Notice of Borrowing for Prime Rate Loans to be made on
the date of Borrowing contained in such Notice of Borrowing, (y) in the case of
clause (ii) above, the Borrower shall pay to such Lender, upon written demand
therefor, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender shall
determine) as shall be required to compensate such Lender, for such increased
costs or reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Lender, showing the basis for the calculation
thereof, which basis must be reasonable, submitted to the Borrower by such
Lender shall, absent manifest error, be final and conclusive and binding upon
all parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in section 2.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in section 2.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to section 2.10(a)(iii) the
Borrower
25
<PAGE> 31
shall) either (i) if the affected Eurodollar Loan is then being made pursuant to
a Borrowing, by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to section 2.10(a)(ii) or (iii), cancel said Borrowing,
convert the related Notice of Borrowing into one requesting a Borrowing of Prime
Rate Loans or require the affected Lender to make its requested Loan as a Prime
Rate Loan, or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least one Business Day's notice to the Administrative Agent, require the
affected Lender to convert each such Eurodollar Loan into a Prime Rate Loan,
PROVIDED that if more than one Lender is affected at any time, then all affected
Lenders must be treated the same pursuant to this section 2.10(b).
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank, or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 2.10(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
which basis must be reasonable, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this section 2.10(c) upon the subsequent receipt
of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 2.10 for any amounts incurred or accruing more than 90
days prior to the giving of notice to the Borrower of additional costs or other
amounts of the nature described in such sections, and (ii) no Lender shall
demand compensation for any reduction referred to in section 2.10(c) if it shall
not at the time be the general policy or practice of such Lender to demand such
compensation, payment or reimbursement in similar circumstances under comparable
provisions of other credit agreements.
2.11. BREAKAGE COMPENSATION. The Borrower shall compensate each
applicable Lender, upon its written request (which request shall set forth the
detailed basis for requesting and the method of calculating such compensation),
for all reasonable losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the liquidation
or reemployment of deposits or other funds required by such Lender to fund its
Eurodollar Loans or Money Market Rate Loans) which such Lender may sustain: (i)
if for any reason (other than a default by such Lender or the Administrative
Agent), (A) a Borrowing of Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
rescinded or withdrawn by the Borrower or deemed rescinded or withdrawn pursuant
to section 2.10(a)), or (B) a Borrowing of Money Market Rate Loans does not
occur on a date specified therefor in a Notice of Borrowing; (ii) if any
repayment, prepayment or conversion of any of its Eurodollar Loans occurs on a
date which is not the last day of an Interest Period applicable thereto; (iii)
if any repayment or prepayment of any of its Money Market Rate Loans occurs on a
date which is not the maturity date thereof; (iv) if any prepayment of any of
its Eurodollar Loans or Money Market Rate Loans, as the case may be, is not made
on any date specified in a notice of prepayment given by the Borrower; or (v) as
a consequence of (x) any other default by the Borrower to repay its Eurodollar
Loans or Money Market Rate Loans when required by the terms of this Agreement or
(y) an election made pursuant to section 2.10(b).
2.12. CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS. (a) Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
section 2.10(a)(ii) or (iii) or 2.10(c) with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such
26
<PAGE> 32
Lender) to designate another Applicable Lending Office for any Loans or
Commitment affected by such event, PROVIDED that such designation is made on
such terms that such Lender and its Applicable Lending Office suffer no
economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such section.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 2.10(a)(ii) or (iii) or 2.10(c) with respect to such
Lender, or if any Lender is a Defaulting Lender, then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with the restrictions contained in section 12.4(b)), all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); PROVIDED that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts), and (iii) in the case of any
such assignment resulting from a claim for compensation, reimbursement or other
payments required to be made under section 2.10(a)(ii) or (iii) or 2.10(c) with
respect to such Lender, such assignment will result in a reduction in such
compensation, reimbursement or payments. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
(c) Nothing in this section 2.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in section 2.10.
SECTION 3. FEES.
3.1. FACILITY FEE. (a) The Borrower agrees to pay to the Administrative
Agent a Facility Fee ("FACILITY FEE") for the account of each Non-Defaulting
Lender which has a General Revolving Commitment for the period from and
including the Effective Date to but not including the date the Total General
Revolving Commitment has been terminated, on the daily amount of the Total
General Revolving Commitment, whether used or unused, at the Applicable Facility
Fee Rate, payable quarterly in arrears on the last Business day of each March,
June, September and December and on the General Revolving Maturity Date,
commencing with the last Business day of March 1998 for the period from the
Effective Date to such date.
(b) As used herein, the term "APPLICABLE FACILITY FEE RATE" means the
rate per annum determined by the Administrative Agent in accordance with the
Pricing Grid Table which appears in section 2.8(g), based on the Borrower's
ratio of Consolidated Net Debt to Consolidated Total Capital as of the end of
the most recent fiscal quarter or fiscal year for which financial statements
have been delivered hereunder, and following provisions; PROVIDED, that,
notwithstanding anything to the contrary contained herein, during any period in
which a Default under section 10.1(a) or Event of Default shall have occurred
and be continuing, the Applicable Facility Fee Rate will be the highest rate per
annum indicated for the Applicable Facility Fee Rate in such Pricing Grid Table.
Initially, until changed hereunder in accordance with the following provisions,
the Applicable Facility Fee Rate will be 8.50 basis points per annum. Subsequent
to the fiscal quarter of the Borrower ended on or nearest to March 31, 1998, the
Administrative Agent will determine the Applicable Facility Fee Rate in
accordance with such Pricing Grid Table, based on the Borrower's ratio
(expressed as a percentage) of Consolidated Net Debt to Consolidated Capital as
of the end of the most recent fiscal quarter or fiscal year for which financial
statements have been delivered hereunder, and identified in such Table. Changes
in the Applicable Facility Fee Rate, based upon changes in the Borrower's ratio
of Consolidated Net Debt to Consolidated Total Capital, shall become effective
on the first day of the month following the receipt by the Administrative Agent
pursuant to section 8.1(a) or (b) of the financial statements of the Borrower,
accompanied by the certificate referred to in section 8.1(c), demonstrating the
computation of such ratio, based upon the ratio in effect at the end of the
applicable period covered by such financial statements. Any changes in the
Applicable Facility Fee Rate shall be determined by the Administrative Agent in
accordance with the above provisions and the Administrative
27
<PAGE> 33
Agent will promptly provide notice of such determinations to the Borrower and
the Lenders. Any such determination by the Administrative Agent pursuant to this
section 3.1(b) shall be conclusive and binding absent manifest error.
3.2. OTHER FEES. The Borrower shall pay to the Administrative Agent on
the Effective Date and thereafter for its own account and/or for distribution to
the Lenders such fees as heretofore agreed by the Borrower and the
Administrative Agent.
3.3. COMPUTATIONS OF FEES. All computations of Fees shall be made in
accordance with section 12.7(b).
SECTION 4. COMMITMENTS.
4.1. VOLUNTARY TERMINATION/REDUCTION OF COMMITMENTS. Upon at least
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right, without premium or penalty, to:
(a) terminate the Total General Revolving Commitment, PROVIDED
that (i) the Swing Line Revolving Commitment is simultaneously
terminated; (ii) any and all outstanding General Revolving Loans and
any and all outstanding Swing Line Revolving Loans are
contemporaneously prepaid in accordance with section 5.1; and (iii) any
and all outstanding Competitive Bid Loans are contemporaneously prepaid
in accordance with section 2.4;
(b) terminate the Swing Line Revolving Commitment, PROVIDED
that all outstanding Swing Line Revolving Loans are contemporaneously
prepaid in accordance with section 5.1; and/or
(c) partially and permanently reduce (x) the Unutilized Total
General Revolving Commitment, and/or (y) the Unutilized Swing Line
Revolving Commitment, PROVIDED that:
(i) any such reduction shall apply to proportionately
and permanently reduce the applicable Commitment of each of
the affected Lenders;
(ii) any partial reduction of the Unutilized Total
General Revolving Commitment pursuant to this section 4.1
shall be in the amount of at least $5,000,000 (or, if greater,
in integral multiples of $1,000,000);
(iii) any partial reduction of the Unutilized Swing
Line Revolving Commitment pursuant to this section 4.1 shall
be in the amount of at least $1,000,000 (or, if greater, in
integral multiples of $500,000);
(iv) in the case of any such partial reduction of the
Unutilized Total General Revolving Commitment, after giving
effect thereto, the outstanding Swing Line Revolving Loans, if
any, do not exceed the Unutilized Total General Revolving
Commitment as so reduced (and after giving effect to any
Competitive Bid Reduction).
4.2. MANDATORY TERMINATION OF COMMITMENTS, ETC. (a) The Total
Commitment (and each Commitment of each Lender) shall terminate on January 31,
1998, unless the Initial Borrowing Date has occurred on or prior to such date.
(b) The Total General Revolving Commitment (and the General Revolving
Commitment of each Lender) shall terminate on the earlier of (x) the General
Revolving Maturity Date and (y) the date on which a Change of Control occurs.
28
<PAGE> 34
(c) The Total Swing Line Revolving Commitment (and the Swing Line
Revolving Commitment of each Lender) shall terminate on the earlier of (x) the
Swing Line Revolving Maturity Date and (y) the date on which a Change of Control
occurs.
4.3. EXTENSION OF MATURITY DATES. At any time after January 1, 1999,
and during the 30 day period following delivery by the Borrower pursuant to
section 8.1(a) of its consolidated financial statements for its fiscal year then
most recently ended, and annually thereafter during the 30 day period following
delivery by the Borrower of its consolidated financial statements pursuant to
section 8.1(a), the Borrower may request the Administrative Agent to determine
if (x) all of the Lenders with Swing Line Revolving Commitments are then willing
to extend the Swing Line Maturity Date for a single additional year, and (y) all
of the Lenders with General Revolving Commitments are then willing to extend the
General Revolving Maturity Date for a single additional year. If the Borrower so
requests, the Administrative Agent will so advise the Lenders. If all of the
Lenders in their sole discretion are all willing to so extend the Swing Line
Revolving Maturity Date and the General Revolving Maturity Date, as applicable,
after taking into account such considerations as any Lender may deem relevant,
the Borrower, the Administrative Agent and all of the Lenders shall execute and
deliver a definitive written instrument so extending the Swing Line Maturity
Date and/or the General Revolving Maturity Date. No such extension of the Swing
Line Revolving Maturity Date and/or the General Revolving Maturity Date shall be
valid or effective for any purpose unless such definitive written instrument is
so signed and delivered within 60 days following the giving by the
Administrative Agent of notice to the Lenders that the Borrower has requested
such an extension.
SECTION 5. PAYMENTS.
5.1. VOLUNTARY PREPAYMENTS OF REVOLVING LOANS. The Borrower shall have
the right to prepay any of its Revolving Loans, in whole or in part, without
premium or penalty, from time to time on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent at the
Notice Office written or telephonic notice (in the case of telephonic
notice, promptly confirmed in writing if so requested by the
Administrative Agent) of its intent to prepay the Loans, the amount of
such prepayment and (in the case of Eurodollar Loans or Money Market
Rate Loans) the specific Borrowing(s) pursuant to which made, which
notice shall be received by the Administrative Agent by
(x) 11:00 A.M. (local time at the Notice Office)
three Business Days prior to the date of such prepayment, in
the case of any prepayment of Eurodollar Loans, or
(y) 11:00 A.M. (local time at the Notice Office) on
the date of such prepayment, in the case of any prepayment of
Prime Rate Loans or Money Market Rate Loans,
and which notice shall promptly be transmitted by the Administrative
Agent to each of the affected Lenders;
(ii) in the case of prepayment of any Borrowings under the
General Revolving Facility, each partial prepayment of any such
Borrowing shall be in an aggregate principal of at least $5,000,000 or
an integral multiple of $1,000,000 in excess thereof, in the case of
Prime Rate Loans and at least $5,000,000 or an integral multiple of
$1,000,000 in excess thereof, in the case of Eurodollar Loans;
(iii) in the case of prepayment of any Borrowings under the
Swing Line Revolving Facility, each partial prepayment of any such
Borrowing shall be in an aggregate principal of at least $2,000,000 or
an integral multiple of $500,000 in excess thereof;
(iv) no partial prepayment of any Loans made pursuant to a
Borrowing shall reduce the aggregate principal amount of such Loans
outstanding pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto;
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(v) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans; and
(vi) each prepayment of Eurodollar Loans or Money Market Rate
Loans pursuant to this section 5.1 on any date other than the last day
of the Interest Period applicable thereto, in the case of Eurodollar
Loans, or the maturity date thereof, in the case of Money Market Rate
Loans, as the case may be, shall be accompanied by any amounts payable
in respect thereof under section 2.11.
5.2. MANDATORY PREPAYMENTS. The Loans shall be subject to mandatory
prepayment in accordance with the following provisions:
(a) IF OUTSTANDING GENERAL REVOLVING LOANS, ETC EXCEED TOTAL
GENERAL REVOLVING COMMITMENT. If on any date (after giving effect to
any other payments on such date) the sum of (i) the aggregate
outstanding principal amount of General Revolving Loans, PLUS (ii) the
aggregate outstanding principal amount of Competitive Bid Loans,
exceeds the Total General Revolving Commitment as then in effect
(without giving effect to any Competitive Bid Reduction), the Borrower
shall prepay on such date that principal amount of General Revolving
Loans and, after General Revolving Loans have been paid in full, that
principal amount of Competitive Bid Loans, in an aggregate amount,
conforming in the case of prepayments of General Revolving Loans to the
requirements of section 5.1 as to the amount of partial prepayments
provided for therein, at least equal to such excess.
(b) IF OUTSTANDING SWING LINE REVOLVING LOANS EXCEED THE
UNUTILIZED TOTAL GENERAL REVOLVING COMMITMENT. If on any date (after
giving effect to any other payments on such date) the aggregate
outstanding principal amount of Swing Line Revolving Loans exceeds the
Unutilized Total General Revolving Commitment as then in effect (after
giving effect to any Competitive Bid Reduction),, the Borrower shall
prepay on such date Swing Line Revolving Loans in an aggregate
principal amount, conforming to the requirements of section 5.1 as to
the amount of partial prepayments provided for therein, at least equal
to such excess.
(c) IF OUTSTANDING SWING LINE REVOLVING LOANS EXCEED THE SWING
LINE REVOLVING COMMITMENT. If on any date (after giving effect to any
other payments on such date) the aggregate outstanding principal amount
of Swing Line Revolving Loans exceeds the Swing Line Revolving
Commitment as then in effect, the Borrower shall prepay on such date
Swing Line Revolving Loans in an aggregate principal amount, conforming
to the requirements of section 5.1 as to the amount of partial
prepayments provided for therein, at least equal to such excess.
(d) CHANGE OF CONTROL. On the date on which a Change of
Control occurs, notwithstanding anything to the contrary contained in
this Agreement, no further Borrowings shall be made and the then
outstanding principal amount of all Loans, if any, shall become due and
payable and shall be prepaid in full.
(e) PARTICULAR LOANS TO BE PREPAID. With respect to each
prepayment of Loans required by this section 5.2, the Borrower shall
designate the Types of Loans which are to be prepaid and the specific
Borrowing(s) pursuant to which such prepayment is to be made, PROVIDED
that (i) the Borrower shall first so designate all Loans that are Prime
Rate Loans and Eurodollar Loans with Interest Periods ending on the
date of prepayment prior to designating any other Eurodollar Loans for
prepayment, (ii) if the outstanding principal amount of Eurodollar
Loans made pursuant to a Borrowing is reduced below the applicable
Minimum Borrowing Amount as a result of any such prepayment, then all
the Loans outstanding pursuant to such Borrowing shall be converted
into Prime Rate Loans, and (iii) each prepayment of any Loans made
pursuant to a Borrowing shall be applied PRO RATA among such Loans. In
the absence of a designation by the Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the
above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under section 2.11. Any
prepayment of Eurodollar Loans or Money Market Rate Loans pursuant to
this section 5.2 shall in all events be accompanied by such
compensation as is required by section 2.11.
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5.3. METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its PRO RATA share) account of
the Lenders entitled thereto, not later than 11:00 A.M. (local time at the
Payment Office) on the date when due and shall be made in immediately available
funds and in lawful money of the United States of America at the Payment Office,
it being understood that written notice by the Borrower to the Administrative
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 11:00 A.M. (local time at the Payment Office) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
5.4. NET PAYMENTS. All payments made by the Borrower hereunder, under
any Note or any other Credit Document, will be made without setoff, counterclaim
or other defense.
5.5. WITHHOLDING TAX EXEMPTION. (a) Each Lender that is not a United
States person (as such term is defined in section 7701(a)(30) of the Code) for
Federal income tax purposes agrees to provide to the Borrower and the
Administrative Agent on or prior to the Effective Date, or in the cases of a
Lender that is an assignee or transferee of an interest under this Agreement
pursuant to section 12.4 (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer and such Lender is in
compliance with the provisions of this section 5.5), on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
or any other Credit Document.
(b) In addition, each Lender agrees that from time to time after the
Effective Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Administrative Agent two new accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001,
as the case may be, and such other forms as may be required in order to confirm
or establish the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any other Credit Document, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such Form
and that it is not capable of receiving payments under the Credit Documents
without deduction or withholding of United States federal income tax, in which
case such Lender shall not be required to deliver any such Form pursuant to this
section 5.5.
SECTION 6. CONDITIONS PRECEDENT.
6.1. CONDITIONS PRECEDENT AT INITIAL BORROWING DATE. The obligation of
the Lenders to make Revolving Loans is subject to the satisfaction of each of
the following conditions on the Initial Borrowing Date:
(a) EFFECTIVENESS; REVOLVING NOTES. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii)
there shall have been delivered to the Administrative Agent for the
account of each Lender the appropriate Revolving Note or Notes executed
by the Borrower, in each case, in the amount, maturity and as otherwise
provided herein.
(b) FEES, ETC. The Borrower shall have paid or caused to be
paid all fees required to be paid by it on or prior to such date
pursuant to section 4 hereof and all reasonable fees and expenses of
the Administrative Agent and of special counsel to the Administrative
Agent which have been invoiced on or prior to such date in connection
with the preparation, execution and delivery of this Agreement and the
other Credit Documents and the consummation of the transactions
contemplated hereby and thereby.
(c) CORPORATE RESOLUTIONS AND APPROVALS. The Administrative
Agent shall have received, in sufficient quantity for the
Administrative Agent and the Lenders, certified copies of the
resolutions of the
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Board of Directors of the Borrower, approving the Credit Documents to
which the Borrower is or may become a party, and of all documents
evidencing other necessary corporate action and governmental approvals,
if any, with respect to the execution, delivery and performance by the
Borrower of the Credit Documents to which it is or may become a party.
(d) INCUMBENCY CERTIFICATE. The Administrative Agent shall
have received, in sufficient quantity for the Administrative Agent and
the Lenders, a certificate of the Secretary or an Assistant Secretary
of the Borrower, certifying the names and true signatures of the
officers of the Borrower authorized to sign the Credit Documents to
which the Borrower is a party and any other documents to which the
Borrower is a party which may be executed and delivered in connection
herewith.
(e) OPINION OF COUNSEL. On the Initial Borrowing Date, the
Administrative Agent shall have received an opinion, addressed to the
Administrative Agent and each of the Lenders and dated the Initial
Borrowing Date, from Turner, Granzow & Hollenkamp, special counsel to
the Borrower, substantially in the form of Exhibit C hereto and
covering such other matters incident to the transactions contemplated
hereby as the Administrative Agent may reasonably request, such opinion
to be in form and substance satisfactory to the Administrative Agent.
(f) COMPLETION OF UARCO ACQUISITION. Contemporaneously with
the initial Borrowing hereunder on the Initial Borrowing Date, the
Borrower shall have completed the Uarco Acquisition in accordance with
the Uarco Acquisition Documents, PROVIDED that at the time of
completion of the Uarco Acquisition all of the following conditions
shall be satisfied:
(i) The Borrower shall have delivered to the
Administrative Agent, in sufficient quantities for the
Lenders, (x) all of the Uarco Acquisition Documents, certified
as true and correct by an Authorized Officer, all of which
Acquisition Documents shall be in the same form as they were
in at the time they were previously furnished to the Lenders
not later than five days prior to the Effective Date, or shall
otherwise be satisfactory to the Required Lenders; and (y) not
later than five days prior to the Effective Date, copies of
all financial statements and other material financial
information furnished to the Borrower pursuant to the
provisions of the Uarco Acquisition Documents.
(ii) Each of the conditions precedent to the
obligations of the Borrower to consummate the Uarco
Acquisition which is contained in any of the Uarco Acquisition
Documents shall have been fulfilled (without any waiver
thereto not consented to by the Required Lenders) to the
satisfaction of the Required Lenders.
(iii) Without limiting the generality of the
foregoing, the Uarco Acquisition shall have been consummated
in compliance with the terms of the Uarco Acquisition
Documents and all applicable laws, and all material
governmental and third party approvals in connection with the
Uarco Acquisition contemplated by the Uarco Acquisition
Documents and otherwise referred to herein or therein shall
have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being
taken by any competent authority (including any court having
jurisdiction) which restrains or prevents such transactions or
imposes, in the judgment of the Required Lenders, materially
adverse conditions upon the consummation of the Uarco
Acquisition or the continued operation of the Borrower's
businesses or the business to be acquired by the Borrower in
the Uarco Acquisition.
(g) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be satisfactory in substance and form to the
Administrative Agent and the Lenders and the Administrative Agent and
its special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such documents as
the Administrative Agent or its special counsel or any Lender may
reasonably request.
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6.2. CONDITIONS PRECEDENT TO ALL LOANS (OTHER THAN COMPETITIVE BID
BORROWINGS). The obligations of the Lenders to make each Revolving Loan is
subject, at the time thereof, to the satisfaction of the following conditions:
(a) NOTICE OF BORROWING. The Administrative Agent shall have
received a Notice of Revolving Borrowing meeting the requirements of
section 2.2 with respect to the incurrence of such Revolving Loans.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
each such Loan and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties of the Borrower contained herein shall be true and correct
in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of
such Loans, except to the extent that such representations and
warranties expressly relate to an earlier specified date, in which case
such representations and warranties shall have been true and correct in
all material respects as of the date when made.
The acceptance of the benefits of each Revolving Loan shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 6.1 and/or 6.2, as the case may
be, exist as of that time. All of the certificates, legal opinions and other
documents and papers referred to in section 6.1 or this section 6.2, unless
otherwise specified, shall be delivered to the Administrative Agent for the
account of each of the Lenders and, except for the Notes, in sufficient
counterparts for each of the Lenders, and the Administrative Agent will promptly
distribute to the Lenders their respective Revolving Notes and the copies of
such other certificates, legal opinions and documents.
6.3. CONDITIONS PRECEDENT TO EACH COMPETITIVE BID BORROWING. The
obligation of each Lender which is to make a Competitive Bid Loan on the
occasion of a Competitive Bid Borrowing (including the initial Competitive Bid
Borrowing) to make such Competitive Bid Loan as part of such Competitive Bid
Borrowing is subject to satisfaction of each of the following conditions;
(a) NOTICE OF COMPETITIVE BID BORROWING. The Administrative
Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto.
(b) COMPETITIVE BID NOTE. On or before the date of such
Competitive Bid Borrowing, but prior to such Competitive Bid Borrowing,
the Administrative Agent shall have received a Competitive Bid Note
payable to the order of such Lender.
(c) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time
thereof and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
of the Borrower contained herein shall be true and correct in all
material respects with the same effect as though such representations
and warranties had been made on and as of the date of such Competitive
Bid Loan, except to the extent that such representations and warranties
expressly relate to an earlier specified date, in which case such
representations and warranties shall have been true and correct in all
material respects as of the date when made.
The acceptance of the benefits of each Competitive Bid Loan shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in this section 6.3 exist as of that time.
The Administrative Agent will promptly distribute to the Lenders participating
in such Competitive Bid Borrowing their respective Competitive Bid Notes.
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SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans provided for herein, the Borrower makes the following representations
and warranties to, and agreements with, the Lenders, all of which shall survive
the execution and delivery of this Agreement and the making of any such Loans:
7.1. CORPORATE STATUS, ETC. Each of the Borrower and its Subsidiaries
(i) is a duly organized or formed and validly existing corporation, partnership
or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect.
7.2. SUBSIDIARIES. Annex II hereto lists, as of the date hereof, each
Subsidiary of the Borrower (and the direct and indirect ownership interest of
the Borrower therein).
7.3. CORPORATE POWER AND AUTHORITY, ETC. The Borrower has the corporate
power and authority to execute, deliver and carry out the terms and provisions
of the Credit Documents to which it is party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Credit Documents to which it is party. The Borrower has duly executed and
delivered each Credit Document to which it is party and each Credit Document to
which it is party constitutes the legal, valid and binding agreement or
obligation of the Borrower enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
7.4. NO VIOLATION. Neither the execution, delivery and performance by
the Borrower of the Credit Documents to which it is party nor compliance with
the terms and provisions thereof (i) will contravene any provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality applicable to the Borrower or its properties and
assets, (ii) will conflict with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of the Borrower pursuant to the terms of
any promissory note, bond, debenture, indenture, mortgage, deed of trust, credit
or loan agreement, or any other material agreement or other instrument, to which
the Borrower is a party or by which it or any of its property or assets are
bound or to which it may be subject, or (iii) will violate any provision of the
articles of incorporation or code of regulations of the Borrower.
7.5. GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by the Borrower of any
Credit Document to which it is a party, or (ii) the legality, validity, binding
effect or enforceability of any Credit Document to which the Borrower is a
party.
7.6. LITIGATION. There are no actions, suits or proceedings pending or,
to, the knowledge of the Borrower, threatened with respect to the Borrower or
any of its Subsidiaries (i) that have, or could reasonably be expected to have,
a Material Adverse Effect, or (ii) which question the validity or enforceability
of any of the Credit Documents, or of any action to be taken by the Borrower
pursuant to any of the Credit Documents to which it is a party.
7.7. USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Loans
shall be utilized (i) to finance the Uarco Acquisition, and (ii) for other
lawful purposes not inconsistent with the requirements of this Agreement.
Notwithstanding anything to the contrary contained herein, no proceeds of any
Loans shall be used by the Borrower, directly or indirectly, to finance any
acquisition which is actively opposed by the Board of Directors (or similar
governing body) of the person or persons to be acquired in such transaction,
unless all of the Lenders consent to such use of the proceeds of the Loans.
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(b) No part of the proceeds of any Loans will be used directly or
indirectly to purchase or carry Margin Stock, or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock. Neither any Loans, nor
the use of the proceeds thereof, will violate or be inconsistent with the
provisions of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System. The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. At no time would
more than 25% of the value of the assets of the Borrower or of the Borrower and
its consolidated Subsidiaries that are subject to any "arrangement" (as such
term is used in section 221.2(g) of such Regulation U) hereunder be represented
by Margin Stock.
7.8. FINANCIAL STATEMENTS, ETC. (a) The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of (i) the
audited consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of December 31, 1996, and December 31, 1995, and the related
audited consolidated statements of income, stockholders' equity, and cash flows
for the fiscal years then ended, accompanied by the unqualified report thereon
of the Borrower's independent accountants; and (ii) the unaudited condensed
consolidated balance sheets of the Borrower and its consolidated subsidiaries as
of September 30, 1997, and the related unaudited condensed consolidated
statements of income and of cash flows of the Borrower and its consolidated
subsidiaries for the fiscal quarter or quarters then ended, as contained in the
Form 10-Q Quarterly Report of the Borrower filed with the SEC. All such
financial statements have been prepared in accordance with GAAP, consistently
applied (except as stated therein), and fairly present the financial position of
the Borrower and its consolidated subsidiaries as of the respective dates
indicated and the consolidated results of their operations and cash flows for
the respective periods indicated, subject in the case of any such financial
statements which are unaudited, to normal audit adjustments, none of which will
involve a Material Adverse Effect.
(b) The Borrower has received consideration which is the reasonable
equivalent value of the obligations and liabilities that the Borrower has
incurred to the Administrative Agent and the Lenders. The Borrower now has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage and is now solvent and able to
pay its debts as they mature and the Borrower, as of the Initial Borrowing Date,
owns property having a value, both at fair valuation and at present fair salable
value, greater than the amount required to pay the Borrower's debts; and the
Borrower is not entering into the Credit Documents with the intent to hinder,
delay or defraud its creditors.
(c) The Borrower has delivered or caused to be delivered to the Lenders
prior to the execution and delivery of this Agreement (i) a copy of the
Borrower's Report on Form 10-K as filed (without Exhibits) with the SEC for its
fiscal year ended December 31, 1996, which contains a general description of the
business and affairs of the Borrower and its Subsidiaries; (ii) copies of the
financial statements referred to in section 3.4 of the Stock Purchase Agreement
(referred to in the definition of Uarco Acquisition Documents); (iii) a PRO
FORMA consolidated balance sheet and consolidated income statement of the
Borrower and its consolidated subsidiaries which gives effect to the completion
of the Uarco Acquisition; and (iv) financial projections prepared by management
of the Borrower for the Borrower and its Subsidiaries for the fiscal years
1998-2000 (the "FINANCIAL PROJECTIONS"). The Financial Projections were prepared
on behalf of the Borrower in good faith after taking into account the existing
and historical levels of business activity of the Borrower and its Subsidiaries,
information supplied to the Borrower in connection with the Uarco Acquisition,
known trends, including general economic trends, and all other information,
assumptions and estimates considered by management of the Borrower and its
Subsidiaries to be pertinent thereto. The Financial Projections were considered
by management of the Borrower, as of such date of preparation, to be
realistically achievable; PROVIDED, that no representation or warranty is made
as to the impact of future general economic conditions or as to whether the
Borrower's projected consolidated results as set forth in the Financial
Projections will actually be realized. No facts are known to the Borrower at the
date hereof which, if reflected in the Financial Projections, would result in a
material adverse change in the assets, liabilities, results of operations or
cash flows reflected therein.
7.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 1996, there has
been no change in the condition, business or affairs of the Borrower and its
Subsidiaries taken as a whole, or their properties and assets considered as an
entirety, except for changes, none of which, individually or in the aggregate,
has had or could reasonably be expected to have, a Material Adverse Effect.
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7.10. TAX RETURNS AND PAYMENTS. Each of the Borrower and each of its
Subsidiaries has (i) filed all federal income tax returns and all other material
tax returns, domestic and foreign, required to be filed by it, except for any
amendments to any such returns which may be required to be filed and the failure
to file the same has been deferred for valid business reasons and will not
result in material penalties or additions to taxes; and (ii) paid all material
taxes and assessments payable by it which have become due, other than those not
yet delinquent and except for those contested in good faith. The Borrower and
each of its Subsidiaries has established on its books such charges, accruals and
reserves in respect of taxes, assessments, fees and other governmental charges
for all fiscal periods as are required by GAAP. The Borrower knows of no
proposed assessment for additional federal, foreign or state taxes for any
period, or of any basis therefor, which, individually or in the aggregate,
taking into account such charges, accruals and reserves in respect thereof as
the Borrower and its Subsidiaries have made, could reasonably be expected to
have a Material Adverse Effect.
7.11. TITLE TO PROPERTIES, ETC. The Borrower and each of its
Subsidiaries has good and marketable title, in the case of real property, and
good title (or valid leasehold interests, in the case of any leased property),
in the case of all other property, to all of its properties and assets free and
clear of Liens other than Liens permitted by section 9.3. The interests of the
Borrower and each of its Subsidiaries in the properties reflected in the most
recent balance sheet referred to in section 7.8, taken as a whole, were
sufficient, in the judgment of the Borrower, as of the date of such balance
sheet for purposes of the ownership and operation of the businesses conducted by
the Borrower and such Subsidiaries.
7.12. LAWFUL OPERATIONS, ETC. The Borrower and each of its Subsidiaries
(i) holds all necessary federal, state and local governmental licenses,
registrations, certifications, permits and authorizations necessary to conduct
its business, and (ii) is in full compliance with all material requirements
imposed by law, regulation or rule, whether federal, state or local, which are
applicable to it, its operations, or its properties and assets, including
without limitation, applicable requirements of Environmental Laws, except for
any failure to obtain and maintain in effect, or noncompliance, which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
7.13. ENVIRONMENTAL MATTERS. (a) The Borrower and each of its
Subsidiaries is in compliance with all Environmental Laws governing its business
except to the extent that any such failure to comply (together with any
resulting penalties, fines or forfeitures) would not reasonably be expected to
have a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the business of the Borrower and each of its
Subsidiaries, as conducted as of the Initial Borrowing Date, under any
Environmental Law have been secured and the Borrower and each of its
Subsidiaries is in substantial compliance therewith, except for such licenses,
permits, registrations or approvals the failure to secure or to comply therewith
is not reasonably likely to have a Material Adverse Effect. There are as of the
Initial Borrowing Date no Environmental Claims pending or, to the best knowledge
of the Borrower, threatened wherein an unfavorable decision, ruling or finding
would reasonably be expected to have a Material Adverse Effect. There are no
facts, circumstances, conditions or occurrences on any Real Property now or at
any time owned, leased or operated by the Borrower or any of its Subsidiaries or
on any property adjacent to any such Real Property, which are known by the
Borrower or as to which the Borrower or any such Subsidiary has received written
notice, that could reasonably be expected (i) to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or any Real
Property of the Borrower or any of its Subsidiaries, or (ii) to cause such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property under any Environmental Law, except in
each such case, such Environmental Claims or restrictions that individually or
in the aggregate would not reasonably be expected to have a Material Adverse
Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrower or any of its Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is not in compliance with
Environmental Laws and is reasonably likely to have a Material Adverse Effect.
7.14. COMPLIANCE WITH ERISA. Compliance by the Borrower with the
provisions hereof and Loans contemplated hereby will not involve any prohibited
transaction within the meaning of ERISA or section 4975 of the Code. The
Borrower and each of its Subsidiaries, (i) has fulfilled all obligations under
minimum funding standards
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of ERISA and the Code with respect to each Plan that is not a Multiemployer Plan
or a Multiple Employer Plan, (ii) has satisfied all respective contribution
obligations in respect of each Multiemployer Plan and each Multiple Employer
Plan, (iii) is in compliance in all material respects with all other applicable
provisions of ERISA and the Code with respect to each Plan, each Multiemployer
Plan and each Multiple Employer Plan, and (iv) has not incurred any liability
under the Title IV of ERISA to the PBGC with respect to any Plan, any
Multiemployer Plan, any Multiple Employer Plan, or any trust established
thereunder. No Plan or trust created thereunder has been terminated, and there
have been no Reportable Events, with respect to any Plan or trust created
thereunder or with respect to any Multiemployer Plan or Multiple Employer Plan,
which termination or Reportable Event will or could result in the termination of
such Plan, Multiemployer Plan or Multiple Employer Plan and give rise to a
material liability of the Borrower or any ERISA Affiliate in respect thereof.
Neither the Borrower nor any ERISA Affiliate is at the date hereof, or has been
at any time within the two years preceding the date hereof, an employer required
to contribute to any Multiemployer Plan or Multiple Employer Plan, or a
"contributing sponsor" (as such term is defined in section 4001 of ERISA) in any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower nor any ERISA
Affiliate has any contingent liability with respect to any post-retirement
"welfare benefit plan" (as such term is defined in ERISA) except as has been
disclosed to the Lenders in writing.
7.15. INTELLECTUAL PROPERTY, ETC. The Borrower and each of its
Subsidiaries has obtained or has the right to use all material patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any known conflict with the rights of others,
EXCEPT for such patents, trademarks, servicemarks, trade names, copyrights,
licenses and rights, the loss of which, and such conflicts, which in any such
case individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
7.16. INVESTMENT COMPANY ACT, ETC. Neither the Borrower nor any of its
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Company Act of 1940, as amended, the
Interstate Commerce Act, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any applicable state
public utility law.
7.17. EXISTING INDEBTEDNESS. Annex III sets forth a true and complete
list, as of the date or dates set forth therein, of all Indebtedness of the
Borrower and each of its Subsidiaries, on a consolidated basis, which (i) has an
outstanding principal amount of at least $1,000,000, or may be incurred pursuant
to existing commitments or lines of credit or (ii) is secured by any Lien on any
property of the Borrower or any Subsidiary, and which will be outstanding on the
Initial Borrowing Date after giving effect to the initial Borrowing hereunder,
other than the Indebtedness created under the Credit Documents (all such
Indebtedness, whether or not in a principal amount meeting such threshold and
required to be so listed on Annex III, herein the "EXISTING INDEBTEDNESS"). The
Borrower has provided to the Administrative Agent prior to the date of execution
hereof true and complete copies (or summary descriptions) of all agreements and
instruments governing the Indebtedness listed on Annex III (the "EXISTING
INDEBTEDNESS AGREEMENTS").
7.18. TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein, other than the Financial Projections (as to which
representations are made only as provided in section 7.8), is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of such person in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that any such
future information consisting of financial projections prepared by management of
the Borrower is only represented herein as being based on good faith estimates
and assumptions believed by such persons to be reasonable at the time made, it
being recognized by the Lenders that such projections as to future events are
not to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ materially from the projected
results. As of the Effective Date, there is no fact known to the Borrower or any
of its Subsidiaries which has, or could reasonably be expected to have, a
Material Adverse Effect which has not theretofore been disclosed in writing to
the Lenders.
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SECTION 8. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that so long as this Agreement
is in effect and until such time as the Total Commitment has been terminated, no
Notes are outstanding and the Loans, together with interest, Fees and all other
Obligations hereunder, have been paid in full:
8.1. REPORTING REQUIREMENTS. The Borrower will furnish to each Lender
and the Administrative Agent:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within 90 days after the close of each fiscal year of the
Borrower, the consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income, of stockholder's equity and
of cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year, all in reasonable
detail and accompanied by the opinion with respect to such consolidated
financial statements of Batelle & Batelle LLP, or other independent
public accountants of recognized national standing selected by the
Borrower, which opinion shall be unqualified and shall (i) state that
such accountants audited such consolidated financial statements in
accordance with generally accepted auditing standards, that such
accountants believe that such audit provides a reasonable basis for
their opinion, and that in their opinion such consolidated financial
statements present fairly, in all material respects, the consolidated
financial position of the Borrower and its consolidated subsidiaries as
at the end of such fiscal year and the consolidated results of their
operations and cash flows for such fiscal year in conformity with
generally accepted accounting principles, or (ii) contain such
statements as are customarily included in unqualified reports of
independent accountants in conformity with the recommendations and
requirements of the American Institute of Certified Public Accountants
(or any successor organization).
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, the
unaudited condensed consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such quarterly period and
the related unaudited condensed consolidated statements of income and
of cash flows for such quarterly period, and setting forth, in the case
of such unaudited consolidated statements of income and of cash flows,
comparative figures for the related periods in the prior fiscal year,
and which consolidated financial statements shall be certified on
behalf of the Borrower by the Chief Financial Officer or other
Authorized Officer of the Borrower, subject to changes resulting from
normal year-end audit adjustments.
(c) OFFICER'S COMPLIANCE CERTIFICATES. At the time of the
delivery of the financial statements provided for in sections 8.1(a)
and (b), a certificate on behalf of the Borrower of the Chief Financial
Officer or other Authorized Officer of the Borrower to the effect that,
to the best knowledge of the Borrower, no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall set forth the
calculations required to determine the Borrower's ratio of Consolidated
Net Debt to Consolidated Total Capital and establish compliance with
the provisions of sections 9.4(c), 9.5 and 9.6 of this Agreement.
(d) NOTICE OF DEFAULT AND CERTAIN LITIGATION MATTERS.
Promptly, and in any event within three Business Days, in the case of
clause (i) below, or five Business Days, in the case of clause (ii)
below, after the Borrower or any of its Subsidiaries obtains knowledge
thereof, notice of
(i) the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what
action the Borrower proposes to take with respect thereto, or
(ii) any litigation or governmental or regulatory
investigation or proceeding pending against or involving the
Borrower or any of its Subsidiaries which could reasonably be
expected to
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have a Material Adverse Effect or a material adverse effect on
the ability of the Borrower to perform its obligations
hereunder or under any other Credit Document.
(E) ERISA. Promptly, and in any event within 10 days after the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
of the occurrence of any of the following events or circumstances that
has, or could (in the Borrower's reasonable judgment) reasonably be
expected to, have a Material Adverse Effect, the Borrower will provide
notice thereof to the Lenders:
(i) that a Reportable Event has occurred with respect
to any Plan;
(ii) the institution of any steps by the Borrower,
any ERISA Affiliate, the PBGC or any other person to terminate
any Plan;
(iii) the institution of any steps by the Borrower or
any ERISA Affiliate to withdraw from any Plan;
(iv) a non-exempt "prohibited transaction" within the
meaning of section 406 of ERISA in connection with any Plan;
(v) the institution of any steps by the Borrower or
any Subsidiary to withdraw from any Multiemployer Plan or
Multiple Employer Plan, if such withdrawal could result in
withdrawal liability (as described in Part 1 of Subtitle E of
Title IV of ERISA) in excess of $5,000,000;
(vi) that a Plan has an Unfunded Current Liability
exceeding $5,000,000;
(vii) any material increase in the contingent
liability of the Borrower or any Subsidiary with respect to
any post-retirement welfare liability; or
(viii) the taking of any action by, or the
threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with
respect to any of the foregoing.
Any such notice shall set forth the full details as to such occurrence
and the action, if any, that the Borrower, such Subsidiary or such
ERISA Affiliate is required or proposes to take with respect thereto:
(f) ENVIRONMENTAL MATTERS. Promptly upon, and in any event
within 10 Business Days after, an officer of the Borrower obtains
actual knowledge thereof, notice of any of the following environmental
matters which has, or could (in the Borrower's reasonable judgment)
reasonably be expected to, have a Material Adverse Effect:
(i) any pending or threatened (in writing)
Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property owned or operated by the
Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property
owned, leased or operated by the Borrower or any of its
Subsidiaries that could reasonably be expected to cause such
Real Property to be subject to any material restrictions on
the ownership, occupancy, use or transferability by the
Borrower or any of its Subsidiaries of such Real Property
under any Environmental Law; and
(iii) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency.
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All such notices shall describe in reasonable detail the nature of the
Environmental Claim or other matter and the Borrower's or such
Subsidiary's proposed response thereto.
(g) SEC REPORTS AND REGISTRATION STATEMENTS. Promptly upon
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and annual,
quarterly or current reports that the Borrower or any of its
Subsidiaries files with the SEC.
(h) OTHER INFORMATION. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the
Borrower or any of its Subsidiaries as any Lender may reasonably
request from time to time.
8.2. BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will cause
each of its Subsidiaries to, (i) keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Borrower or such Subsidiaries, as the case may
be, in accordance with GAAP, in the case of the Borrower, or which are
reconcilable to a GAAP presentation, in the case of any Subsidiary; and (ii)
permit, upon at least five Business Days' notice to the Chief Financial Officer
or any other Authorized Officer of the Borrower, officers and designated
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of the properties or assets of the Borrower and any of its
Subsidiaries in whomsoever's possession (but only to the extent the Borrower or
such Subsidiary has the right to do so to the extent in the possession of
another person), to examine the books of account of the Borrower and any of its
Subsidiaries, and to make copies thereof and take extracts therefrom, and to
discuss the affairs, finances and accounts of the Borrower and of any of its
Subsidiaries with, and be advised as to the same by, its and their officers and
independent accountants and independent actuaries, if any, all at such
reasonable times and intervals and to such reasonable extent as the
Administrative Agent or any of the Lenders may request.
8.3. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, (i) maintain insurance coverage by such insurers and in such
forms and amounts and against such risks (taking into account deductible
provisions and provisions for self-insurance) as are either generally consistent
with the insurance coverage maintained by the Borrower and its Subsidiaries at
the date hereof, or are consistent with the insurance practices and policies of
substantial industrial companies similarly situated, and (ii) forthwith upon any
Lender's written request, furnish to such Lender such information about such
insurance as such Lender may from time to time reasonably request, which
information shall be prepared in form and detail satisfactory to such Lender and
certified by an Authorized Officer of the Borrower.
8.4. PAYMENT OF TAXES AND CLAIMS. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries; PROVIDED that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP.
8.5. CORPORATE FRANCHISES. The Borrower will do, and will cause each of
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate or other organizational
existence, rights, authority and franchises, PROVIDED that nothing in this
section 8.5 shall be deemed to prohibit (i) any transaction permitted by section
9.2; (ii) the termination of existence of any Subsidiary if (A) the Borrower
determines that such termination is in its best interest and (B) such
termination is not adverse in any material respect to the Lenders; or (iii) the
loss of any rights, authorities or franchises if the loss thereof, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
8.6. GOOD REPAIR. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in
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such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements, thereto, to
the extent and in the manner customary for companies in similar businesses.
8.7. COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause
each of its Subsidiaries to, comply, in all material respects, with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, other than those (i)
being contested in good faith by appropriate proceedings, as to which adequate
reserves are established to the extent required under GAAP, and (ii) the
noncompliance with which would not have, and which would not be reasonably
expected to have, a Material Adverse Effect or a material adverse effect on the
ability of the Borrower to perform its obligations under any Credit Document.
8.8. COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limitation of the
covenants contained in section 8.7 hereof, if required to do so under any
applicable order of any governmental agency, the Borrower will undertake, and
cause each of its Subsidiaries to undertake, any clean up, removal, remedial or
other action necessary to remove and clean up any Hazardous Materials from any
Real Property owned, leased or operated by the Borrower or any of its
Subsidiaries in accordance with, in all material respects, the requirements of
all applicable Environmental Laws and in accordance with, in all material
respects, such orders of all governmental authorities, except (i) to the extent
that the Borrower or such Subsidiary is contesting such order in good faith and
by appropriate proceedings and for which adequate reserves have been established
to the extent required by GAAP, or (ii) for such noncompliance as would not
have, and which would not be reasonably expected to have, a Material Adverse
Effect or a material adverse effect on the ability of the Borrower to perform
its obligations under any Credit Document.
8.9. FISCAL YEARS, FISCAL QUARTERS. The Borrower will, for consolidated
financial reporting purposes, continue to use the Sunday nearest to December 31
as the end of its fiscal year and the 13 or 14 week periods determined in
accordance with its current accounting policies as the end of its first three
fiscal quarters. If the Borrower shall change any of its Subsidiaries' fiscal
years or fiscal quarters (other than the fiscal year or fiscal quarters of a
person which becomes a Subsidiary, made at the time such person becomes a
Subsidiary, to conform to the Borrower's fiscal year and fiscal quarters or to
conform to the fiscal year or fiscal quarters which the Borrower generally
utilizes for its Subsidiaries), the Borrower will promptly, and in any event
within 30 days following any such change, deliver a notice to the Administrative
Agent and the Lenders describing such change and any material accounting entries
made in connection therewith and stating whether such change will have any
impact upon any financial computations to be made hereunder, and if any such
impact is foreseen, describing in reasonable detail the nature and extent of
such impact. If the Required Lenders determine that any such change will have
any impact upon any financial computations to be made hereunder which is adverse
to the Lenders, the Borrower will, if so requested by the Administrative Agent,
enter into an amendment to this Agreement, in form and substance satisfactory to
the Administrative Agent and the Required Lenders, modifying any of the
financial covenants or related provisions hereof in such manner as the Required
Lenders determine is necessary to eliminate such adverse effect.
8.10. HEDGE AGREEMENTS, ETC. In the event the Borrower or any of its
Subsidiaries desires to enter into any Hedge Agreement in order to provide
protection to the Borrower or any such Subsidiary from fluctuations and other
changes in interest rates and currency exchange rates, the Borrower or such
Subsidiary will be free to do so, PROVIDED that the Borrower will not, and will
not permit any Subsidiary to, enter into a Hedge Agreement which exposes the
Borrower or its Subsidiaries to predominantly speculative risks unrelated to the
amount of assets, Indebtedness or other liabilities intended to be subject to
coverage on a notional basis under all such Hedge Agreements.
8.11. MOST FAVORED COVENANT STATUS. Should the Borrower at any time
after the Effective Date, issue or guarantee any unsecured Indebtedness
denominated in U.S. dollars for money borrowed or represented by bonds, notes,
debentures or similar securities in an aggregate amount exceeding $50,000,000,
to any lender or group of lenders acting in concert with one another, or one or
more institutional investors, pursuant to a loan agreement, credit agreement,
note purchase agreement, indenture, guaranty or other similar instrument, which
agreement, indenture, guaranty or instrument, includes affirmative or negative
business or financial covenants (or any events of default or other type of
restriction which would have the practical effect of any affirmative or negative
business or financial
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covenant, including, without limitation, any "put" or mandatory prepayment of
such Indebtedness upon the occurrence of a "change of control") which are
applicable to the Borrower, other than those set forth herein or in any of the
other Credit Documents, the Borrower shall promptly so notify the Administrative
Agent and the Lenders and, if the Administrative Agent shall so request by
written notice to the Borrower (after a determination has been made by the
Required Lenders that any of the above-referenced documents or instruments
contain any such provisions, which either individually or in the aggregate, are
more favorable to the holders of such unsecured Indebtedness than any of the
provisions set forth herein), the Borrower, the Administrative Agent and the
Lenders shall promptly amend this Agreement to incorporate some or all of such
provisions, in the discretion of the Administrative Agent and the Required
Lenders, into this Agreement and, to the extent necessary and reasonably
desirable to the Administrative Agent and the Required Lenders, into any of the
other Credit Documents, all at the election of the Administrative Agent and the
Required Lenders.
8.12. SENIOR DEBT. The Borrower will at all times ensure that (a) the
claims of the Lenders in respect of the Obligations of the Borrower will not be
subordinate to, and will in all respects at least rank PARI PASSU with, the
claims of every other senior unsecured creditor of the Borrower, and (b) any
Indebtedness subordinated in any manner to the claims of any other senior
unsecured creditor of the Borrower will be subordinated in like manner to such
claims of the Lenders.
SECTION 9. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder are
paid in full:
9.1. CHANGES IN BUSINESS. Neither the Borrower nor any of its
Subsidiaries will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Borrower and its Subsidiaries, would be substantially changed from the
general nature of the business engaged in by the Borrower and its Subsidiaries
on the date hereof, after giving effect to the completion of the Uarco
Acquisition.
9.2. CONSOLIDATION, MERGER, OR SALE OF ASSETS, ETC. The Borrower will
not, and will not permit any Subsidiary to, wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation, or sell,
transfer or otherwise dispose of all or substantially all of the property and
assets of the Borrower and its Subsidiaries (in one transaction or a series of
related transactions), or agree to do any of the foregoing at any future time,
EXCEPT that
(a) the Borrower may consolidate or merge with any other
corporation, or sell, transfer or otherwise dispose of all or
substantially all of the property and assets of the Borrower and its
Subsidiaries to any person, if (i) the surviving, continuing or
resulting corporation of such merger or consolidation (if other than
the Borrower) or the acquiring person unconditionally assumes the
obligations of the Borrower under the Credit Documents pursuant to an
assumption agreement in form and substance reasonably satisfactory to
the Required Lenders, (ii) no Event of Default has occurred and is
continuing or would result therefrom, and (iii) no Change of Control
would be occasioned thereby; and
(b) if no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (i) the merger, consolidation
or amalgamation of any Subsidiary of the Borrower with or into the
Borrower, another Subsidiary or any other person, and the sale,
transfer or other disposition by any Subsidiary of all or substantially
all of its property and assets, shall be permitted, UNLESS such
transaction would represent the sale, transfer or other disposition
(including by merger of a Subsidiary) of all or substantially all of
the property and assets of the Borrower and its Subsidiaries, or would
result in a Change of Control, and (ii) the liquidation or dissolution
of any Subsidiary shall also be permitted.
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9.3. LIENS. The Borrower will not, and will not permit any of its
Domestic Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
or with respect to any property or assets of any kind (real or personal,
tangible or intangible) of the Borrower or any such Domestic Subsidiary whether
now owned or hereafter acquired, or sell any such property or assets subject to
an understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with or
without recourse to the Borrower or any of its Subsidiaries, other than for
purposes of collection of delinquent accounts in the ordinary course of
business) or assign any right to receive income, or file or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute, EXCEPT that the foregoing restrictions
shall not apply to:
(a) STANDARD PERMITTED LIENS: the Standard Permitted Liens;
(b) EXISTING LIENS, ETC.: Liens (i) in existence on the
Initial Borrowing Date which are listed, and the Indebtedness secured
thereby and the property subject thereto on the Initial Borrowing Date
described, in Annex IV, or (ii) arising out of the refinancing,
extension, renewal or refunding of any Indebtedness secured by any such
Liens, PROVIDED that the principal amount of such Indebtedness is not
increased and such Indebtedness is not secured by any additional
assets; and
(c) PURCHASE MONEY LIENS AND LIENS ON ACQUIRED PROPERTIES:
Liens which
(i) are placed upon equipment or machinery or
improvements to Real Property (including the associated Real
Property) used in the ordinary course of business of the
Borrower or any Subsidiary at the time of (or within 180 days
after) the acquisition of such equipment or machinery or the
completion of such improvements by the Borrower or any such
Subsidiary to secure Indebtedness incurred to pay or finance
all or a portion of the purchase price or other cost thereof,
PROVIDED that the Lien encumbering the equipment or machinery
so acquired or the Real Property so improved does not encumber
any other asset of the Borrower or any such Subsidiary; or
(ii) are existing on property or other assets at the
time acquired by the Borrower or any Subsidiary or on assets
of a person at the time such person first becomes a Subsidiary
of the Borrower; PROVIDED that (A) any such Liens were not
created at the time of or in contemplation of the acquisition
of such assets or person by the Borrower or any of its
Subsidiaries; (B) in the case of any such acquisition of a
person, any such Lien attaches only to the property and assets
of such person; and (C) in the case of any such acquisition of
property or assets by the Borrower or any Subsidiary, any such
Lien attaches only to the property and assets so acquired and
not to any other property or assets of the Borrower or any
Subsidiary;
PROVIDED that (1) the Indebtedness secured by any such Lien does not
exceed 100% of the fair market value of the property and assets to
which such Lien attaches, determined at the time of the acquisition or
improvement of such property or asset or the time at which such person
becomes a Subsidiary of the Borrower (except in the circumstances
described in clause (ii) above to the extent such Liens constituted
customary purchase money Liens at the time of incurrence and were
entered into in the ordinary course of business), and (2) the
Indebtedness secured thereby is permitted by section 9.4(c).
9.4. INDEBTEDNESS. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Borrower or any of its Subsidiaries, EXCEPT:
(a) CREDIT DOCUMENTS: Indebtedness incurred under this
Agreement and the other Credit
Documents;
(b) EXISTING INDEBTEDNESS: Existing Indebtedness (including
Indebtedness incurred pursuant to commitments and lines of credit
described on Annex III); and any refinancing, extension, renewal or
refunding of any such Existing Indebtedness not involving an increase
in the principal amount thereof or a reduction of more than 10% in the
remaining weighted average life to maturity thereof (computed in
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accordance with standard financial practice); PROVIDED that any
Existing Indebtedness identified in Annex III as being intended to be
refinanced by Loans incurred hereunder may not be otherwise refinanced;
(c) PRIORITY DEBT: the following Indebtedness (collectively,
"PRIORITY DEBT"):
(i) Indebtedness consisting of Capital Lease
Obligations of the Borrower and its Subsidiaries,
(ii) Indebtedness secured by a Lien on any property
of the Borrower or any Subsidiary, and
(iii) other Indebtedness of Subsidiaries of the
Borrower (exclusive of Indebtedness owed pursuant to any of
the Credit Documents or to the Borrower or a Wholly-Owned
Subsidiary of the Borrower);
PROVIDED that (A) at the time of any incurrence thereof after the date
hereof, and after giving effect thereto, no Event of Default shall have
occurred and be continuing or would result therefrom; and (B) the
aggregate outstanding principal amount (using Capitalized Lease
Obligations in lieu of principal amount, in the case of any Capital
Lease) of Priority Debt permitted by this clause (c) shall not exceed
an amount equal to 20% of the Borrower's Consolidated Net Worth as of
the end of the most recent fiscal period for which financial statements
have been delivered to the Lenders hereunder;
(d) INTERCOMPANY DEBT: Indebtedness of the Borrower to any of
its Subsidiaries, and Indebtedness of any of the Borrower's
Subsidiaries to the Borrower or to another Subsidiary of the Borrower;
and
(e) ADDITIONAL UNSECURED DEBT AND GUARANTY OBLIGATIONS:
additional unsecured Indebtedness of the Borrower, and additional
unsecured Guaranty Obligations of the Borrower or any of its
Subsidiaries, to the extent not otherwise permitted pursuant to the
foregoing clauses, PROVIDED that at the time of incurrence thereof, and
after giving effect thereto, (i) the Borrower would be in compliance
with section 9.5; and (ii) no Event of Default shall have occurred and
be continuing or would result therefrom.
9.5. CONSOLIDATED DEBT/CONSOLIDATED TOTAL CAPITAL RATIO. The Borrower
will not at any time permit the ratio of (i) the amount of its Consolidated Debt
at such time to (ii) its Consolidated Total Capital as of the end of the most
recent fiscal period for which financial statements have been delivered to the
Lenders hereunder, expressed as a percentage, to exceed 50.00% at any time.
9.6. INTEREST COVERAGE RATIO. The Borrower will not permit its Interest
Coverage Ratio for any Testing Period to be less than 3.00 to 1.00.
9.7. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case of the Borrower, any Subsidiary, and
in the case of a Subsidiary, the Borrower or another Subsidiary) other than in
the ordinary course of business of and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than would obtain in
a comparable arm's-length transaction with a person other than an Affiliate,
EXCEPT (i) sales of goods to an Affiliate for use or distribution outside the
United States which in the good faith judgment of the Borrower complies with any
applicable legal requirements of the Code, or (ii) agreements and transactions
with and payments to officers, directors and shareholders which are either (A)
entered into in the ordinary course of business and not prohibited by any of the
provisions of this Agreement, or (B) entered into outside the ordinary course of
business, approved by the directors or shareholders of the Borrower, and not
prohibited by any of the provisions of this Agreement.
9.8. PLAN TERMINATIONS, MINIMUM FUNDING, ETC. The Borrower will not,
and will not permit any ERISA Affiliate to, (i) terminate any Plan or plans so
as to result in liability of the Borrower or any ERISA Affiliate
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to the PBGC in excess of $15,000,000 in the aggregate, (ii) permit to exist one
or more events or conditions which reasonably present a material risk of the
termination by the PBGC of any Plan or Plans with respect to which the Borrower
or any ERISA Affiliate would, in the event of such termination, incur liability
to the PBGC in excess of $15,000,000 in the aggregate, or (iii) fail to comply
with the minimum funding standards of ERISA and the Code with respect to any
Plan.
SECTION 10. EVENTS OF DEFAULT.
10.1. EVENTS OF DEFAULT. Upon the occurrence of any of the following
specified events (each an "EVENT OF DEFAULT"):
(a) PAYMENTS: the Borrower shall (i) default in the payment
when due of any principal of the Loans or any reimbursement obligation
in respect of any Unpaid Drawing; or (ii) default, and such default
shall continue for five or more days, in the payment when due of any
interest on the Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document; or
(b) REPRESENTATIONS, ETC.: any representation, warranty or
statement made by the Borrower herein or in any other Credit Document
or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
(c) CERTAIN NEGATIVE COVENANTS: the Borrower shall default in
the due performance or observance by it of any term, covenant or
agreement contained in sections 9.2 through 9.6, inclusive, of this
Agreement; or
(d) OTHER COVENANTS: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement
contained in this Agreement or any other Credit Document, other than
those referred to in section 10.1(a) or (b) or (c) above, and such
default is not remedied within 30 days after the earlier of (i) an
officer of the Borrower obtaining actual knowledge of such default and
(ii) the Borrower receiving written notice of such default from the
Administrative Agent or the Required Lenders (any such notice to be
identified as a "notice of default " and to refer specifically to this
paragraph); or
(e) CROSS DEFAULT UNDER OTHER AGREEMENTS: the Borrower or any
of its Subsidiaries shall (i) default in any payment with respect to
any Indebtedness (other than the Obligations) owed to any Lender, or
having an unpaid principal amount of $25,000,000 or greater, and such
default shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness,
or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto (and
all grace periods applicable to such observance, performance or
condition shall have expired), or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable, or shall be
required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof); or
(f) JUDGMENTS: one or more judgments or decrees shall be
entered against the Borrower and/or any of its Subsidiaries involving a
liability (other than a liability covered by insurance, as to which the
carrier has adequate claims paying ability and has not reserved its
rights) of $25,000,000 or more in the aggregate for all such judgments
and decrees for the Borrower and its Subsidiaries) and any such
judgments or decrees shall not have been vacated, discharged or stayed
or bonded pending appeal within 30 days (or such longer period, not in
excess of 60 days, during which enforcement thereof, and the filing of
any judgment lien, is effectively stayed or prohibited) from the entry
thereof; or
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(g) BANKRUPTCY, ETC.: the Borrower or any of its Material
Subsidiaries shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy," as now or
hereafter in effect, or any successor thereto (the "BANKRUPTCY CODE");
or an involuntary case is commenced against the Borrower or any of its
Material Subsidiaries and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed
for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Material Subsidiaries; or the Borrower or
any of its Material Subsidiaries commences (including by way of
applying for or consenting to the appointment of, or the taking of
possession by, a rehabilitator, receiver, custodian, trustee,
conservator or liquidator (collectively, a "CONSERVATOR") of itself or
all or any substantial portion of its property) any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency, liquidation, rehabilitation,
conservatorship or similar law of any jurisdiction whether now or
hereafter in effect relating to the Borrower or any of its Material
Subsidiaries; or any such proceeding is commenced against the Borrower
or any of its Material Subsidiaries to the extent such proceeding is
consented by such person or remains undismissed for a period of 60
days; or the Borrower or any of its Material Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Borrower
or any of its Material Subsidiaries suffers any appointment of any
conservator or the like for it or any substantial part of its property
which continues undischarged or unstayed for a period of 60 days; or
the Borrower or any of its Material Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate (or similar
organizational) action is taken by the Borrower or any of its Material
Subsidiaries for the purpose of effecting any of the foregoing; or
(h) ERISA: any of the events described in clauses (i) through
(viii) of section 8.1(e) shall have occurred; or there shall result
from any such event or events the imposition of a lien, the granting of
a security interest, or a liability or a material risk of incurring a
liability; and in any such event or events or any such lien, security
interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Lenders, has had, or could reasonably be
expected to have, a Material Adverse Effect.
10.2. ACCELERATION, ETC. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent or any
Lender to enforce its claims against the Borrower, except as otherwise
specifically provided for in this Agreement (PROVIDED that, if an Event of
Default specified in section 10.1(g) shall occur with respect to the Borrower,
the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately without any other notice of any kind; and (ii) declare the
principal of and any accrued interest in respect of all Loans and all other
obligations owing hereunder and under the other Credit Documents to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower.
10.3. APPLICATION OF LIQUIDATION PROCEEDS. All monies received by the
Administrative Agent or any Lender from the exercise of remedies hereunder or
under the other Credit Documents or under any other documents relating to this
Agreement shall, unless otherwise required by the terms of the other Credit
Documents or by applicable law, be applied as follows:
(i) FIRST, to the payment of all expenses (to the extent not
paid by the Borrower) incurred by the Administrative Agent and the
Lenders in connection with the exercise of such remedies, including,
without limitation, all reasonable costs and expenses of collection,
attorneys' fees, court costs and any foreclosure expenses;
(ii) SECOND, to the payment PRO RATA of interest then accrued
on the outstanding Loans;
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(iii) THIRD, to the payment PRO RATA of any fees then accrued
and payable to the Administrative Agent or any Lender under this
Agreement in respect of the Loans;
(iv) FOURTH, to the payment PRO RATA of the principal balance
then owing on the outstanding Loans;
(v) FIFTH, to the payment PRO RATA of all other amounts owed
by the Borrower to the Administrative Agent or any Lender under this
Agreement or any other Credit Document, and if such proceeds are
insufficient to pay such amounts in full, to the payment of such
amounts PRO RATA; and
(vi) FINALLY, any remaining surplus after all of the
Obligations have been paid in full, to the Borrower or to whomsoever
shall be lawfully entitled thereto.
SECTION 11. THE ADMINISTRATIVE AGENT.
11.1. APPOINTMENT. Each Lender hereby irrevocably designates and
appoints KeyBank as Administrative Agent to act as specified herein and in the
other Credit Documents, and each such Lender hereby irrevocably authorizes
KeyBank as the Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent agrees to act as such upon the express conditions
contained in this section 11. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in the other
Credit Documents, nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
The provisions of this section 11 are solely for the benefit of the
Administrative Agent, and the Lenders, and the Borrower and its Subsidiaries
shall not have any rights as a third party beneficiary of any of the provisions
hereof. In performing its functions and duties under this Agreement, the
Administrative Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation or relationship of
agency or trust with or for the Borrower or any of its Subsidiaries.
11.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
11.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or of its Subsidiaries or any
of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for any failure
of the Borrower or any Subsidiary of the Borrower or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower or any of its Subsidiaries. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the
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Borrower or any of its Subsidiaries to the Administrative Agent or any Lender or
be required to ascertain or inquire as to the performance or observance of any
of the terms, conditions, provisions, covenants or agreements contained herein
or therein or as to the use of the proceeds of the Loans or of the existence or
possible existence of any Default or Event of Default.
11.4. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good faith, 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, without limitation,
counsel to the Borrower or any of its Subsidiaries), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Lenders (or
all of the Lenders, as to any matter which, pursuant to section 12.12, can only
be effectuated with the consent of all Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
11.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, PROVIDED that unless and until the
Administrative Agent shall have received such directions, the Administrative
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 in the best interests of the Lenders.
11.6. NON-RELIANCE. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower and its Subsidiaries and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent, or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrower and its Subsidiaries.
The Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, assets, property, financial and other conditions, prospects or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective General Revolving Loans and Unutilized General Revolving Commitments
(without giving effect to any Competitive Bid Reduction), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, reasonable expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Obligations) be
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imposed on, incurred by or asserted against the Administrative Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or omitted to be taken
by the Administrative Agent under or in connection with any of the foregoing,
but only to the extent that any of the foregoing is not paid by the Borrower,
PROVIDED that no Lender shall be liable to the Administrative Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the Administrative Agent's gross negligence or
willful misconduct. If any indemnity furnished to the Administrative Agent for
any purpose shall, in the opinion of the Administrative Agent, be insufficient
or become impaired, the Administrative Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished. The agreements in this section 11.7 shall
survive the payment of all Obligations.
11.8. THE ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
and their Affiliates as though not acting as Administrative Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
11.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as the Administrative Agent upon 20 days' notice to the Lenders and the
Borrower. The Required Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders subject to prior approval by the Borrowers
(such approval not to be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning Administrative
Agent's rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. After the retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions of this section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.
11.10. OTHER AGENTS. Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Managing Agent, Manager or any other
corresponding title, other than "Administrative Agent", shall have no right,
power, obligation, liability, responsibility or duty under this Agreement or any
other Credit Document except those applicable to all Lenders as such. Each
Lender acknowledges that it has not relied, and will not rely, on any Lender so
identified in deciding to enter into this Agreement or in taking or not taking
any action hereunder.
SECTION 12. MISCELLANEOUS.
12.1. PAYMENT OF EXPENSES ETC. The Borrower agrees to:
(a) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent and of each of the Lenders in connection with the
negotiation, preparation, execution and delivery of the Credit
Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto, including, without
limitation, the reasonable fees and disbursements of Jones, Day, Reavis
& Pogue, special counsel to the Administrative Agent);
(b) pay all reasonable out-of-pocket costs and expenses of
KeyBank in connection with the syndication on or prior to the
Syndication Date of portions of its General Revolving Loans and General
Revolving Commitment to Eligible Transferees (including, without
limitation, the reasonable fees and disbursements of special counsel
for KeyBank and any allocated costs of its internal counsel);
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(c) pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent and of each of the Lenders in connection with the
enforcement of the Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees
and disbursements of any special and/or any local counsel for the
Administrative Agent and/or for any of the Lenders and any allocated
costs of internal counsel for the Administrative Agent or any of the
Lenders);
(d) without limitation or duplication of any of the foregoing,
in the event of the bankruptcy, insolvency, rehabilitation or other
similar proceeding in respect of the Borrower or any of its
Subsidiaries, pay all costs of collection and defense, including
reasonable attorneys' fees in connection therewith and in connection
with any appellate proceeding or post-judgment action involved therein,
which shall be due and payable together with all required service or
use taxes;
(e) pay and hold each of the Lenders harmless from and against
any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save each of the Lenders harmless
from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and
(f) indemnify each Lender, its officers, directors, employees,
representatives and agents (collectively, the "INDEMNITEES") from and
hold each of them harmless against any and all losses, liabilities,
claims, damages or expenses reasonably incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason
of:
(i) any investigation, litigation or other
proceeding (whether or not any Lender is a party thereto)
related to the entering into and/or performance of any Credit
Document or the use of the proceeds of any Loans hereunder or
the consummation of any transactions contemplated in any
Credit Document, other than any such investigation, litigation
or proceeding arising out of transactions solely between any
of the Lenders or the Administrative Agent, transactions
solely involving the assignment by a Lender of all or a
portion of its Loans and Commitment, or the granting of
participations therein, as provided in this Agreement, or
arising solely out of any examination of a Lender by any
regulatory authority having jurisdiction over it, or
(ii) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned, leased or at
any time operated by the Borrower or any of its Subsidiaries,
the release, generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or
not owned or operated by the Borrower or any of its
Subsidiaries, if the Borrower or any such Subsidiary could
have or is alleged to have any responsibility in respect
thereof, the non-compliance of any Real Property with foreign,
federal, state and local laws, regulations and ordinances
(including applicable permits thereunder) applicable to any
such Real Property, or any Environmental Claim asserted
against the Borrower or any of its Subsidiaries, in respect of
any such Real Property,
including, in each case, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred
by reason of the gross negligence or willful misconduct of the person
to be indemnified or of any other Indemnitee who is such person or an
Affiliate of such person). To the extent that the undertaking to
indemnify, pay or hold harmless any person set forth in the preceding
sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which
is permissible under applicable law.
12.2. RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other person, any
such notice being hereby expressly waived, to set off and to
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appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to such Lender under this Agreement
or under any of the other Credit Documents, including, without limitation, all
interests in Obligations the Borrower purchased by such Lender pursuant to
section 12.4(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
12.3. NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered, (a) if to
the Borrower, at 600 Albany Street, Dayton, Ohio 45401, attention: Chief
Financial Officer (facsimile: (937) 443-1205); (b) if to any Lender at its
address specified for such Lender on Annex I hereto; (c) if to the
Administrative Agent, at its Notice Address; or (d) at such other address as
shall be designated by any party in a written notice to the other parties
hereto. All such notices and communications shall be mailed, telegraphed,
telexed, telecopied, or cabled or sent by overnight courier, and shall be
effective when received.
12.4. BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, PROVIDED that the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders, and, PROVIDED, FURTHER, that any assignment by a
Lender of its rights and obligations hereunder shall be effected in accordance
with section 12.4(b) and/or 12.4(c), as applicable. Notwithstanding the
foregoing, each Lender may at any time grant participations in any of its rights
hereunder or under any of the Notes to another financial institution or to any
other "accredited investor" (as defined in SEC Regulation D), PROVIDED that in
the case of any such participation, (i) the participant shall not have any
rights under this Agreement or any of the other Credit Documents, including
rights of consent, approval or waiver (the participant's rights against such
Lender in respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the participant relating thereto), (ii) such
Lender's obligations under this Agreement (including, without limitation, its
Commitments hereunder) shall remain unchanged, (iii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement and (v) the Borrower, the Administrative Agent, and
the other Lenders shall continue to deal solely and directly with the selling
Lender in connection with such Lender's rights and obligations under this
Agreement, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation, except that the participant
shall be entitled to the benefits of sections 2.10 and 2.11 of this Agreement to
the extent that such Lender would be entitled to such benefits if the
participation had not been entered into or sold, and, PROVIDED FURTHER, that no
Lender shall transfer, grant or sell any participation under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any other Credit Document except to the extent such amendment or
waiver would (x) extend the final scheduled maturity of the Loans in which such
participant is participating (it being understood that any waiver of the making
of any mandatory prepayment of the Loans shall not constitute an extension of
the final maturity date thereof), or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates or Fees), or reduce
the principal amount thereof, or increase such participant's participating
interest in any Commitment over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of any mandatory
prepayment or a mandatory reduction in the Total Commitment (or any portion
thereof), or a mandatory prepayment, shall not constitute a change in the terms
of any Commitment), or (y) consent to the assignment or transfer by the Borrower
of any of its rights and obligations under this Agreement.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
fixed portion of its Loans and/or Commitments, which assignment does not have to
be PRO RATA among the Facilities, and its rights and obligations hereunder, to
another Lender that is not a Defaulting Lender, or to an Affiliate of any Lender
(including itself) and which is not a Defaulting Lender and which is a
commercial bank, financial institution or other "accredited investor" (as
defined in SEC Regulation D), and (y) any Lender may assign all, or if less than
all, a fixed portion, equal to at least $10,000,000 in the aggregate for the
assigning Lender or assigning Lenders in the case of assignments of General
51
<PAGE> 57
Revolving Loans and/or General Revolving Commitments, of its Loans and/or
Commitments and its rights and obligations hereunder, which assignment does not
have to be PRO RATA among the Facilities, to one or more Eligible Transferees,
each of which assignees shall become a party to this Agreement as a Lender by
execution of an Assignment Agreement, PROVIDED that, (i) in the case of any
assignment of a portion of the General Revolving Loans and/or General Revolving
Commitments of a Lender, such Lender shall retain a minimum fixed portion
thereof equal to at least $10,000,000, (ii) the Swing Line Lender may only
assign all of its Swing Line Revolving Loans and its entire Swing Line Revolving
Commitment to a single transferee, (iii) at the time of any such assignment
Annex I shall be deemed modified to reflect the Commitments of such new Lender
and of the existing Lenders, (iv) upon surrender of the old Notes, new Notes
will be issued, at the Borrower's expense, to such new Lender and to the
assigning Lender, such new Notes to be in conformity with the requirements of
section 2.6 (with appropriate modifications) to the extent needed to reflect the
revised Commitments, (v) in the case of clause (y) only, the consent of the
Administrative Agent shall be required in connection with any such assignment
(which consent shall not be unreasonably withheld or delayed), and (vi) the
Administrative Agent shall receive at the time of each such assignment, from the
assigning or assignee Lender, the payment of a non-refundable assignment fee of
$3,500 and, PROVIDED FURTHER, that such transfer or assignment will not be
effective until recorded by the Administrative Agent on the Lender Register
maintained by it as provided herein. To the extent of any assignment pursuant to
this section 12.4(b) the assigning Lender shall be relieved of its obligations
hereunder with respect to its assigned Commitments. At the time of each
assignment pursuant to this section 12.4(b) to a person which is not already a
Lender hereunder and which is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the Administrative
Agent the appropriate Internal Revenue Service Forms described in section 5.5.
To the extent that an assignment of all or any portion of a Lender's Commitment
and related outstanding Obligations pursuant to this section 12.4(b) would, at
the time of such assignment, result in increased costs under section 2.9 from
those being charged by the respective assigning Lender prior to such assignment,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment). Nothing in this section 12.4(b) shall prevent or prohibit any
Lender from pledging its Notes or Loans to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
(c) Notwithstanding the foregoing, each Lender may assign to one or
more banks or other entities any Competitive Bid Note or Notes held by it. In
addition, each Lender (other than the Designated Bidders) may designate one or
more banks or other entities to have a right to make Competitive Bid Loans as a
Lender pursuant to section 2.4; PROVIDED, HOWEVER, that (i) no such Lender shall
be entitled to make more than three such designations, (ii) each such Lender
making one or more of such designations shall retain the right to make
Competitive Bid Loans as a Lender pursuant to section 2.4, (iii) each such
designation shall be to a Designated Bidder and (iv) the parties to each such
designation shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Lender Register, a Designation Agreement. Upon
such execution, delivery, acceptance and recording, from and after the effective
date specified in each Designation Agreement, the designee thereunder shall be a
party hereto with a right to make Competitive Bid Loans as a Lender pursuant to
section 2.4 and the obligations related thereto.
(d) By executing and delivering a Designation Agreement, the Lender
making the designation thereunder and its designee thereunder confirm and agree
with each other and the other parties hereto as follows: (i) such Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower or any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such designee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
section 7.8(a) and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into the
Designation Agreement; (iv) such designee will, independently and without
reliance upon the Administrative Agent, such designating Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such designee confirms that it is a Designated
Bidder; (vi) such designee appoints and authorizes
52
<PAGE> 58
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such designee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(e) Upon its receipt of a Designation Agreement executed by a
designating Lender and a designee representing that it is a Designated Bidder,
the Administrative Agent shall, if such Designation Agreement has been properly
completed, (i) accept such Designation Agreement, (ii) record the information
contained therein in the Lender Register and (iii) give prompt notice thereof to
the Borrower.
(f) Notwithstanding any other provisions of this section 12.4, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(g) Each Lender initially party to this Agreement hereby represents,
and each person that became a Lender pursuant to an assignment permitted by this
section 12.4 will, upon its becoming party to this Agreement, represent that it
is a commercial lender, other financial institution or other "accredited"
investor (as defined in SEC Regulation D) which makes or acquires loans in the
ordinary course of its business and that it will make or acquire Loans for its
own account in the ordinary course of such business, PROVIDED that subject to
the preceding sections 12.4(a) and (b), the disposition of any promissory notes
or other evidences of or interests in Indebtedness held by such Lender shall at
all times be within its exclusive control.
12.5. NO WAIVER: REMEDIES CUMULATIVE. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.6. PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its right to receive
its PRO RATA share thereof) PRO RATA based upon their respective shares, if any,
of the Obligations with respect to which such payment was received. As to any
such payment received by the Administrative Agent prior to 1:00 P.M. (local time
at the Payment Office) in funds which are immediately available on such day, the
Administrative Agent will use all reasonable efforts to distribute such payment
in immediately available funds on the same day to the Lenders as aforesaid.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, PROVIDED that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
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<PAGE> 59
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 12.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
12.7. CALCULATIONS: COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); PROVIDED, that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Loans hereunder and all
computations of Facility Fees and other Fees hereunder shall be made on the
actual number of days elapsed over a year of 360 days.
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO. TO THE FULLEST
EXTENT PERMITTED BY LAW, THE BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE
OF OHIO GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the Court of Common Pleas of Cuyahoga County, Ohio, or of the
United States for the Northern District of Ohio, and, by execution and delivery
of this Agreement, the Borrower hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Borrower hereby further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Borrower at its address for notices pursuant to section
12.3, such service to become effective 30 days after such mailing or at such
earlier time as may be provided under applicable law. Nothing herein shall
affect the right of the Administrative Agent or any Lender to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
12.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. EFFECTIVENESS. This Agreement shall become effective on the date
(the "EFFECTIVE DATE") on which the Borrower and each of the Lenders shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it.
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<PAGE> 60
12.11. HEADINGS DESCRIPTIVE. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. AMENDMENT OR WAIVER. Neither this Agreement nor any terms hereof
or thereof may be changed, waived, discharged or terminated UNLESS such change,
waiver, discharge or termination is in writing signed by the Borrower and the
Required Lenders, PROVIDED that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender)
directly affected thereby, (i) extend any maturity date provided for herein
(including any extension of any maturity date to be effected in accordance with
section 4.3 hereof) applicable to a Loan or a Commitment under a Facility (it
being understood that any waiver of the making of any mandatory prepayment of
the Loans shall not constitute an extension of the maturity thereof), (ii)
reduce the rate or extend the time of payment of interest or Fees (other than as
a result of waiving the applicability of any post-default increase in interest
rates or Fees), (iii) reduce the principal amount thereof, or increase any
Commitment of any Lender over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of any mandatory
prepayment or a mandatory reduction in the Total Commitment (or any component
thereof) shall not constitute a change in the terms of any Commitment of any
Lender), (iv) release the Borrower from any obligations as a guarantor of its
Subsidiaries' obligations under any Credit Document, (v) change the definition
of the term "Change of Control" or any of the provisions of section 5.2(d) which
are applicable upon a Change of Control, (vi) change or waive the provisions of
section 7.7(a) which would have the effect of depriving such Lender of its
rights with respect to "hostile acquisitions" as contemplated by such section,
(vii) amend, modify or waive any provision of this section 12.12, or section
11.7, 12.1, 12.4, 12.6 or 12.7(b), or any other provision of any of the Credit
Documents pursuant to which the consent or approval of all Lenders is by the
terms of such provision explicitly required, (viii) reduce the percentage
specified in, or otherwise modify, the definition of Required Lenders, or (ix)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. No provision of section 11 may be amended
without the consent of the Administrative Agent.
12.13. SURVIVAL OF INDEMNITIES. All indemnities set forth herein
including, without limitation, in section 2.10, 2.11, 11.7 or 12.1 shall survive
the execution and delivery of this Agreement and the making and repayment of
Loans.
12.14. DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, PROVIDED that the Borrower shall not be responsible for costs arising
under section 2.9 resulting from any such transfer (other than a transfer
pursuant to section 2.12) to the extent not otherwise applicable to such Lender
prior to such transfer.
12.15. CONFIDENTIALITY. Each Lender shall hold all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as such by the Borrower in accordance with its customary
procedure for handling confidential information of this nature and in accordance
with safe and sound banking practices. Notwithstanding the foregoing, any Lender
may in any event may make disclosures of, and furnish copies of such information
(i) to another Lender; (ii) when reasonably required by any BONA FIDE transferee
or participant in connection with the contemplated transfer of any Loans or
Commitment or participation therein (PROVIDED that each such prospective
transferee and/or participant shall execute an agreement for the benefit of the
Borrower with such prospective transferor Lender and/or participant containing
provisions substantially identical to those contained in this section 12.15);
(iii) to its parent corporation or corporations, and to its and their auditors
and attorneys; and (iv) as required or requested by any governmental agency or
representative thereof or pursuant to legal process, PROVIDED that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify the Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with an examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information. In
no event shall any Lender be obligated or required to return any materials
furnished by or on behalf of the Borrower or any of its Subsidiaries. The
Borrower hereby agrees that the failure of a Lender to comply with the
provisions of this section 12.15 shall not relieve the Borrower of any of the
obligations to such Lender under this Agreement and the other Credit Documents.
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<PAGE> 61
12.16. LENDER REGISTER. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.16, to retain a copy of each Assignment Agreement and Designation Agreement
delivered to and accepted by it and to maintain a register (the "LENDER
REGISTER") on or in which it will record the names and addresses of the Lenders,
and the Commitments from time to time of each of such Lenders, the Loans made to
the Borrower by each of such Lenders and each repayment and prepayment in
respect of the principal amount of such Loans of each such Lender. Failure to
make any such recordation, or (absent manifest error) any error in such
recordation, shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Lender, the transfer of any Commitment of such Lender
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitment or any Competitive Bid Borrowing shall not be effective until
such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain owing to the transferor. The registration
of assignment or transfer of all or part of any Commitment and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement or Designation Agreement pursuant to section 12.4(b), (c),
(d) or (e). The Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Administrative
Agent in performing its duties under this section 12.16. The Lender Register
shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
12.17. NO DUTY. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Credit Documents
shall have the right to act exclusively in the interest of the Administrative
Agent or such Lender, as the case may be, and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, to any of its Subsidiaries, or to any other person,
with respect to any matters within the scope of such representation or related
to their activities in connection with such representation.
12.18. LENDERS AND AGENT NOT FIDUCIARY TO BORROWER, ETC. The
relationship among the Borrower and its Subsidiaries, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, is solely that of
debtor and creditor, and the Administrative Agent and the Lenders have no
fiduciary or other special relationship with the Borrower and its Subsidiaries,
and no term or provision of any Credit Document, no course of dealing, no
written or oral communication, or other action, shall be construed so as to deem
such relationship to be other than that of debtor and creditor.
12.19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties herein shall survive the making of Loans hereunder, the execution
and delivery of this Agreement, the Notes and the other documents the forms of
which are attached as Exhibits hereto, the issue and delivery of the Notes, any
disposition thereof by any holder thereof, and any investigation made by the
Administrative Agent or any Lender or any other holder of any of the Notes or on
its behalf. All statements contained in any certificate or other document
delivered to the Administrative Agent or any Lender or any holder of any Notes
by or on behalf of the Borrower or of its Subsidiaries pursuant hereto or
otherwise specifically for use in connection with the transactions contemplated
hereby shall constitute representations and warranties by the Borrower
hereunder, made as of the respective dates specified therein or, if no date is
specified, as of the respective dates furnished to the Administrative Agent or
any Lender.
[The balance of this page is intentionally blank.]
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<PAGE> 62
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
THE STANDARD REGISTER COMPANY
BY:
-------------------------------------------
SENIOR VICE PRESIDENT-ADMINISTRATION,
TREASURER & CHIEF FINANCIAL OFFICER
KEYBANK NATIONAL ASSOCIATION,
INDIVIDUALLY AS A LENDER
AND AS ADMINISTRATIVE AGENT
BY:
-------------------------------------------
VICE PRESIDENT
57
<PAGE> 63
ANNEX I
INFORMATION AS TO LENDERS
<TABLE>
<CAPTION>
==========================================================================================================================
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
KeyBank National KeyBank National Association KeyBank National Association,
Association GENERAL Key Center Cayman Islands Branch
REVOLVING 127 Public Square c/o KeyBank National Association
COMMITMENT: Cleveland, Ohio 44114 Key Center
127 Public Square
$300,000,000 CONTACTS/ NOTIFICATION METHODS: Cleveland, Ohio 44114
SWING LINE KeyBank National Association
REVOLVING Key Center
COMMITMENT: 127 Public Square
Cleveland, Ohio 44114
$50,000,000 Attn.: Large Corporate Group
Facsimile: (216) 689-4981
Michael Landini
Vice President
Direct Dial: (216) 689-5562
Facsimile: (216) 689-4981
CONTACT FOR BORROWINGS, PAYMENTS, ETC.:
Loree Kuttler
Large Corporate Group
Phone: (216) 689-0206
FAX: (216) 689-4981
WIRING INFORMATION:
ABA # 041 001 039
Ref.: The Standard Register Company
Attention: Commercial Loan Operations
==========================================================================================================================
</TABLE>
<PAGE> 64
ANNEX II
INFORMATION AS TO SUBSIDIARIES
(as of December 15, 1997,
but after giving pro forma effect to the
completion of the Uarco Acquisition)
<TABLE>
<CAPTION>
=====================================================================================================================
PERCENTAGE OF
OUTSTANDING STOCK OR
NAME TYPE OF JURISDICTION OTHER EQUITY INTERESTS
OF SUBSIDIARY ORGANIZATION WHERE ORGANIZED OWNED (INDICATING
WHETHER OWNED BY THE
BORROWER OR A SPECIFIED
SUBSIDIARY)
=====================================================================================================================
<S> <C> <C> <C>
Settsu Holding Corp. corporation Delaware Borrower--100%
- ---------------------------------------------------------------------------------------------------------------------
Settsu-Uarco Holdings, corporation Delaware Settsu Holding Corp.--
Inc. 100%
- ---------------------------------------------------------------------------------------------------------------------
Uarco Incorporated corporation Delaware Settsu Holding Corp.--
100%
- ---------------------------------------------------------------------------------------------------------------------
United Autographic corporation Illinois Uarco Incorporated--
- ---------------------------------------------------------------------------------------------------------------------
Register Co. 100%
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
=====================================================================================================================
</TABLE>
<PAGE> 65
ANNEX III
DESCRIPTION OF EXISTING INDEBTEDNESS
1. Guaranty dated as of January 1, 1978 in the face amount of
$4,600,000, issued by Borrower to the Commerce Union Bank, as Trustee, One
Commerce Place, Nashville, Tennessee 37239, wherein Borrower unconditionally
guaranteed (i) the prompt repayment of certain First Mortgage Industrial Revenue
Bonds, Series A (the "Series A Bonds") in the face amount of $4,600,000, issued
by The Industrial Development Board of Rutherford County, Tennessee, and (ii)
the payment of all interest coupons upon the Series A Bonds. The unpaid
principal balance of the Series A Bonds as of December 15, 1997 is $4,600,000.
The Series A Bonds were issued by The Industrial Development Board of Rutherford
County, Tennessee, to construct and equip a manufacturing facility in the City
of Murfreesboro, County of Rutherford, State of Tennessee, which the Borrower is
leasing from The Industrial Development Board of Rutherford County, Tennessee
pursuant to a 25-year Lease Agreement dated as of January 1, 1978 (the "Lease")
between The Industrial Development Board of Rutherford County, Tennessee, as
Lessor, and Borrower, as Lessee. The Lease will terminate on January 1, 2003.
<PAGE> 66
ANNEX IV
DESCRIPTION OF EXISTING LIENS
1. A Mortgage and Trust Indenture dated as of January 1, 1978 in the
face amount of $4,600,000, between The Industrial Development Board of
Rutherford County, Tennessee (the "Issuer"), and the Commerce Union Bank, as
Trustee (the "Trustee") in which the issuer mortgaged to the Trustee a tract of
real estate containing 15.45 acres of land (the "Premises") and certain
described industrial equipment (the "Equipment") located in the City of
Murfreesboro, County of Rutherford, State of Tennessee, as security for the
repayment of certain First Mortgage Industrial Revenue Bonds, Series A in the
face amount of $4,600,000 (the "Series A Bonds") and all interest coupons upon
the Series A Bonds. The Series A Bonds were issued by the Issuer to construct a
manufacturing facility (the "Manufacturing Facility") upon the Premises and to
purchase the Equipment. The Borrower has leased the Manufacturing Facility and
Equipment from the Issuer pursuant to a 25-year Lease Agreement dated as of
January 1, 1978 (the "Lease"), between the Trustee, as Lessor, and Borrower, as
Lessee. The Lease will terminate on January 1, 2003.
<PAGE> 67
EXHIBIT A-1
GENERAL REVOLVING NOTE
$_______________ Cleveland, Ohio
________, 1997
FOR VALUE RECEIVED, the undersigned THE STANDARD REGISTER COMPANY, an
Ohio corporation (herein, together with its successors and assigns, the
"BORROWER"), hereby promises to pay to the order of _________________________
(the "LENDER"), in lawful money of the United States of America in immediately
available funds, at the Payment Office (such term and certain other terms used
herein without definition shall have the meanings ascribed thereto in the
Agreement referred to below) of KeyBank National Association (the
"ADMINISTRATIVE AGENT"), on the General Revolving Maturity Date, the principal
sum of ______________ DOLLARS ($________) or, if less, the then unpaid principal
amount of all General Revolving Loans made by the Lender to the Borrower
pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount of each General Revolving Loan made by the Lender to the Borrower in like
money at said office from the date hereof until paid at the rates and at the
times provided in section 2.8 of the Agreement.
This Note is one of the General Revolving Notes referred to in the
Credit Agreement, dated as of December 15, 1997, among the Borrower, the
financial institutions from time to time party thereto (including the Lender),
and KeyBank National Association, as Administrative Agent (as from time to time
in effect, the "AGREEMENT"), and is entitled to the benefits thereof and of the
other Credit Documents. As provided in the Agreement, this Note is subject to
mandatory prepayment prior to the General Revolving Maturity Date, in whole or
in part.
In case an Event of Default shall occur and be continuing, the
principal of and accrued interest on this Note may be declared to be due and
payable in the manner and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. No failure to exercise, or delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of any such rights.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF OHIO.
THE STANDARD REGISTER COMPANY
By:
-------------------------------------------
Senior Vice President-Administration,
Treasurer & Chief Financial Officer
<PAGE> 68
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
=========================================================================================================================
AMOUNT
OF
DATE AMOUNT TYPE PRINCIPAL UNPAID
OF OF OF INTEREST PAID OR PRINCIPAL MADE
NOTATION LOAN LOAN PERIOD PREPAID BALANCE BY
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
=========================================================================================================================
</TABLE>
<PAGE> 69
EXHIBIT A-2
SWING LINE REVOLVING NOTE
U.S.$________________ Cleveland, Ohio
_________, 1997
FOR VALUE RECEIVED, the undersigned THE STANDARD REGISTER COMPANY, an
Ohio corporation (herein, together with its successors and assigns, the
"BORROWER"), hereby promises to pay to the order of _________________________
(the "LENDER"), in lawful money of the United States of America in immediately
available funds, at the Payment Office (such term and certain other terms used
herein without definition shall have the meanings ascribed thereto in the
Agreement referred to below) of KeyBank National Association (the
"ADMINISTRATIVE AGENT"), the principal sum of __________ DOLLARS ($________) or,
if less, the then unpaid principal amount of all Swing Line Revolving Loans made
by the Lender to the Borrower pursuant to the Agreement. The Borrower will pay
the principal amount of any Swing Line Revolving Loan on the maturity date
specified therefor in the Notice of Borrowing relating thereto, which maturity
date shall in no event be more than 30 days following the date such Swing Line
Revolving Loan was made.
The Borrower promises also to pay interest on the unpaid principal
amount of each Swing Line Revolving Loan made by the Lender in like money at
said office from the date hereof until paid at the rates and at the times
provided in section 2.8 of the Agreement.
This Note is one of the Swing Line Revolving Notes referred to in the
Credit Agreement, dated as of December 15, 1997, among the Borrower, the
financial institutions from time to time party thereto (including the Lender),
and KeyBank National Association, as Administrative Agent (as from time to time
in effect, the "AGREEMENT"), and is entitled to the benefits thereof and of the
other Credit Documents (as defined in the Agreement). As provided in the
Agreement, this Note is subject to mandatory prepayment prior to the maturity
date of any Swing Line Revolving Loan, in whole or in part.
In case an Event of Default shall occur and be continuing, the
principal of and accrued interest on this Note may be declared to be due and
payable in the manner and with the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. No failure to exercise, or delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of any such rights.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF OHIO.
THE STANDARD REGISTER COMPANY
By:
-----------------------------------------
Senior Vice President-Administration,
Treasurer & Chief Financial Officer
<PAGE> 70
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
=======================================================================================================================
TYPE AMOUNT
OF OF
DATE AMOUNT LOAN/ PRINCIPAL UNPAID
OF OF OR PAID OR PRINCIPAL MADE
NOTATION LOAN INTEREST MATURITY PREPAID BALANCE BY
RATE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
=======================================================================================================================
</TABLE>
<PAGE> 71
EXHIBIT A-3
COMPETITIVE BID NOTE
Cleveland, Ohio
[Date]
FOR VALUE RECEIVED, the undersigned THE STANDARD REGISTER COMPANY, an
Ohio corporation (herein, together with its successors and assigns, the
"BORROWER"), hereby promises to pay to the order of _________________________
(the "LENDER"), in lawful money of the United States of America in immediately
available funds, at the Payment Office (such term and certain other capitalized
terms used herein without definition shall have the respective meaning ascribed
thereto in the Agreement referred to below) of KeyBank National Association (the
"ADMINISTRATIVE AGENT"), the principal amount of each Competitive Bid Loan made
by the Lender to the Borrower pursuant to the Agreement on the date or dates
provided therefor pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount of each Competitive Bid Loan evidenced hereby in like money at said
office from the date of such Competitive Bid Loan until paid, at the interest
rate and at the times provided therefor pursuant to the Agreement.
The Borrower shall have no right to prepay the principal amount of any
Competitive Bid Loan evidenced hereby except as may be provided pursuant to the
Agreement.
If any amount payable hereunder in respect of any Competitive Bid Loan
is not paid when due, the Borrower will pay to the Lender, on demand, interest
on such overdue amount, from the due date until such amount is paid, at the rate
of 2% per annum above the interest rate otherwise payable hereunder with respect
thereto.
This Note is one of the Competitive Bid Notes referred to in the Credit
Agreement, dated as of December 15, 1997, among the Borrower, the financial
institutions from time to time party thereto (including the Lender), and the
Administrative Agent (as from time to time in effect, the "AGREEMENT"), and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement).
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. No failure to exercise, or delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of any such rights.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF OHIO.
THE STANDARD REGISTER COMPANY
By:
------------------------------
Title:
<PAGE> 72
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
=======================================================================================================================
TYPE AMOUNT
OF OF
DATE AMOUNT LOAN/ PRINCIPAL UNPAID
OF OF OR PAID OR PRINCIPAL MADE
NOTATION LOAN INTEREST MATURITY PREPAID BALANCE BY
RATE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
=======================================================================================================================
</TABLE>
<PAGE> 73
EXHIBIT B-1
NOTICE OF REVOLVING BORROWING
[Date]
KeyBank National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
127 Public Square
Cleveland, Ohio 44114
Attention: Large Corporate Group
---------------------
Re: Notice of Revolving Borrowing
under Credit Agreement
----------------------------------
Ladies and Gentlemen:
The undersigned, The Standard Register Company (the "BORROWER"), refers
to the Credit Agreement, dated as of December 15, 1997 (as amended from time to
time, the "CREDIT AGREEMENT", the terms defined therein being used herein as
therein defined), among the Borrower, the financial institutions from time to
time party thereto (the "LENDERS"), and KeyBank National Association, as
Administrative Agent for such Lenders, and hereby gives you notice, irrevocably,
pursuant to section 2.2(a) of the Credit Agreement, that the undersigned hereby
requests one or more Revolving Borrowings under the Credit Agreement, and in
that connection sets forth in the schedule attached hereto the information
relating to each such Borrowing (collectively the "PROPOSED BORROWING") as
required by section 2.2(a) of the Credit Agreement.
The Borrower hereby specifies that the Proposed Borrowing will consist
of Loans as indicated in the schedule attached hereto.
The Borrower hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties of the Borrower
contained in the Credit Agreement are and will be true and correct in
all material respects, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds thereof, as though
made on such date, except to the extent that such representations and
warranties expressly relate to an earlier specified date, in which case
such representations and warranties were true and correct in all
material respects as of the date when made; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
THE STANDARD REGISTER COMPANY
By:
----------------------------------
Title:
<PAGE> 74
BORROWING SCHEDULE
PROPOSED BORROWING #1:
<TABLE>
<CAPTION>
=========================================================================================================================
BUSINESS DAY
OF INTEREST PERIOD
PROPOSED FACILITY TYPE OF AGGREGATE IF LOANS ARE
BORROWING LOANS AMOUNT EURODOLLAR
OF LOANS LOANS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Revolving Prime Rate Loans One Month
______, 19____ Loans
Eurodollar Loans $____________ Two Months
Swing Line Money Market Rate Three Months
Revolving Loans Loans with rate of
interest of ___% and Six Months
[Circle one of maturity of ____ days
above] [Circle one of
[Circle and/or above]
complete one of
above]
=========================================================================================================================
</TABLE>
PROPOSED BORROWING #2:
<TABLE>
<CAPTION>
=========================================================================================================================
BUSINESS DAY
OF INTEREST PERIOD
PROPOSED FACILITY TYPE OF AGGREGATE IF LOANS ARE
BORROWING LOANS AMOUNT EURODOLLAR
OF LOANS LOANS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Revolving Prime Rate Loans One Month
______, 19____ Loans
Eurodollar Loans $____________ Two Months
Swing Line Money Market Rate Three Months
Revolving Loans Loans with rate of
interest of ___% and Six Months
[Circle one of maturity of ____ days
above] [Circle one of
[Circle and/or above]
complete one of
above]
=========================================================================================================================
</TABLE>
<PAGE> 75
PROPOSED BORROWING #3:
<TABLE>
<CAPTION>
=========================================================================================================================
BUSINESS DAY
OF INTEREST PERIOD
PROPOSED FACILITY TYPE OF AGGREGATE IF LOANS ARE
BORROWING LOANS AMOUNT EURODOLLAR
OF LOANS LOANS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Revolving Prime Rate Loans One Month
______, 19____ Loans
Eurodollar Loans $____________ Two Months
Swing Line Money Market Rate Three Months
Revolving Loans Loans with rate of
interest of ___% and Six Months
[Circle one of maturity of ____ days
above] [Circle one of
[Circle and/or above]
complete one of
above]
=========================================================================================================================
</TABLE>
PROPOSED BORROWING #4:
<TABLE>
<CAPTION>
=========================================================================================================================
BUSINESS DAY
OF INTEREST PERIOD
PROPOSED FACILITY TYPE OF AGGREGATE IF LOANS ARE
BORROWING LOANS AMOUNT EURODOLLAR
OF LOANS LOANS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Revolving Prime Rate Loans One Month
______, 19____ Loans
Eurodollar Loans $____________ Two Months
Swing Line Money Market Rate Three Months
Revolving Loans Loans with rate of
interest of ___% and Six Months
[Circle one of maturity of ____ days
above] [Circle one of
[Circle and/or above]
complete one of
above]
=========================================================================================================================
</TABLE>
2
<PAGE> 76
EXHIBIT B-2
NOTICE OF COMPETITIVE BID BORROWING
[Date]
KeyBank National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
127 Public Square
Cleveland, Ohio 44114
Attention: Large Corporate Group
---------------------
Re: Notice of Competitive Bid Borrowing
under Credit Agreement
-----------------------------------------
Ladies and Gentlemen:
The undersigned, The Standard Register Company (the "BORROWER"), refers
to the Credit Agreement, dated as of December 15, 1997 (as amended from time to
time, the "CREDIT AGREEMENT", the terms defined therein being used herein as
therein defined), among the Borrower, the financial institutions from time to
time party thereto (the "LENDERS"), and KeyBank National Association, as
Administrative Agent for such Lenders, and hereby gives you notice, pursuant to
section 2.4(a) of the Credit Agreement, that the undersigned hereby requests a
Competitive Bid Borrowing under the Credit Agreement, and in that connection
sets forth the terms on which such Competitive Bid Borrowing (the "PROPOSED
BORROWING") is requested to be made:
(A) Date of Proposed Borrowing: _________________________.
(B) Amount of Proposed Borrowing: $_______________.
(C) Maturity Date: _______________________.
(D) Interest Rate Basis: _________________________.
(E) Interest Payment Date(s): _________________________.
(F) Default Interest Rate: ___% above the Interest Rate.
(G) _____________________: ________________________.
(H) _____________________: ________________________.
The Borrower hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties of the Borrower
contained in the Credit Agreement are and will be true and correct in
all material respects, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds thereof, as though
made on such date, except to the extent that such representations and
warranties expressly relate to an earlier specified date, in which case
such representations and warranties were true and correct in all
material respects as of the date when made; and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
THE STANDARD REGISTER COMPANY
By:
---------------------------------
Title
<PAGE> 77
EXHIBIT B-3
NOTICE OF CONVERSION
[Date]
KeyBank National Association,
as Administrative Agent for the Lenders party
to the Credit Agreement referred to below
127 Public Square
Cleveland, Ohio 44114
Attention: Large Corporate Group
---------------------
Re: Notice of Conversion
of Outstanding General Revolving Loans
under the Credit Agreement
-----------------------------------------
Ladies and Gentlemen:
The undersigned, The Standard Register Company (the "BORROWER"), refers
to the Credit Agreement, dated as of December 15, 1997 (as amended from time to
time, the "CREDIT AGREEMENT", the terms defined therein being used herein as
therein defined), among the Borrower, the financial institutions from time to
time party thereto (the "LENDERS"), and KeyBank National Association, as
Administrative Agent for such Lenders, and hereby gives you notice, irrevocably,
pursuant to section 2.7 of the Credit Agreement, that the undersigned hereby
requests one or more conversions of General Revolving Loans of one Type into
General Revolving Loans of another Type, pursuant to section 2.7 of the Credit
Agreement, and in that connection sets forth in the schedule attached hereto the
information relating to each such conversion.
Very truly yours,
THE STANDARD REGISTER COMPANY
By:
-----------------------------
Title:
<PAGE> 78
CONVERSION SCHEDULE
PROPOSED CONVERSION #1
[OF THE LOANS DESCRIBED IN THE FIRST TABLE BELOW
INTO LOANS DESCRIBED IN THE SECOND TABLE BELOW]
<TABLE>
<CAPTION>
========================================================================================================================
INTEREST PERIOD
DATE OF LOANS AGGREGATE AMOUNT IF LOANS ARE
AND FACILITY TYPE OF LOANS OF LOANS EURODOLLAR LOANS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One Month
__________, 19____ Prime Rate Loans
$____________________ Two Months
General Revolving Eurodollar Loans
Facility Three Months
Six Months
[Circle One of
Above] [Circle one of
above]
========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================================
INTEREST PERIOD
DATE OF LOANS AGGREGATE AMOUNT IF LOANS ARE
AND FACILITY TYPE OF LOANS OF LOANS EURODOLLAR LOANS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One Month
__________, 19____ Prime Rate Loans
$____________________ Two Months
General Revolving Eurodollar Loans
Facility Three Months
Six Months
[Circle One of
Above] [Circle one of
above]
========================================================================================================================
</TABLE>
<PAGE> 79
PROPOSED CONVERSION #2
[OF THE LOANS DESCRIBED IN THE FIRST TABLE BELOW
INTO LOANS DESCRIBED IN THE SECOND TABLE BELOW]
<TABLE>
<CAPTION>
========================================================================================================================
INTEREST PERIOD
DATE OF LOANS AGGREGATE AMOUNT IF LOANS ARE
AND FACILITY TYPE OF LOANS OF LOANS EURODOLLAR LOANS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One Month
__________, 19____ Prime Rate Loans
$____________________ Two Months
General Revolving Eurodollar Loans
Facility Three Months
Six Months
[Circle One of
Above] [Circle one of
above]
========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
========================================================================================================================
INTEREST PERIOD
DATE OF LOANS AGGREGATE AMOUNT IF LOANS ARE
AND FACILITY TYPE OF LOANS OF LOANS EURODOLLAR LOANS
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One Month
__________, 19____ Prime Rate Loans
$____________________ Two Months
General Revolving Eurodollar Loans
Facility Three Months
Six Months
[Circle One of
Above] [Circle one of
above]
========================================================================================================================
</TABLE>
2
<PAGE> 80
EXHIBIT C
FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
________ __, 1997
To the Administrative Agent and
each of the Lenders party
to the Credit Agreement
referred to below
c/o KeyBank National Association
Key Center
127 Public Square
Cleveland, Ohio 44114
Attention: Large Corporate Group
---------------------
Re: U.S. $300,000,000 Credit Agreement
with The Standard Register Company
-----------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to The Standard Register Company, an
Ohio corporation (the "BORROWER"), in connection with (i) the execution and
delivery of the Credit Agreement, dated as of December 15, 1997 (the "CREDIT
AGREEMENT"), among the Borrower, the financial institutions party thereto (the
"LENDERS"), and KeyBank National Association, as Administrative Agent, and (ii)
the transactions contemplated thereby. Unless otherwise indicated, capitalized
terms used herein but not otherwise defined herein shall have the respective
meanings set forth in the Credit Agreement. This opinion letter is delivered by
us to you at the request of the Borrower in accordance with the requirements of
section 6.1(e) of the Credit Agreement.
As such special counsel, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
records and matters of law as we have considered necessary as a basis for the
opinions set forth herein, including without limitation the following:
(a) the Credit Agreement; and
(b) the General Revolving Note and the Swing Line Revolving
Note delivered today pursuant to the Credit Agreement.
The documents referred to in clauses (a) and (b) above are herein sometimes
referred to as the "CREDIT DOCUMENTS".
In our examination we have assumed the genuineness of all signatures
(other than as to the Borrower), the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies and the authenticity of the originals
of such copies. As to questions of fact not independently verified by us we have
relied, to the extent we deemed appropriate, upon representations and
certificates of officers of the Borrower, public officials and other appropriate
persons. All assumptions and statements of reliance as to factual matters herein
have been made without any independent investigation or verification on our part
except to the extent otherwise expressly stated, and we express no opinion with
respect to the subject matter or accuracy of such assumptions or items relied
upon.
<PAGE> 81
We understand that you have considered the applicability of fraudulent
transfer laws to the transactions contemplated by the Credit Documents, as to
which laws we express no opinion, and have satisfied yourself with respect
thereto.
Our examination of matters of law in connection with the opinions
expressed herein has been limited to the federal laws of the United States and
the laws of the State of Ohio, and, accordingly, no opinions expressed herein
shall be deemed to cover any other laws.
We have neither examined nor requested an examination of the indices or
records of any court or governmental or other agency, authority, instrumentality
or entity, nor have we made inquiry of any person or entity, except as expressly
set forth in this opinion letter. In addition, we have not independently
verified or investigated the accuracy or completeness of any factual information
and, because the scope of our examination did not include such verification, we
assume no responsibility for the accuracy or completeness of any such
information.
As used herein, "to our knowledge" shall mean to the actual knowledge
of the lawyers who have been actively involved in the negotiation of the Credit
Documents and the lawyers in our firm who are the current primary contacts for
the Borrower at the firm.
Based upon the foregoing and subject to the qualifications, assumptions
and limitations contained in this opinion letter, we are of the opinion that:
1. CORPORATE STATUS, ETC. The Borrower (i) is a validly
existing corporation under the laws of the State of Ohio and has the
corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposed to
engage and (ii) to our knowledge, is duly qualified and is authorized
to do business and is in good standing in each jurisdiction where it is
required to be so qualified except where the failure to be so qualified
would not have a Material Adverse Effect.
2. SUBSIDIARIES. To our knowledge, Annex II to the Credit
Agreement correctly sets forth each Subsidiary of the Borrower and the
direct and indirect ownership interest of the Borrower therein.
3. CORPORATE POWER AND AUTHORITY, ETC. The Borrower has the
corporate power and authority to execute, deliver and carry out the
terms and provisions of the Credit Documents to which it is a party and
has taken all necessary corporate action to authorize the execution,
delivery and performance of the Credit Documents to which it is a
party.
4. CREDIT DOCUMENTS. The Borrower has duly executed and
delivered each Credit Document to which it is a party and each such
Credit Document constitutes the legal, valid and binding agreement or
obligation of the borrower enforceable against the Borrower in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by (i) applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws, and
related judicial doctrines, from time to time in effect affecting
creditors' rights and remedies generally, (ii) general principles of
equity (including, without limitation, standards of materiality, good
faith, fair dealing and reasonableness, equitable defenses and limits
on the availability of equitable remedies), whether such principles are
considered in a proceeding at law or in equity, and (iii) the
qualification that certain other provisions of such Credit Documents
may be unenforceable in whole or in part under the laws (including
judicial decisions) of the State of Ohio or other applicable
jurisdictions, but the inclusion of such provisions does not affect the
validity as against the Borrower of any of such Credit Documents as a
whole, and such Credit Documents contain adequate provisions for
enforcing payment of the obligations governed thereby and for the
realization of the principal rights and benefits afforded thereby,
subject to the other qualifications and limitations contained in this
opinion letter.
5. NO VIOLATION. Neither the execution, delivery or
performance by the Borrower of the Credit Documents to which it is a
party nor compliance with the terms and provisions thereof, (i) will
contravene any provision of any State of Ohio or United States federal
law, statute, rule, regulation
2
<PAGE> 82
(including, without limitation, Regulations G, T, U and X of the Board
of Governors of the Federal Reserve System), or, to our knowledge, any
order, writ, injunction or decree of any court or governmental
instrumentality applicable to the Borrower or its properties and
assets, (ii) will conflict or result in any breach of, any of the
terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of the
Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, or other material agreement or
other instrument, in each case of which we have knowledge to which the
Borrower or any of its Subsidiaries is a party or by which it or any of
its property or assets are bound or to which it may be subject, or
(iii) will violate any provision of the articles of incorporation or
code of regulations of the Borrower.
6. GOVERNMENTAL APPROVALS. No order, consent, approval,
license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any Ohio or United States federal
governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required as a condition to (i) the
execution, delivery and performance by the Borrower of any Credit
Document to which it is a party, or (ii) the legality, validity,
binding effect or enforceability of any such Credit Document.
7. LITIGATION. To our knowledge, there are no actions, suits
or proceedings pending or overtly threatened in writing with respect to
the Borrower or any of its Subsidiaries (i) that have, or could
reasonably be expected to have, a Material Adverse Effect, or (ii)
which question the validity or enforceability of any of the Credit
Documents, or of any action to be taken by the Borrower pursuant to any
of the Credit Documents.
8. INVESTMENT COMPANY ACT, ETC. Neither the Borrower nor any
of its Subsidiaries is subject to regulation with respect to the
creation or incurrence of Indebtedness under the Investment Company Act
of 1940, as amended, the Interstate Commerce Act, as amended, the
Federal Power Act, as amended, the Public Utility Holding Company Act
of 1935, as amended, or any applicable Ohio state public utility law.
* * * * *
The opinions set forth above are subject to the following assumptions,
qualifications and limitations:
(a) We express no opinion as to the enforceability of any
provision in the Credit Documents:
(i) relating to forum selection to the extent the
forum is a federal court;
(ii) relating to forum selection to the extent that
the enforceability of any such provision is to be determined
by any court other than a court of the State of Ohio;
(iii) specifying that provisions thereof may be
waived only in writing, to the extent that an oral agreement
or an implied agreement by trade practice or course of conduct
has been created that modifies any provision of such Credit
Documents;
(b) We express no opinion as to the enforceability of (i) any
purported waiver, release, variation, disclaimer, consent or other
agreement to similar effect (all of the foregoing, collectively, a
"WAIVER") by the Borrower under any of the Credit Documents to the
extent limited by sections 1-102(3) or 9-501(3) of the UCC or other
provisions of applicable law (including judicial decisions), or to the
extent that such a Waiver applies to a right, claim, duty, defense or
ground for discharge otherwise existing or occurring as a matter of law
(including judicial decisions), except to the extent that such a Waiver
is effective under and is not prohibited by or void or invalid under
section 9-501 of the UCC or other provisions of applicable law
(including judicial decisions), or (ii) any Waiver by a guarantor or
other surety insofar as it relates to causes or circumstances that
would operate as a discharge or release of, or defense available to, a
guarantor
3
<PAGE> 83
or other surety thereunder as a matter of law (including judicial
decisions), except to the extent that such a Waiver is effective under
and is not prohibited by or void or invalid under applicable law
(including judicial decisions).
(c) We express no opinion as to the validity or enforceability
of any provisions which may be contained in a guarantee or other
suretyship document made by a guarantor or other surety, to the effect
that amendments or other waivers or modifications of provisions of
documents governing the underlying primary obligations will not affect
the obligations of the guarantor or other surety, in circumstances
where such any such amendment, waiver or other modification so
radically changes the essential nature of the terms and conditions of
the underlying primary obligations that, in effect, a new contract has
arisen between the primary obligor and any person for whose benefit the
underlying primary obligation was originally undertaken.
(d) Except as provided in paragraph 5 above with respect to
compliance with Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System, we express no opinion as to the compliance
or noncompliance, or the effect of the compliance or noncompliance, of
any of the addressees or their assigns or participants with any state
or federal laws or regulations applicable to any of them by reason of
their status as or affiliation with a federally insured depository
institution.
(e) We note for your information that, as a matter of public
policy, provisions of documents obligating a party to pay costs and
expenses of enforcement may not be given effect in a proceeding brought
in the courts of the State of Ohio.
This opinion letter is being furnished only to the addresses and is
solely for their benefit and the benefit of their participants and assigns in
connection with the transactions contemplated by the Credit Documents. This
opinion letter may not be relied upon for any other purpose, or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,
4
<PAGE> 84
EXHIBIT D
----------------------------
FORM OF
ASSIGNMENT AGREEMENT
----------------------------
<PAGE> 85
ASSIGNMENT AGREEMENT
DATE:_____________
Reference is made to the Credit Agreement described in Item 2 of Annex
I annexed hereto (as such Credit Agreement may hereafter be amended, modified or
supplemented from time to time, the "CREDIT AGREEMENT"). Unless defined in Annex
I attached hereto, terms defined in the Credit Agreement are used herein as
therein defined.
_____________ (the "ASSIGNOR") and ______________ (the "ASSIGNEE")
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I (the "ASSIGNED SHARE") of all of
Assignor's outstanding rights and obligations under the Credit Agreement
indicated in Item 4 of Annex I, including, without limitation, all rights and
obligations with respect to the Assigned Share of the Assignor's Commitment and
of the Loans and the Notes held by the Assignor. After giving effect to such
sale and assignment, the Assignee's Commitment will be as set forth in Item 4 of
Annex I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or the other
Credit Documents or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized
to enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Credit Agreement and the other Credit
Documents, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; [and] (v) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit Agreement
are required to be performed by it as a Lender[; and (vi) to the extent legally
entitled to do so, attaches the forms described in section 5.5 of the Credit
Agreement.1
4. Following the execution of this Assignment Agreement by the Assignor
and the Assignee, an executed original hereof (together with all attachments)
will be delivered to the Administrative Agent. The effective date of this
Assignment Agreement shall be the date of execution hereof by the Assignor, the
Assignee and the consent hereof by the Administrative Agent and the receipt by
the Administrative Agent of the administrative fee referred to
- ---------------
1 If the Assignee is organized under the laws of a jurisdiction outside
the United States.
<PAGE> 86
in section 12.4(b) of the Credit Agreement, unless otherwise specified in Item 5
of Annex I hereto (the "SETTLEMENT DATE").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall
be entitled to (x) all interest on the Assigned Share of the Loans at the rates
specified in Item 6 of Annex I, and (y) all Facility Fee (if applicable) on the
Assigned Share of the Commitment at the rate specified in Item 7 of Annex I,
which, in each case, accrue on and after the Settlement Date, such interest and,
if applicable, Facility Fee, to be paid by the Administrative Agent, upon
receipt thereof from the Borrower, directly to the Assignee. It is further
agreed that all payments of principal made by the Borrower on the Assigned Share
of the Loans which occur on and after the Settlement Date will be paid directly
by the Administrative Agent to the Assignee. Upon the Settlement Date, the
Assignee shall pay to the Assignor an amount specified by the Assignor in
writing which represents the Assigned Share of the principal amount of the
respective Loans made by the Assignor pursuant to the Credit Agreement which are
outstanding on the Settlement Date, net of any closing costs, and which are
being assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Settlement Date directly between themselves on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
-------------------------------- -----------------------------
Title: Title:
Acknowledged and Agreed:
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent
By:
------------------------------
Vice President
2
<PAGE> 87
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. The Borrower: THE STANDARD REGISTER COMPANY
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of December 15, 1997, among The Standard
Register Company, the Lenders from time to time party thereto, and KeyBank
National Association, as Administrative Agent.
3. Date of Assignment Agreement:
,
--------- --- -----
4. Amounts (as of date of item #3 above):
<TABLE>
<CAPTION>
================= ================= ================= ================= =================
General General Swing Line Swing Line
Revolving Revolving Revolving Revolving
Commitment Loans Commitment Loans
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggregate
Amount for all $______ $______ $______ $______
Lenders
- -----------------------------------------------------------------------------------------
Assigned Share
_____% _____% _____% _____%
- -----------------------------------------------------------------------------------------
Amount of
Assigned Share $______ $______ $______ $______
================= ================= ================= ================= =================
</TABLE>
5. Settlement Date:
--------- ---, ---
6. Rate of Interest
to the Assignee: As set forth in section 2.8 of the Credit
Agreement (unless otherwise agreed to by the
Assignor and the Assignee).2
- --------------------
2 The Borrower and the Administrative Agent shall direct the entire
amount of the interest to the Assignee at the rate set forth in section
2.8 of the Credit Agreement, with the Assignor and Assignee effecting
any agreed upon sharing of interest through payments by the Assignee to
the Assignor.
<PAGE> 88
7. Facility
Fee: As set forth in section 4.1(a) of the Credit
Agreement (unless otherwise agreed to by
the Assignor and the Assignee).3
8. Notices:
ASSIGNOR: ASSIGNEE:
- ---------------------- ----------------------
- ---------------------- ----------------------
- ---------------------- ----------------------
Attention: Attention:
Telephone No.: Telephone No.:
Facsimile No.: Facsimile No.:
9. Payment Instructions:
ASSIGNOR: ASSIGNEE:
- ---------------------- ----------------------
- ---------------------- ----------------------
- ---------------------- ----------------------
ABA No.: ABA No.:
Account No.: Account No.:
Reference: Reference:
Attention: Attention:
- ----------------------
3 The Borrower and the Administrative Agent shall direct the entire
amount of the Facility Fee to the Assignee at the rate set forth in
section 4.1(a) of the Credit Agreement, with the Assignor and the
Assignee effecting any agreed upon sharing of Facility Fee through
payment by the Assignee to the Assignor.
2
<PAGE> 89
EXHIBIT E
----------------------------
FORM OF
DESIGNATION AGREEMENT
----------------------------
<PAGE> 90
DESIGNATION AGREEMENT
Dated _______, 19___
Reference is made to the Credit Agreement, dated as of December 15,
1997 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among The Standard Register Company, an Ohio corporation
(herein, together with its successors and assigns, the "BORROWER"), the Lenders
(as defined in the Credit Agreement), and KeyBank National Association, as
Administrative Agent for the Lenders (the "ADMINISTRATIVE AGENT").
Terms defined in the Credit Agreement are used herein with the same meaning.
__________(the "DESIGNATOR") and ________ (the "DESIGNEE") agree as
follows:
1. The Designator hereby designates the Designee, and the Designee
hereby accepts such designation, to have a right to make Competitive Bid Loans
pursuant to section 2.5 of the Credit Agreement.
2. The Designator makes no representation or warranty and assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto and
(ii) the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.
3. The Designee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
section 7.8(a) thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement and, if the Designee is an insurance company, represents
and warrants that the designation hereunder shall not constitute or otherwise
result in any prohibited transaction under Section 406 of ERISA or Section 4975
of the Internal Revenue Code; (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the Designator or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) confirms that it is a Designated
Bidder; (iv) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Lender; and (vi) specifies as its Applicable Lending Office with respect to
Competitive Bid Loans (and address for notices) the offices set forth beneath
its name on the signature pages hereof.
4. Following the execution of this Designation Agreement by the
Designator and its Designee, it will be delivered to the Administrative Agent
for acceptance and recording by the Administrative Agent. The effective date of
this Designation Agreement shall be the date of acceptance thereof by the
Administrative Agent (the "EFFECTIVE DATE").
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, the Designee shall be a party to the Credit Agreement
with a right to make Competitive Bid Loans as a Lender pursuant to section 2.4
of the Credit Agreement and the rights and obligations of a Lender related
thereto.
6. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of Ohio.
<PAGE> 91
7. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Designation
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
[NAME OF DESIGNATOR]
By:
-------------------------------------
Vice President
[NAME OF DESIGNEE]
By:
-------------------------------------
Vice President
Applicable Lending Office (and address
for notices):
[Address]
Accepted this __ day
of ________, 19___
KEYBANK NATIONAL ASSOCIATION,
as Administrative Agent
By:
-------------------------------
Vice President
2
