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CREDIT AGREEMENT
among
BALDWIN EUROPE CONSOLIDATED B.V.,
as Borrower
BALDWIN TECHNOLOGY COMPANY, INC.,
as Parent, Guarantor and Borrower Representative
BALDWIN AMERICAS CORPORATION,
BALDWIN EUROPE CONSOLIDATED INC.,
BALDWIN ASIA PACIFIC CORPORATION,
BALDWIN GRAPHIC SYSTEMS INC.,
BALDWIN GERMANY GMBH,
BALDWIN U.K. HOLDING LIMITED,
BALDWIN (U.K.) LTD.,
ACROTEC UK LTD.,
BALDWIN GLOBALTEC LTD.,
BALDWIN SWEDEN HOLDING AB,
BALDWIN IVT AB,
BALDWIN JIMEK AB,
JAPAN-BALDWIN LTD.,
as Guarantors
and
MAPLE BANK GMBH,
as Lender
Dated as of July 25, 2003
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TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit................................................................ 1
1.01 Commitments ................................................................................. 1
1.02 Minimum Borrowing Amounts, etc............................................................... 2
1.03 Notice of Borrowing; Borrowing Base Certificate.............................................. 2
1.04 Disbursement of Funds........................................................................ 2
1.05 Notes........................................................................................ 2
1.06 Interest..................................................................................... 3
1.07 Increased Costs; Illegality; etc............................................................. 4
1.08 Compensation................................................................................. 6
SECTION 1A. Letters of Credit........................................................................ 6
1A.01 Letters of Credit........................................................................... 6
1A.02 Minimum Stated Amount....................................................................... 7
1A.03 Letter of Credit Requests................................................................... 7
1A.04 Agreement to Repay Letter of Credit Drawings................................................ 7
SECTION 2. Borrower Representative................................................................... 8
SECTION 3. Fees; Commitments......................................................................... 9
3.01 Fees ........................................................................................ 9
3.02 Voluntary Termination of Commitment.......................................................... 9
3.03 Other Termination of Commitment.............................................................. 9
SECTION 4. Prepayments; Repayments; Taxes............................................................ 10
4.01 Voluntary Prepayments........................................................................ 10
4.02 Mandatory Repayments......................................................................... 10
4.03 Method and Place of Payment.................................................................. 11
4.04 Net Payments................................................................................. 12
SECTION 5. Conditions Precedent to Credit Events on the Initial Borrowing Date....................... 13
5.01 Execution of Agreement; Revolving Notes...................................................... 13
5.02 Officer's Certificate........................................................................ 13
5.03 Opinions of Counsel.......................................................................... 13
5.04 Company Documents............................................................................ 13
5.05 Approvals ................................................................................... 13
5.06 Refinancing ................................................................................. 14
5.07 Pledge Agreements............................................................................ 15
5.08 Security Agreements.......................................................................... 15
5.09 Foreign Security Agreements.................................................................. 16
5.10 Shareholders' Agreements; Management Agreements; Collective Bargaining
Agreements; Existing Indebtedness Agreements; Tax Allocation Agreements................... 16
5.11 Solvency Certificate; Insurance Certificates; etc............................................ 17
5.12 Financial Statements; Pro Forma Financial Statements; Projections............................ 17
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5.13 Payment of Fees.............................................................................. 18
5.14 Consent Letter............................................................................... 18
5.15 Material Contracts........................................................................... 18
5.16 Purchase and Sale Agreements................................................................. 18
5.17 Notice to Bank............................................................................... 18
SECTION 6. Conditions Precedent to All Credit Events................................................. 19
6.01 No Default; Representations and Warranties................................................... 19
6.02 Notice of Borrowing; Letter of Credit Request................................................ 19
6.03 Adverse Change, etc.......................................................................... 19
6.04 Litigation .................................................................................. 19
6.05 Eligible Accounts Receivable................................................................. 19
6.06 Notice to Customers.......................................................................... 19
6.07 Other Proceedings............................................................................ 19
SECTION 7. Representations and Warranties............................................................ 20
7.01 Company Status............................................................................... 20
7.02 Company Power and Authority.................................................................. 20
7.03 No Violation................................................................................. 20
7.04 Litigation .................................................................................. 21
7.05 Use of Proceeds; Margin Regulations.......................................................... 21
7.06 Governmental Approvals....................................................................... 21
7.07 Investment Company Act....................................................................... 21
7.08 Public Utility Holding Company Act........................................................... 21
7.09 True and Complete Disclosure................................................................. 21
7.10 Financial Condition; Financial Statements.................................................... 22
7.11 Security Interests........................................................................... 23
7.12 Compliance with ERISA........................................................................ 23
7.13 Capitalization............................................................................... 25
7.14 Subsidiaries................................................................................. 26
7.15 Intellectual Property, etc................................................................... 26
7.16 Compliance with Statutes; Agreements, etc.................................................... 26
7.17 Environmental Matters........................................................................ 27
7.18 Properties .................................................................................. 28
7.19 Labor Relations.............................................................................. 28
7.20 Tax Returns and Payments..................................................................... 28
7.21 Insurance ................................................................................... 29
7.22 Material Contract............................................................................ 29
7.23 Existing Indebtedness........................................................................ 29
7.24 No Burdensome Restrictions................................................................... 29
7.25 Status Under Certain Federal Statutes........................................................ 29
7.26 German Money Laundering Act.................................................................. 30
7.27 Dutch PMP Representation..................................................................... 30
7.28 Status of Accounts........................................................................... 30
SECTION 8. Affirmative Covenants..................................................................... 30
8.01 Information Covenants........................................................................ 30
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8.02 Books, Records and Inspections; Servicing Agreement.......................................... 35
8.03 Insurance ................................................................................... 35
8.04 Payment of Taxes............................................................................. 36
8.05 Existence; Franchises........................................................................ 36
8.06 Compliance with Statutes; etc................................................................ 36
8.07 Compliance with Environmental Laws........................................................... 37
8.08 ERISA ....................................................................................... 37
8.09 Good Repair ................................................................................. 39
8.10 Further Assurances........................................................................... 39
8.11 Use of Proceeds.............................................................................. 40
8.12 Maintenance of Company Separateness.......................................................... 40
8.13 Performance of Obligations................................................................... 41
8.14 Certain Post-Effective Date Matters.......................................................... 41
8.15 Dutch PMP Representation..................................................................... 42
SECTION 9. Negative Covenants........................................................................ 42
9.01 Changes in Business; etc..................................................................... 42
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc....................................... 42
9.03 Liens ....................................................................................... 43
9.04 Indebtedness................................................................................. 44
9.05 Advances; Investments; Loans................................................................. 45
9.06 Restricted Payments; etc..................................................................... 46
9.07 Transactions with Affiliates................................................................. 46
9.08 Capital Expenditures......................................................................... 46
9.09 Limitation on Voluntary Payments and Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements, etc................... 47
9.10 Limitation on Issuance of Equity Interests................................................... 47
9.11 Limitation on Certain Restrictions on Subsidiaries........................................... 47
9.12 Limitation on the Creation of Subsidiaries................................................... 48
9.13 Limitation on Changes in Fiscal Year......................................................... 48
9.14 Limitation on Negative Pledge Clauses........................................................ 48
9.15 Tax Sharing ................................................................................. 48
9.16 Limitation or Use of Proceeds................................................................ 48
9.17 Customer Contract............................................................................ 48
9.18 Value of Collateral.......................................................................... 48
SECTION 10. Events of Default........................................................................ 49
10.01 Payments ................................................................................... 49
10.02 Representations, etc........................................................................ 49
10.03 Covenants .................................................................................. 49
10.04 Default Under Other Agreements.............................................................. 49
10.05 Bankruptcy, etc............................................................................. 49
10.06 ERISA ...................................................................................... 50
10.07 Security Documents.......................................................................... 50
10.08 Guaranties ................................................................................. 51
10.09 Judgments .................................................................................. 51
10.10 Denial of Liability......................................................................... 51
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10.11 Governmental Action......................................................................... 51
10.12 Material Adverse Effect..................................................................... 51
10.13 Change of Control........................................................................... 51
10.14 Termination Event........................................................................... 51
10.15 Controlling Interest in Baldwin Japan and Baldwin Sweden.................................... 52
10.16 Resolutions................................................................................. 52
SECTION 11. Definitions and Rules of Interpretation.................................................. 52
11.01 Definitions................................................................................. 52
11.02 Rules of Interpretation..................................................................... 75
SECTION 12. Miscellaneous............................................................................ 77
12.01 Payment of Expenses, etc.................................................................... 77
12.02 Right of Setoff............................................................................. 78
12.03 Notices .................................................................................... 78
12.04 Benefit of Agreement; Assignment............................................................ 79
12.05 No Waiver; Remedies Cumulative.............................................................. 80
12.06 Computations................................................................................ 81
12.07 Governing Law; Submission to Jurisdiction; Venue............................................ 81
12.08 Counterparts................................................................................ 82
12.09 Effectiveness............................................................................... 82
12.10 Headings Descriptive........................................................................ 82
12.11 Amendment or Waiver, etc.................................................................... 82
12.12 Survival ................................................................................... 82
12.13 Domicile of Loans and Commitments........................................................... 82
12.14 Confidentiality............................................................................. 82
12.15 Waiver of Jury Trial........................................................................ 83
12.16 Waiver of Damages........................................................................... 84
12.17 English Language............................................................................ 84
12.18 Waiver of Sovereign Immunity................................................................ 84
12.19 Judgment Currency........................................................................... 84
12.20 Maple Bank GmbH as a German Bank............................................................ 85
12.21 Notification to and Acknowledgments from Credit Parties..................................... 85
SECTION 13. Guaranty................................................................................. 85
13.01 The Guaranty................................................................................ 85
13.02 Bankruptcy ................................................................................. 86
13.03 Nature of Liability......................................................................... 86
13.04 Independent Obligation...................................................................... 86
13.05 Authorization............................................................................... 86
13.06 Reliance ................................................................................... 87
13.07 Subordination............................................................................... 87
13.08 Waiver ..................................................................................... 88
SECTION 14. Limitation of Liability.................................................................. 88
14.01 UK Guarantee Limitations.................................................................... 88
14.02 US Guarantee Limitations.................................................................... 89
14.03 German Guarantee Limitations................................................................ 89
14.04 Swedish Guarantee Limitations............................................................... 91
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SCHEDULE I List of Lender and Commitment
SCHEDULE II Lender Address
SCHEDULE 5.03 List of Counsel to the Credit Parties
SCHEDULE 7.12 ERISA
SCHEDULE 7.13 Capitalization
SCHEDULE 7.14 Subsidiaries
SCHEDULE 7.17 Environmental Matters
SCHEDULE 7.18 Properties
SCHEDULE 7.21 Insurance
SCHEDULE 7.22 Material Contracts
SCHEDULE 7.23 Existing Indebtedness
SCHEDULE 7.28 Original Accounts
SCHEDULE 9.17 Designated Accounts
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B - Form of Revolving Note
EXHIBIT C - [INTENTIONALLY OMITTED]
EXHIBIT D - Form of Opinion of Counsel to the Credit Parties
EXHIBIT E - Form of Officers' Certificate
EXHIBIT F - Form of Pledge Agreement
EXHIBIT G - Form of Security Agreement
EXHIBIT H-1 - Form of Solvency Certificate
EXHIBIT H-2 - [INTENTIONALLY OMITTED]
EXHIBIT I - Form of Consent Letter
EXHIBIT J - Form of Borrowing Base Certificate
EXHIBIT K - Form of Letter of Credit Request
EXHIBIT L - Form of Notice to Account Debtors
EXHIBIT M - Form of Notice to Bank
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CREDIT AGREEMENT, dated as of July 25, 2003, among BALDWIN
EUROPE CONSOLIDATED B.V., a private company with limited liability incorporated
under the laws of The Netherlands (the "Borrower"), Baldwin Technology Company,
Inc., a Delaware corporation, as Parent, Guarantor and Borrower Representative,
BALDWIN AMERICAS CORPORATION, a Delaware corporation ("BAC"), BALDWIN EUROPE
CONSOLIDATED INC., a Delaware corporation ("BEC"), BALDWIN ASIA PACIFIC
CORPORATION, a Delaware corporation ("BAPC" together with BAC and BEC, each a
"Guarantor Parent"), BALDWIN GRAPHIC SYSTEMS INC., a Delaware corporation
("Baldwin Graphic"), BALDWIN GERMANY GMBH, a German company ("Baldwin Germany"),
BALDWIN U.K. HOLDING LIMITED, a company incorporated in England and Wales
("Baldwin U.K."), BALDWIN (UK) LTD., a company incorporated in England and Wales
("Baldwin (UK)"), ACROTEC UK LTD., a company incorporated in England and Wales
("Acrotec UK"), BALDWIN GLOBALTEC LTD., a company incorporated in England and
Wales ("Baldwin Globaltec"), BALDWIN SWEDEN HOLDING AB, a limited liability
company incorporated in Sweden under registration number 556263-4724 ("Baldwin
Sweden"), BALDWIN IVT AB, a limited liability company incorporated in Sweden
under registration number 556225-4721 ("Baldwin IVT"), BALDWIN JIMEK AB, a
limited liability company incorporated in Sweden under registration number
556528-6860 ("Baldwin Jimek"), JAPAN-BALDWIN LTD., a Japanese company ("Baldwin
Japan" together with Baldwin Graphic, Baldwin Jimek, Baldwin IVT, Baldwin
Sweden, Baldwin Globaltec, Acrotec UK, Baldwin (UK), Baldwin U.K. and Baldwin
Germany, each a "Guarantor Subsidiary, and collectively, the "Guarantor
Subsidiaries") and MAPLE BANK GMBH, a German bank, as Lender. Unless otherwise
defined herein, all capitalized terms used herein and defined in Section 11 are
used herein as so defined.
W I T N E S S E T H:
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Lender is willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments.
(a) Revolving Loans. Subject to and upon the terms and
conditions set forth herein, the Lender agrees to make, at any time and from
time to time on or after the Initial Borrowing Date and prior to the Revolving
Loan Maturity Date, a revolving loan or revolving loans to the Borrower (each, a
"Revolving Loan" and, collectively, the "Revolving Loans"), which Revolving
Loans:
(i) shall be made and maintained in Dollars or Euros as
may be elected by the Borrower Representative;
(ii) except as hereafter provided, shall be incurred and
maintained as Eurodollar Loans (which may be Euro Denominated Loans),
provided that except as otherwise specifically provided in Section
1.07(b), all Revolving Loans made as part of the same Borrowing shall
at all times consist of Revolving Loans of the same Type;
(iii) may be repaid and reborrowed in accordance with the
provisions hereof; and
(iv) shall not be made (and shall not be required to be
made) by the Lender in any instance where the incurrence thereof (after
giving effect to the use of the proceeds thereof on the date of the
incurrence thereof to repay any amounts theretofore outstanding
pursuant to this Agreement) would cause the sum of (x) the aggregate
principal amount of Loans outstanding from the Lender and (y) the
aggregate Stated Amounts of the Letters of Credit issued by the Lender,
to exceed the amount of its Commitment at such time.
Notwithstanding the foregoing, in no event shall the sum of (x) the aggregate
principal amount of the Loans at any time outstanding and (y) the aggregate
Stated Amounts of the Letters of Credit issued by the Lender, exceed the lesser
of (i) the Commitment of the Lender as then in effect and (ii) the Borrowing
Base.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing of Loans shall not be less than the Minimum Borrowing
Amount (or, in the case of a Euro Denominated Loan, the Dollar Equivalent
thereof), and in increments of $100,000 in excess thereof (or, in the case of a
Euro Denominated Loan, the Dollar Equivalent of $100,000). More than one
Borrowing may be incurred on any day, but at no time shall there be outstanding
more than one Borrowing of the Loans in any one-week period.
1.03 Notice of Borrowing; Borrowing Base Certificate. Whenever
the Borrower desires to make a Borrowing of Loans hereunder, an Authorized
Officer of the Borrower Representative shall give the Lender (a) at least three
Business Days' prior written (or telephonic notice promptly confirmed in
writing) notice of each Eurodollar Loan (which may be Euro Denominated Loan) to
be made hereunder, provided that any such notice shall be deemed to have been
given on a certain day only if given before 2:00 P.M. (New York time) on such
day. Each such written notice or telephonic notice promptly confirmed in writing
(each, a "Notice of Borrowing"), except as otherwise expressly provided in
Section 1.07, shall be irrevocable and shall be given by or on behalf of the
Borrower in the form of Exhibit A, appropriately completed to specify: (i) the
aggregate principal amount of the Revolving Loans to be made pursuant to such
Borrowing (stated in the relevant currency), (ii) the date of such Borrowing
(which shall be a Business Day), (iii) the account information for disbursement
of the Revolving Loans, (iv) whether the Revolving Loans shall be incurred in
Dollars or Euros, (v) the Unutilized Commitment after giving effect to such
Borrowing and (vi) information regarding the Eligible Accounts Receivable (both
at such date and as projected for the date of such Borrowing), in form and
substance satisfactory to the Lender.
1.04 Disbursement of Funds. Not later than 4:00 P.M. (New York
time) on the date specified in each Notice of Borrowing, the Lender will make
available the Loan for each such Borrowing requested to be made on such date in
Dollars or Euros (in the case of a Euro Denominated Loan), as requested in the
applicable Notice of Borrowing .
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made by the Lender shall be evidenced by a
promissory note duly executed and
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delivered by the Borrower substantially in the form of Exhibit B with blanks
appropriately completed in conformity herewith (the "Revolving Note").
(b) The Revolving Note issued to the Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of the Lender (or an
affiliate designated by the Lender) or its registered assigns and be dated the
Effective Date (or, if issued thereafter, the date of issuance thereof), (iii)
be in a stated principal amount (expressed in Dollars) equal to the Commitment
of the Lender on the date of issuance thereof (or, if issued after the
termination of such Commitment, in an amount equal to the exposure of the
Lender), provided that if, because of fluctuations in exchange rates after the
date of issuance thereof, the Revolving Note of the Lender would not be at least
in an amount equal to the outstanding principal amount (taking the Dollar
Equivalent of all Euro Denominated Loans evidenced thereby) of the Revolving
Loans made by the Lender at any time outstanding, the Lender may request (and in
such case the Borrower shall promptly execute and deliver, upon return by the
Lender of the Revolving Note to be replaced) a new Revolving Note in an amount
equal to the aggregate principal amount (taking the Dollar Equivalent of all
Euro Denominated Loans evidenced thereby) of the Revolving Loans of the Lender
outstanding on the date of the issuance of such new Revolving Note, (iv) bear
interest as provided in Section 1.06 in respect of Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby from time to time, (v)
be subject to voluntary prepayment as provided in Section 4.01 and mandatory
repayment as provided in Section 4.02 and (vi) be entitled to the benefits of
this Agreement and the other Credit Documents.
(c) The 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 of its Revolving Note endorse on the reverse side
thereof the outstanding principal amount of Loans evidenced thereby. Failure to
make any such notation or any error in any such notation or endorsement shall
not affect the Borrower's obligations in respect of any Loans.
(d) Notwithstanding anything to the contrary contained
above or elsewhere in this Agreement, the Revolving Note shall only be delivered
to the Lender at any time the Lender specifically requests the delivery of the
Revolving Note. No failure of the Lender to request or obtain a Revolving Note
evidencing its Loans to the Borrower shall affect or in any manner impair the
obligations of the Borrower to pay the Loans (and all related Obligations) which
would otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the security or guaranties therefor
provided pursuant to the various Credit Documents. In the event the Lender does
not have a Revolving Note evidencing its outstanding Loans, the Lender shall in
no event be required to make the notations otherwise described in preceding
clause (c). At any time when the Lender requests the delivery of a Revolving
Note to evidence any of its Loans, the Borrower shall promptly execute and
deliver to the respective Lender the requested Revolving Note in the appropriate
amount to evidence such Loans.
1.06 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of any Base Rate Loan from the date of
conversion thereof pursuant to Section 1.07(b) until the maturity thereof
(whether by acceleration or otherwise) at a rate per annum which shall be equal
to the sum of the Applicable Margin plus the Base Rate each as in effect from
time to time; provided that at no times will such interest rate be less than
10.5% per annum.
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(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Revolving Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Loan to a Base Rate Loan pursuant
to Section 1.07(b), at a rate per annum which shall be equal to the sum of the
Applicable Margin as in effect from time to time plus the Eurodollar Rate for a
three-month interest period (an "Interest Period"); provided that at no times
will such interest rate be less than 10.5% per annum.
(c) Overdue principal and, to the extent permitted by
law, overdue interest in respect of each Loan and any other overdue amount
payable by the Borrower hereunder or under any other Credit Document shall, in
each case, bear interest at a rate per annum equal to the rate which is 2% in
excess of the rate then borne by such Loan. Interest which accrues under this
Section 1.06(c) shall be payable on demand.
(d) Accrued and (theretofore) unpaid interest on the
average daily outstanding balance of each Base Rate Loan and each Eurodollar
Loan shall be payable in arrears on each Monthly Payment Date, and on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after maturity, on demand.
(e) Upon each Interest Determination Date, the Lender
shall determine the Eurodollar Rate and Applicable Margin and shall promptly
notify the Borrower Representative thereof. Each such determination shall,
absent manifest error, be final and conclusive and binding on all parties
hereto.
1.07 Increased Costs; Illegality; etc. (a) In the event that
the Lender shall have determined in good faith (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto):
(i) on any Interest Determination Date that, by reason of
any changes arising after the Effective Date affecting the applicable
interbank market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the
definition of the Eurodollar Rate; or
(ii) at any time, that the Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loan or Letter of Credit because of (x)
any change since the Effective Date in any applicable law or
governmental rule, regulation, order, guideline 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, order, guideline or request, such as, for example,
but not limited to (A) a change in the basis of taxation of payments to
the Lender of the principal of or interest on the Loans or any other
amounts payable under the Letters of Credit or otherwise hereunder
(except for changes in the rate of tax on, or determined by reference
to, the net income or net profits of the Lender imposed by the
jurisdiction in which its principal office or applicable lending office
is located), or (B) a change in official reserve requirements, but, in
all events, excluding reserves required under Regulation D to the
extent included in the computation of the Eurodollar Rate
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and/or (y) other circumstances arising since the Effective Date
affecting the Lender, the interbank market or the position of the
Lender in such market; or
(iii) at any time after the Effective Date, that the making
or continuance of any Eurodollar Loan has been made unlawful by any law
or governmental rule, regulation or order (or would conflict with any
governmental rule, regulation, guideline, request or order not having
the force of law but with which the Lender customarily complies even
though the failure to comply therewith would not be unlawful), or
impracticable as a result of a contingency occurring after the
Effective Date which materially and adversely affects the applicable
interbank market;
then, and in any such event, the Lender shall promptly give notice (by telephone
confirmed in writing) to the Borrower. Thereafter (x) in the case of clause (i)
above, in the event Eurodollar Loans are so affected, Eurodollar Loans, shall no
longer be available until such time as the Lender notifies Borrower
Representative that the circumstances giving rise to such notice by the Lender
no longer exist, and any Notice of Borrowing given by Borrower Representative
with respect to Eurodollar Loans, which have not yet been incurred (including by
way of conversion) shall be deemed rescinded, (y) in the case of clause (ii)
above, the Borrower agrees to pay to the 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 the Lender in its sole
discretion shall determine) as shall be required to compensate the Lender for
such increased costs or reductions in amounts received or receivable hereunder
(with the written notice as to the additional amounts owed to the Lender,
submitted to the Borrower by the Lender in accordance with the foregoing to be,
absent manifest error, final and conclusive and binding on all the parties
hereto, 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 1.07(a) upon the subsequent receipt of such notice), (z) in the
case of clause (iii) above, the Borrower shall take one of the actions specified
in Section 1.07(b) as promptly as possible and, in any event, within the time
period required by law. The Lender agrees that if it gives notice to Borrower
Representative of any of the events described in clause (i), (ii) or (iii)
above, it shall promptly notify Borrower Representative if such event ceases to
exist.
(b) At any time that any Eurodollar Loan is affected by
the circumstances described in Section 1.07(a)(ii) or (iii), the Borrower may
(and in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.07(a)(iii) shall) require the affected Lender to convert such
Eurodollar Loan into a Base Rate Loan (which conversion, in the case of the
circumstance described in Section 1.07(a)(iii), shall occur no later than the
last day of the Interest Period then applicable to such Eurodollar Loan, or such
earlier day as shall be required by applicable law).
(c) If the Lender shall have determined after the
Effective Date that the adoption or effectiveness after the Effective Date of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change after the Effective Date in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Lender or any corporation controlling the Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable
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agency, has or would have the effect of reducing the rate of return on the
Lender's or such other corporation's capital or assets as a consequence of the
Lender's Commitment hereunder or its obligations hereunder to a level below that
which the Lender or such other corporation could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration the
Lender's or such other corporation's policies with respect to capital adequacy),
then from time to time, upon written demand by the Lender, accompanied by the
notice referred to in the next succeeding sentence of this clause (c), the
Borrower agrees to pay to the Lender such additional amount or amounts as will
compensate the Lender or such other corporation for such reduction in the rate
of return to the Lender or such other corporation. The Lender, upon determining
in good faith that any additional amounts will be payable pursuant to this
Section 1.07(c), will give prompt written notice thereof to the Borrower
Representative, which notice shall set forth the Lender's basis for asserting
its rights under this Section 1.07(c) and the calculation, in reasonable detail,
of such additional amounts claimed hereunder, although the failure to give any
such notice shall not release or diminish the Borrower's obligations to pay
additional amounts pursuant to this Section 1.07(c) upon the subsequent receipt
of such notice. The Lender's good faith determination of compensation owing
under this Section 1.07(c) shall, absent manifest error, be final and conclusive
and binding on all the parties hereto.
1.08 Compensation. The Borrower agrees to compensate the
Lender, upon its written request (which request shall set forth in reasonable
detail the basis for requesting such compensation), for all 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 the Lender to fund its Eurodollar Loans but excluding any loss of
anticipated profit) which the Lender may sustain: (i) if any repayment
(including any repayment made pursuant to Section 4.01 or 4.02 or as a result of
an acceleration of the Loans pursuant to Section 10) or conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto; (ii) if any prepayment of any of its Eurodollar Loans
is not made on any date specified in a notice of prepayment given by the
Borrower; or (iii) as a consequence of (x) any other default by the Borrower to
repay its Loans when required by the terms of this Agreement or any Revolving
Note held by the Lender or (y) any election made pursuant to Section 1.07(b).
The Lender's calculation of the amount of compensation owing pursuant to this
Section 1.08 shall be made in good faith. The Lender's basis for requesting
compensation pursuant to this Section 1.08 and its calculation of the amount
thereof, shall, absent manifest error, be final and conclusive and binding on
all parties hereto.
SECTION 1A. Letters of Credit.
1A.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower Representative may request the Lender,
at any time and from time to time on and after the Initial Borrowing Date and
prior to the fifth Business Day preceding the Revolving Loan Maturity Date, to
issue, for the account of the Borrower and for the benefit of any holder (or any
trustee, agent or other similar representative for any such holders) of L/C
Supportable Obligations of the respective Credit Party, irrevocable standby
letters of credit for a term to be agreed by the Lender, in a form customarily
used by the Lender or in such other form as has been approved by the Lender
(each such letter of credit, a "Letter of Credit") in support of such L/C
Supportable Obligations. Each Letter of Credit shall be deemed to constitute a
utilization of the Commitment and in no event shall the aggregate Stated Amount
of the Letters
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of Credit outstanding at any time exceed $3,000,000. All Letters of Credit shall
be denominated in Dollars or Euros.
(b) Subject to and upon the terms and conditions set
forth herein, the Lender hereby agrees that it will, at any time and from time
to time on and after the Initial Borrowing Date and prior to the fifth Business
Day preceding the Revolving Loan Maturity Date, following its receipt of a
Letter of Credit Request, issue for the account of the Borrower one or more
Letters of Credit in support of L/C Supportable Obligations of the respective
Credit Party that arise in the ordinary course of business; provided that the
Lender shall be under no obligation to issue any Letter of Credit if at the time
of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain the Lender from issuing such Letter of Credit or any
requirement of law applicable to the Lender or any request or directive
(whether or not having the force of law) from any governmental
authority with jurisdiction over the Lender shall prohibit, or request
that the Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon
the Lender with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which the Lender is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed
loss, cost or expense which was not applicable, in effect or known to
the Lender as of the date hereof and which the Lender in good faith
deems material to it; or
(ii) a Default or an Event of Default exists.
(c) Notwithstanding the foregoing, each Letter of Credit
shall by its term terminate on or before a date to be agreed between the
Borrower Representative and the Lender but in no event later than the fifth
Business Day preceding the Revolving Loan Maturity Date.
1A.02 Minimum Stated Amount. The Stated Amount of each Letter
of Credit upon issuance shall be not less than $100,000 (or if issued in Euros,
the Dollar Equivalent of $100,000), or such lesser amount as is reasonably
acceptable to the Lender.
1A.03 Letter of Credit Requests. (a) Whenever a Credit Party
desires that a Letter of Credit be issued for its account, the Borrower
Representative shall give the Lender at least five Business Days written notice
prior to the proposed date of issuance (which shall be a Business Day). Each
notice shall be in the form of Exhibit K (each, a "Letter of Credit Request"),
and shall specify whether the requested Letter of Credit shall be denominated in
Dollars or Euros. Each Letter of Credit Request shall include any other
documents as the Lender customarily requires in connection therewith.
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Credit Parties, that such
Letter of Credit may be issued in accordance with, and will not violate the
requirements of, Section 1A.01 and Section 6.
1A.04 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the Lender, by making payment in Dollars (or
in the case of Letters of Credit with Stated Amounts denominated in Euros, in
Euros) to the Lender in immediately available
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funds at the Payment Office for any payment or disbursement made by the Lender
under any Letter of Credit issued by it (each such amount so paid until
reimbursed, an "Unpaid Drawing"), not later than the first Business Day after
the Lender notifies the Borrower of such payment or disbursement, with interest
on the amount so paid or disbursed by the Lender, to the extent not reimbursed
prior to 2:00 P.M. (New York time), on the date of such payment or disbursement,
from and including the date paid or disbursed to but excluding the date the
Lender is reimbursed by the Borrower therefor at a rate per annum which shall be
(x) the Eurodollar Rate for the Interest Period in effect from time to time plus
the Applicable Margin, provided, however, to the extent such amounts are not
reimbursed prior to 2:00 P.M. (New York time) on the first Business Day
following notice to the Borrower by the Lender of such payment or disbursement,
interest shall thereafter accrue on the amounts so paid or disbursed by the
Lender and until reimbursed by the Borrower at a rate per annum which shall be
2% in excess of the rate then applicable to such Letter of Credit; provided
further, that it is understood and agreed, however, that the notices referred to
above in this clause (a) and in the immediately preceding proviso shall not be
required to be given if a Default or an Event of Default of the type set forth
in Section 10.05 shall have occurred and be continuing (in which case the Unpaid
Drawings shall be due and payable immediately without presentment, demand,
protest or notice of any kind (all of which are hereby waived by each Credit
Party) and shall bear interest at the rate provided in the foregoing proviso on
and after the first Business Day following the respective Drawing).
(b) The obligations of the Borrower under clause (a)
above shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
respective Credit Party may have or have had against the Lender including,
without limitation, (i) any defense based upon the failure of any drawing under
a Letter of Credit (each, a "Drawing") to conform to the terms of such Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; (ii) any lack of validity or enforceability of any
Letter of Credit; (iii) any draft, demand, certificate or any other documents
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; (iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the Credit
Documents; (v) payment by the Lender under any Letter of Credit against
presentation of a demand, draft or certificate or other document which does not
comply with the terms of such Letter of Credit; (vi) failure of any drawing
under a Letter of Credit or any non-application or misapplication by the
beneficiary of the proceeds of any drawing; or (vii) the fact that a Default or
Event of Default shall have occurred and be continuing; provided, however, that
no Credit Party shall be obligated to reimburse the Lender for any wrongful
payment made by the Lender under a Letter of Credit issued by it as a result of
deliberate acts or omissions constituting willful misconduct or gross negligence
on the part of the Lender (as determined by a court of competent jurisdiction in
a final and non-appealable decision). Any action taken or omitted to be taken by
the Lender under or in connection with any Letter of Credit shall not create for
the Lender any resulting liability to any Credit Party unless such action is
taken or admitted to be taken with gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and non-appealable
decision).
SECTION 2. Borrower Representative. The Lender shall be
entitled to rely upon, and shall be fully protected in relying upon, any Notice
of Borrowing or similar notice believed by the Lender to be genuine. The Lender
may assume that each Person executing and
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delivering such a notice was duly authorized, unless the responsible individual
acting thereon for the Lender has actual knowledge to the contrary. The Borrower
and each Guarantor hereby designates the Borrower Representative as its
representative and agent on its behalf for the purposes of issuing Notices of
Borrowing, giving instructions with respect to the disbursement of the proceeds
of the Loans, giving and receiving all other notices and consents hereunder or
under any of the other Credit Documents and taking all other actions (including
in respect of compliance with covenants) on behalf of the Borrower or the
Guarantors under the Credit Documents. The Borrower Representative hereby
accepts such appointment. The Lender may regard any notice or other
communication pursuant to any Credit Document from the Borrower Representative
as a notice or communication from the Borrower and the Guarantors, and may give
any notice or communication required or permitted to be given to the Borrower or
any Guarantor hereunder to the Borrower Representative on behalf of the Borrower
or such Guarantor or Guarantors. The Borrower and each Guarantor agree that each
notice, election, representation and warranty, covenant, agreement and
undertaking made on its behalf by the Borrower Representative shall be deemed
for all purposes to have been made by the Borrower or such Guarantor or
Guarantors, as the case may be, and shall be binding upon and enforceable
against the Borrower or Guarantor or Guarantors, as the case may be, to the same
extent as if the same had been made directly by the Borrower or Guarantor or
Guarantors, as the case may be.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower shall pay to the Lender (i) a one
time commitment fee of $25,000, which fee shall be due and payable on the
Effective Date, (ii) a renewal fee in an amount computed at the rate of 2.00% of
the Commitment, which fee shall be due and payable on the Effective Date and on
the Anniversary Date (unless the Commitment is terminated earlier pursuant to
Section 3.02 or 3.03), (iii) a commitment fee in an amount computed at the rate
of 0.50% of the Total Unutilized Commitment for the applicable immediately
preceding month, which fee shall be due and payable on each Monthly Payment
Date, (iv) a maintenance fee in an amount computed at the rate of 0.25% of the
daily average aggregate principal amount of the Revolving Loans then outstanding
for the immediately preceding month, which fee shall be due and payable on each
Monthly Payment Date, and (v) a termination fee of $35,000, which fee shall be
due and payable on the date of termination of the Lender's Commitment if the
Borrower elects to terminate such Commitment at any time prior to the date
eighteen (18) months from the Effective Date. All fees once paid shall be
non-refundable.
(b) The Borrower shall pay to the Lender a fee in an
amount to be mutually agreed for the issuance of a Letter of Credit, which fee
shall be due and payable prior to such issuance and once paid shall be
non-refundable.
3.02 Voluntary Termination of Commitment. Upon at least 90
days' prior notice from an Authorized Officer of the Borrower Representative to
the Lender, the Borrower shall have the right, at any time or from time to time,
without premium or penalty, to terminate the Total Unutilized Commitment at such
time, in whole but not in part.
3.03 Other Termination of Commitment. The Lender may terminate
the Commitment in whole on the Anniversary Date by delivering at least 90 days'
prior written notice to the Borrower Representative. In addition to the
foregoing, the Commitment shall
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terminate in its entirety on August 15, 2005. At the election of the Lender, no
Revolving Loan shall be available and/or the Commitment shall terminate in its
entirety upon the occurrence of a Default or an Event of Default.
SECTION 4. Prepayments; Repayments; Taxes.
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay the Loans, without premium or penalty except as otherwise provided in
this Agreement, in whole or in part, at any time and from time to time on the
following terms and conditions:
(i) an Authorized Officer of the Borrower Representative
shall give the Lender written notice (or telephonic notice promptly
confirmed in writing) of the intent of the Borrower to prepay the
Loans, which notice shall be given (x) prior to 2:00 P.M. (New York
time) at least one Business Day prior to the date of such prepayment in
the case of Loans maintained as Base Rate Loans and (y) prior to 10:00
A.M. (New York time) at least three Business Days prior to the date of
such prepayment in the case of Loans maintained as Eurodollar Loans and
in each case specifying the amount of such prepayment which shall be in
an aggregate principal amount of at least $250,000 and minimum
increments of $250,000 in excess thereof.
4.02 Mandatory Repayments. (a) All of the then outstanding
principal amount of each Loan shall be repaid at its maturity (whether by
acceleration or otherwise).
(b) In addition to any other mandatory repayments
pursuant to this Section 4.02, if an Event of Default shall have occurred and be
continuing, on each date on or after the Initial Borrowing Date upon which the
Borrower receives (i) a Dividend from any Person or (ii) a distribution or
payment of any sort from any Person with respect to any Equity Interest of such
Borrower in any of its Subsidiaries, an amount equal to 100% of such proceeds
shall be applied immediately, to the payment of any amount owing to the Lender
under Section 1.08, then to the payment of any interest then due and payable to
the Lender, and then to reduce the remaining principal balance of the Loans.
(c) In addition to any other mandatory repayments
pursuant to this Section 4.02, on each date on or after the Initial Borrowing
Date upon which any of the Credit Parties receives cash proceeds from the
incurrence of Indebtedness by it or any of its Affiliates (other than
Indebtedness permitted to be incurred under Section 9.04 as in effect on the
Effective Date), an amount equal to 100% of the Net Debt Proceeds received by
such Credit Parties therefrom shall, (x) so long as no Default or Event of
Default shall have occurred and be continuing, be deposited in the applicable
Designated Account, and be applied on each Monthly Payment Date, and (y) upon
the occurrence of a Default or an Event of Default, be applied immediately, to
the payment of any amount owing to the Lender under Section 1.08, then to the
payment of any interest then due and payable to the Lender, and then to reduce
the remaining principal balance of the Loans.
(d) In addition to any other mandatory repayments
pursuant to this Section 4.02, on each date on or after the Initial Borrowing
Date upon which any of the Credit Parties receives cash proceeds from any Asset
Sale in excess of $250,000 in the aggregate per annum, an
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amount equal to 100% of the Net Sale Proceeds received by such Credit Parties
therefrom shall, (x) so long as no Default or Event of Default shall have
occurred and be continuing, be deposited in the applicable Designated Account,
and be applied on each Monthly Payment Date, and (y) upon the occurrence of a
Default or an Event of Default, be applied immediately, to the payment of any
amount owing to the Lender under Section 1.08, then to the payment of any
interest then due and payable to the Lender, and then to reduce the remaining
principal balance of the Loans.
(e) In addition to any other mandatory repayments
pursuant to this Section 4.02, on each date on or after the Initial Borrowing
Date upon which any of the Credit Parties receives cash proceeds from any
Recovery Event, an amount equal to 100% of the proceeds of such Recovery Event
received by such Credit Parties shall, (x) so long as no Default or Event of
Default shall have occurred and be continuing, be deposited in the applicable
Designated Account, and be applied on each Monthly Payment Date, and (y) upon
the occurrence of a Default or an Event of Default, be applied immediately, to
the payment of any amount owing to the Lender under Section 1.08, then to the
payment of any interest then due and payable to the Lender, and then to reduce
the remaining principal balance of the Loans.
(f) In addition to any other mandatory repayments
pursuant to this Section 4.02, on each date on or after the Initial Borrowing
Date upon which any of the Credit Parties receives cash proceeds from any
Eligible Accounts Receivables (other than the Japanese Note), an amount equal to
100% of the proceeds of such Eligible Accounts Receivables shall, (x) so long as
no Default or Event of Default shall have occurred and be continuing, be
deposited in the applicable Designated Account, and (I) with respect to
Designated Accounts denominated in Dollars, be applied on each Business Days and
(II) with respect to Designated Accounts denominated in Euros, be applied on
each Payment Date after notice by the Lender to the applicable account bank, to
the payment of any amount owing to the Lender under Section 1.08, then to the
payment of any interest then due and payable to the Lender, and then to the
remaining principal balance of the Loans, unless the Borrower Representative
shall have delivered evidence reasonably satisfactory to the Lender that it is
in compliance with Section 9.18 (including, in reasonable detail, the valuation
of the Borrowing Base at such time) and the Lender shall have agreed that any
such proceeds in excess of the Borrowing Base may be released from the Lien of
the Security Documents and applied at the direction of the Borrower
Representatives, and (y) upon the occurrence of a Default or an Event of
Default, be applied immediately, to the payment of any amount owing to the
Lender under Section 1.08, then to the payment of any interest then due and
payable to the Lender, and then to the remaining principal balance of the Loans.
(g) Nothing in this Section 4.02 shall limit any other
rights or remedies the Lender may have under Section 10 of this Agreement or
under applicable law in connection with any Event of Default.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or the Revolving
Note shall be made to the Lender not later than 2:00 P.M. (New York time) on the
date when due and shall be made in Dollars (or in the case of Euro Denominated
Loans in Euros) in immediately available funds at the Payment Office in respect
of any obligation of the Borrower under this Agreement or pursuant to such other
instructions as the Lender and the Borrower Representative may agree upon in
writing. Any payments under this Agreement which are made later than 2:00 P.M.
(New York time) shall
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be deemed to have been made on the next succeeding Business Day. Whenever any
payment to be made hereunder or under any Revolving Note 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 at the applicable rate during such extension. All
payments of interest, Fees, costs and expenses payable under this Agreement
shall be calculated on the basis of a 360-day year and actual number of days
elapsed, except that payment of interest payable under this Agreement with
respect to Base Rate Loans shall be calculated on the basis of a 365-day year
and actual number of days elapsed.
4.04 Net Payments. (a) All payments made by any Credit Party
under any Credit Document or under any Revolving Note will be made without
setoff, counterclaim or other defense. Except as provided in Section 4.04(b),
all such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income of
the Lender pursuant to the laws of the jurisdiction in which the principal
office or applicable lending office of the Lender is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities with
respect thereto (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as "Taxes"). If any
Taxes are so levied or imposed, other than as a result of a change in the
location of the Payment Office, the Borrower (and any other Credit Party making
the payment) agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Revolving Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Revolving Note. If any amounts are payable in respect of Taxes pursuant to
the preceding sentence, then the Borrower (and any other Credit Party making the
payment) shall be obligated to reimburse the Lender, upon the written request of
the Lender, for taxes imposed on or measured by the net income of the Lender
pursuant to the laws of the jurisdiction in which the principal office or
applicable lending office of the Lender is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which the
Lender is organized or in which the principal office or applicable lending
office of the Lender is located and for any withholding of taxes as the Lender
shall determine are payable by, or withheld from, the Lender in respect of such
amounts so paid to or on behalf of the Lender pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of the Lender pursuant to
this sentence, the Borrower (or Credit Party) will furnish to the Lender within
45 days after receipt thereof certified copies of tax receipts evidencing such
payment by such Borrower (or the respective other Credit Party). The Credit
Parties jointly and severally agree to indemnify and hold harmless the Lender,
and reimburse the Lender upon its written request, for the amount of any Taxes
so levied or imposed and paid by the Lender.
(b) The Lender agrees to use reasonable efforts
(consistent with legal and regulatory restrictions and subject to overall policy
considerations of such Lender) to file any certificate or document or to furnish
to the Borrower Representative any information, in each case, as reasonably
requested by the Borrower Representative that may be necessary to establish any
available exemption from, or reduction in the amount of, any Taxes; provided,
however,
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subject to Section 12.14, nothing in this Section 4.04(c) shall require the
Lender to disclose any confidential information (including, without limitation,
its tax returns or its calculations).
SECTION 5. Conditions Precedent to Credit Events on the
Initial Borrowing Date. The obligation of the Lender to make each Loan hereunder
on the Initial Borrowing Date, is subject, at the time of the making of such
Loans, to the satisfaction of the following conditions:
5.01 Execution of Agreement; 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 Lender the Revolving Note executed by the
Borrower and in the amount, maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the
Lender shall have received a certificate from the Borrower Representative on
behalf of the Borrower, dated such date and signed by an Authorized Officer of
the Borrower, certifying that all of the applicable conditions set forth in
Sections 5.05 through 5.14, inclusive, and Sections 6.01, 6.03, 6.04 and 6.05,
have been or will be satisfied on such date.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
Lender shall have received from each special counsel to the Borrower, Parent and
Guarantors set forth in Schedule 5.03, an opinion or opinions addressed to the
Lender and dated the Initial Borrowing Date substantially in the form of Exhibit
D with such changes thereto as are appropriate in the jurisdiction to which such
opinion relates, in form, scope and substance reasonably satisfactory to the
Lender.
5.04 Company Documents. (a) On the Initial Borrowing Date, the
Lender shall have received from the Borrower Representative a certificate, dated
the Initial Borrowing Date, signed by the chairman, the president or any
vice-president of such Person, and attested to by the secretary, any assistant
secretary or other Authorized Officer of such Person, in the form of Exhibit E
with appropriate insertions, together with copies of the certificate of
incorporation, by-laws or equivalent organizational documents of such Person and
the resolutions of such Person referred to in such certificate, and all of the
foregoing (including each such certificate of incorporation, by-laws or other
organizational document) shall be reasonably satisfactory to the Lender.
(b) On the Initial Borrowing Date and after giving effect
to the Transaction, the capital structure (including, without limitation, the
terms of any capital stock, options, warrants or other securities issued by
Parent or its Subsidiaries) and management of Parent, the Borrower and their
respective Subsidiaries shall be in form and substance reasonably satisfactory
to the Lender.
5.05 Approvals. On or prior to the Initial Borrowing Date, (i)
all necessary governmental (domestic and foreign), regulatory and third party
approvals and/or consents, if any, in connection with the transactions
contemplated by the Credit Documents and otherwise referred to herein or therein
shall have been obtained and remain in full force and effect and evidence
thereof shall have been provided to the Lender, and (ii) all applicable waiting
periods, if any, shall have expired without any action being taken by any
competent authority which
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restrains, prevents or imposes materially adverse conditions upon the
consummation of the Transaction, the making of the Loans and the transactions
contemplated by the Credit Documents or otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon, or materially delaying, or making economically unfeasible, the
consummation of the Transaction or the making of the Loans or the other
transactions contemplated by the Credit Documents or otherwise referred to
herein or therein.
5.06 Refinancing. (a) On the Initial Borrowing Date, the total
commitments in respect of the Indebtedness to be Refinanced shall have been
terminated, and all loans with respect thereto shall have been repaid in full
with the proceeds of the initial Loan hereunder, together with interest thereon,
all letters of credit and bank guaranties issued thereunder shall have been
terminated and all other amounts owing pursuant to the Indebtedness to be
Refinanced shall have been repaid in full with the proceeds of the initial Loan
hereunder and all documents in respect of the Indebtedness to be Refinanced and
all guarantees with respect thereto shall have been terminated (except as to
indemnification provisions contained therein which by their express terms are
intended to survive such termination and as are reasonably satisfactory to the
Lender) and be of no further force and effect.
(b) On the Initial Borrowing Date, the creditors in
respect of the Indebtedness to be Refinanced shall have terminated and released
all security interests and Liens on the assets owned by Parent, the Borrower and
their respective Subsidiaries. The Lender shall have received such releases of
security interests in and Liens on the assets owned by Parent, the Borrower and
their respective Subsidiaries as may have been requested by the Lender, which
releases shall be in form, scope and substance reasonably satisfactory to the
Lender. Without limiting the foregoing, there shall have been delivered (i)
proper termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement (Form
UCC-1 or the appropriate equivalent) was filed with respect to Parent, the
Borrower or any of their respective Subsidiaries in connection with the security
interests created with respect to the Indebtedness to be Refinanced and the
documentation related thereto, (ii) termination or reassignment of any security
interest in, or Lien on, any patents, trademarks, copyrights, or similar
interests of Parent, the Borrower or any of their respective Subsidiaries on
which filings have been made, (iii) terminations of all mortgages, leasehold
mortgages, deeds of trust and leasehold deeds of trust created with respect to
property of Parent, the Borrower or any of their respective Subsidiaries, in
each case, to secure the obligations in respect of the Indebtedness to be
Refinanced, all of which such terminations shall be in form, scope and substance
reasonably satisfactory to the Lender and (iv) all collateral owned by Parent,
the Borrower or any of their respective Subsidiaries in the possession of any of
the creditors in respect of the Indebtedness to be Refinanced or any collateral
agent or trustee under any related security document shall have been returned to
Parent, the Borrowers or such Subsidiary.
(c) The Refinancing shall have been consummated in all
material respects in accordance with all applicable laws. On or prior to the
Initial Borrowing Date, the Lender shall have received true and correct copies
of all Refinancing Documents, certified as such by an appropriate officer of
Parent.
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(d) The Lender shall have received evidence in form,
scope and substance reasonably satisfactory to the Lender that the matters set
forth in this Section 5.06 have been satisfied on the Initial Borrowing Date.
5.07 Pledge Agreements. On the Initial Borrowing Date, each of
Parent, Baldwin Graphic and each Guarantor Parent shall have duly authorized,
executed and delivered the Pledge Agreement in the form of Exhibit G (as
amended, modified, restated and/or supplemented from time to time, the "Pledge
Agreement") and shall have delivered to the Lender, as Pledgee thereunder, all
of the Pledge Agreement Collateral, if any, referred to therein and then owned
by such Person, (x) endorsed in blank in the case of promissory notes
constituting Pledge Agreement Collateral and (y) together with executed and
undated transfer powers in the case of certificated Equity Interests
constituting Pledge Agreement Collateral, and the Pledge Agreement shall be in
full force and effect.
5.08 Security Agreements. On the Initial Borrowing Date, each
of Parent, Baldwin Graphic and each Guarantor Parent shall have duly authorized,
executed and delivered the Security Agreement in the form of Exhibit H (as
amended, modified, restated and/or supplemented from time to time, a "Security
Agreement" and collectively, the "Security Agreements") covering all of such
Person's present and future Security Agreement Collateral referred to therein,
together with:
(i) proper Financing Statements (Form UCC-1 or the
equivalent) fully executed (where required) for filing under the UCC or
in other appropriate filing offices of each jurisdiction as may be
necessary or, in the reasonable opinion of the Lender, desirable to
perfect the security interests purported to be created by the Security
Agreement;
(ii) certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, each of a recent date,
listing all effective financing statements that name any Credit Party
or any of its Subsidiaries as debtor and that are filed in the
jurisdictions referred to in clause (i) above, together with copies of
such other financing statements that name any Credit Party or any of
its Subsidiaries as debtor (none of which shall cover any of the
Collateral, except to the extent evidencing Permitted Liens or in
respect of which the Lender shall have received termination statements
(Form UCC-3) or such other termination statements as shall be required
by local law fully executed (where required) for filing);
(iii) evidence of the completion of all other recordings
and filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Lender, desirable to
perfect the security interests intended to be created by the Security
Agreement; and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Lender, desirable to create, maintain,
effect, perfect, preserve, maintain and protect the security interests
purported to be created by the Security Agreement have been taken;
and the Security Agreement and such other documents shall be in full force and
effect.
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5.09 Foreign Security Agreements. On the Initial Borrowing
Date, the Borrower and each Guarantor Subsidiary (other than the Baldwin
Graphic) shall have duly authorized, executed and delivered such security
agreements, documents and instruments as may be required by the Lender (based on
advice of local counsel), with the intent being that the Lender receive valid
and enforceable first priority, perfected security interests in all or
substantially all of the assets (including all tangible and intangible assets,
including receivables, contract rights, securities, inventory, equipment, real
estate, leasehold interests, vessels, insurances, and material patents,
trademarks and other intellectual property) owned by the Borrower or each
Guarantor Subsidiary (other than Baldwin Graphic) in which it is practicable (in
accordance with requirements of local law and taking into account such cost and
practicality considerations as may be agreed by the Lender) to obtain such
security interests (as determined by the Lender, based on advice of local
counsel). All security documentation to be executed and delivered by the
Borrower or a Guarantor Subsidiary (other than the Baldwin Graphic) pursuant to
the immediately preceding sentence (each, as amended, modified, restated and/or
supplemented from time to time, a "Foreign Security Agreement" and,
collectively, the "Foreign Security Agreements") shall (i) be prepared by local
counsel reasonably satisfactory to the Lender, (ii) be in form and substance
reasonably satisfactory to the Lender and (iii) be in full force and effect on
the Initial Borrowing Date. In connection with the execution and delivery of the
Foreign Security Agreements, the Borrower and the respective Guarantor
Subsidiaries (other than Baldwin Graphic) shall take such actions as may be
necessary or desirable under local law (as advised by local counsel) to create,
maintain, effect, perfect, preserve, maintain and protect the security interests
granted (or purported to be granted) thereby (including, without limitation,
taking actions analogous to those described in Section 5.08 with respect to the
Security Agreement Collateral described in the Security Agreement), in each case
to the extent customary in connection with secured transactions under the laws
of the respective jurisdiction or reasonably deemed necessary or desirable by
the Lender based on advice of local counsel.
5.10 Shareholders' Agreements; Management Agreements;
Collective Bargaining Agreements; Existing Indebtedness Agreements; Tax
Allocation Agreements. On or prior to the Initial Borrowing Date, there shall
have been made available to the Lender by the Borrower Representative true and
correct copies of the following documents, certified as such by the Borrower
Representative:
(i) all written agreements (including, without
limitation, shareholders' agreements, subscription agreements and
registration rights agreements) entered into by Parent or any of its
Subsidiaries governing the terms and relative rights of its capital
stock or other Equity Interests and any agreements entered into by
shareholders relating to any such entity with respect to its capital
stock or other Equity Interests (collectively, the "Shareholders'
Agreements");
(ii) all material written agreements (including employment
agreements but limited to those of executive management and division
presidents) entered into by Parent or any of its Subsidiaries with
respect to the management of Parent or any of its Subsidiaries after
giving effect to the Transaction (including consulting agreements and
other management advisory agreements) (collectively, the "Management
Agreements");
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(iii) all collective bargaining agreements applying or
relating to any employee of Parent or any of its Subsidiaries after
giving effect to the Transaction (collectively, the "Collective
Bargaining Agreements");
(iv) all agreements evidencing or relating to any Existing
Indebtedness of Parent or any of its Subsidiaries (collectively, the
"Existing Indebtedness Agreements");
(v) any tax sharing or tax allocation agreements entered
into by Parent or any of its Subsidiaries (collectively, the "Tax
Allocation Agreements");
(vi) the Purchase and Sale Agreements; and
(vii) the Reimbursement Agreements;
all of which Shareholders' Agreements, Management Agreements, Collective
Bargaining Agreements, Existing Indebtedness Agreements, Tax Allocation
Agreements and Purchase and Sale Agreements and Reimbursement Agreements shall
be in form and substance reasonably satisfactory to the Lender and shall be in
full force and effect on the Initial Borrowing Date.
5.11 Solvency Certificate; Insurance Certificates; etc. On or
before the Initial Borrowing Date, the Lender shall have received:
(a) a solvency certificate in the form of Exhibit H-1
from the chief financial officer and the chairman of the Borrower
Representative, dated the Initial Borrowing Date, and supporting the conclusion
that, after giving effect to the Transaction and the incurrence of all
financings contemplated herein, the Borrower (on a stand alone basis) and its
Subsidiaries (on a consolidated basis) and Parent and its Subsidiaries (on a
consolidated basis), in each case, are not insolvent and will not be rendered
insolvent by the indebtedness incurred in connection herewith, will not be left
with unreasonably small capital with which to engage in its or their respective
businesses and will not have incurred debts beyond its or their ability to pay
such debts as they mature and become due; and
(b) evidence of insurance complying with the requirements
of Section 8.03 for the business and properties of Parent and its Subsidiaries,
in scope, form and substance reasonably satisfactory to the Lender and naming
the Lender as an additional insured and/or loss payee, and stating that such
insurance shall not be canceled or materially revised without at least 30 days'
prior written notice by the insurer to the Lender.
5.12 Financial Statements; Pro Forma Financial Statements;
Projections. (a) On or prior to the Initial Borrowing Date, there shall have
been delivered to the Lender (i) true and correct copies of the financial
statements referred to in Section 7.10(b)(i), (ii) an unaudited pro forma
(calculated as if the Transaction had occurred on such date) consolidated
balance sheet of Parent and its Consolidated Subsidiaries as of March 31, 2003
and the related pro forma (calculated as if the Transaction had occurred on the
first day of the period covered thereby) statement of income for the
twelve-month period ended as of such date, after giving effect to the
Transaction and the incurrence of all Indebtedness contemplated herein and
prepared in accordance with Article 11 of Rule S-X under the Securities Act (the
"Pro Forma Financial Statements"), together with a related cash flow statement,
(iii) unaudited consolidated financial
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data of the Parent and its Consolidated Subsidiaries at, or for the fiscal year
of the Borrower ended on June 30, 2002 (i.e., consolidated statements of
revenue, EBIT and assets) and (iv) interim consolidated financial statements
(including income statements and balance sheets) of the Parent for each internal
accounting period ended after December 31, 2002 and continuing through May 31,
2003, which financial statements, Pro Forma Financial Statements, funds flow
statement and interim financial statements shall be reasonably satisfactory to
the Lender.
(b) On or prior to the Initial Borrowing Date, there
shall have been delivered to the Lender detailed projected consolidated
financial statements of Parent and its Consolidated Subsidiaries certified by
the Chief Financial Officer of Parent for the five fiscal years ended after the
Initial Borrowing Date (including, with respect to the fiscal year of Parent
ended June 30, 2003, for each fiscal quarter comprising such fiscal year) (the
"Projections"), which Projections (x) shall reflect the forecasted consolidated
financial conditions and income and expenses of Parent and its Consolidated
Subsidiaries after giving effect to the Transaction and the related financing
thereof and the other transactions contemplated hereby and (y) shall be
reasonably satisfactory in form and substance to the Lender.
5.13 Payment of Fees. On the Initial Borrowing Date, all
costs, fees and expenses, and all other compensation due to the Lender
(including, without limitation, legal fees and expenses) shall have been paid
out of the proceeds of the initial Loan hereunder to the extent then due.
5.14 Consent Letter. On the Initial Borrowing Date, the Lender
shall have received a letter from Samuel B. Fortenbaugh, Esq., substantially in
the form of Exhibit I, indicating his consent to his appointment by each Credit
Party as its agent to receive service of process.
5.15 Material Contracts. On or prior to the Initial Borrowing
Date, there shall have been made available to the Lender by the Borrower
Representative true and correct copies of the Material Contracts. Each Material
Contract shall be in form and substance satisfactory to the Lender, and be in
full force and effect. No default by any party to any Material Contract shall
have occurred which the Lender shall reasonably determine has had, or could
reasonably be likely to have (i) a Material Adverse Effect or (ii) a material
adverse effect on the Transaction.
5.16 Purchase and Sale Agreements. The transactions
contemplated by the Purchase and Sale Agreements to occur on the "Effective
Date" (as defined therein) shall have been consummated to the satisfaction of
the Lender.
5.17 Notice to Bank. For each Designated Account established
in the United Kingdom, France, Germany and Sweden, the Lender shall have
received an acknowledgement of the Notice to Bank from each account bank where
such Designated Account is established and maintained.
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SECTION 6. Conditions Precedent to All Credit Events. The
obligation of the Lender to make Loans or to issue a Letter of Credit is
subject, at the time of each Credit Event (except as hereinafter indicated), to
the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time
of each such Credit Event and immediately after giving effect thereto (i) there
shall exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in any Credit Document shall be true and correct
in all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior
to the making of each Loan, the Lender shall have received a Notice of Borrowing
meeting the requirements of Section 1.03.
(b) Prior to the issuance of each Letter of Credit, the
Lender shall have received a Letter of Credit Request meeting the requirements
of Section 1A.03.
6.03 Adverse Change, etc. Nothing shall have occurred since
June 30, 2002 (and the Lender shall have become aware of no facts, conditions or
other information not previously known) which the Lender shall reasonably
determine has had, or could reasonably be likely to have (i) a Material Adverse
Effect or (ii) a material adverse effect on the Transaction.
6.04 Litigation. There shall be no actions, suits, proceedings
or investigations pending or threatened (a) with respect to the Transaction or
any documentation executed in connection therewith (including any Credit
Document) or the transactions contemplated hereby and thereby, (b) with respect
to any Existing Indebtedness or (c) which the Lender shall determine could
reasonably be expected to have (i) a Material Adverse Effect or (ii) a material
adverse effect on the Transaction.
6.05 Eligible Accounts Receivable. The Lender shall have
received confirmation that there has been no change in the information provided
in the Notice of Borrowing with respect to the Eligible Accounts Receivable, in
form and substance satisfactory to the Lender.
6.06 Notice to Customers. The Lender shall have received
evidence reasonably satisfactory to it that the Credit Parties shall have
delivered a "Notice to Account Debtors" to each of the customers of such Credit
Parties.
6.07 Other Proceedings. All Company and other proceedings and
all documents, instruments and other legal matters in connection with the
Transaction and the Credit Documents shall be satisfactory in form and substance
to the Lender and its counsel and the Lender shall have received such other
documents, certificates and instruments relating to the Credit Documents or the
transactions contemplated hereby or thereby as it shall reasonably request, in
each case, in form and substance satisfactory to it.
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The occurrence of the Initial Borrowing Date and the
acceptance by the Borrower of each Borrowing shall constitute a representation
and warranty by each Credit Party to the Lender that all the conditions
specified in Section 5 (with respect to Credit Events occurring on the Initial
Borrowing Date) and Section 6 (with respect to the Credit Event specifically
described in said Section) and applicable to such Credit Event exist as of that
time.
SECTION 7. Representations and Warranties. In order to induce
the Lender to enter into this Agreement and to make the Loans and to issue the
Letters of Credit, each Credit Party makes the following representations and
warranties to, and agreements with, the Lender, in each case after giving effect
to the Transaction, all of which shall survive the execution and delivery of
this Agreement and the making of the Loans and the issuance of the Letters of
Credit (with the occurrence of the Initial Borrowing Date and each Credit Event
on or after the Initial Borrowing Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct in all material respects on and as of the Initial Borrowing
Date and on and as of the date of each such Credit Event, unless stated to
relate to a specific earlier date in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date):
7.01 Company Status. Each Credit Party and each Subsidiary
thereof (i) is a duly organized and validly existing Company in good standing
(or its equivalent) under the laws of the jurisdiction of its organization, (ii)
has the Company power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing (or its equivalent) in all jurisdictions where it is required to be so
qualified (or its equivalent) except where the failure to be so qualified could
not reasonably be expected to have a Material Adverse Effect.
7.02 Company Power and Authority. Each Credit Party has the
Company 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 Company action to authorize the execution, delivery and performance of
the Credit Documents to which it is a party. Each Credit Party 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 obligation of such Credit
Party enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
7.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a party,
nor compliance by any Credit Party with the terms and provisions thereof, nor
the consummation of the transactions contemplated herein or therein, (i) will
contravene any material provision of any applicable law, statute, rule or
regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Security
Documents) result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the material property or assets of Parent or any
of its Subsidiaries pursuant to
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the terms of any indenture, mortgage, deed of trust, loan agreement, credit
agreement, Customer Contract or any other material agreement, contract or
instrument to which Parent or any of its Subsidiaries is a party or by which it
or any of its material property or assets are bound or to which it may be
subject or (iii) will violate any provision of the certificate of incorporation,
by-laws, certificate of partnership, partnership agreement, certificate of
limited liability company, limited liability company agreement or equivalent
organizational document, as the case may be, of Parent or any of its
Subsidiaries.
7.04 Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of any Authorized Officer of any
Credit Party, threatened (i) with respect to any Credit Document, (ii) with
respect to the Transaction or any other Credit Document or (iii) that could
reasonably be expected to have a Material Adverse Effect. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the occurrence of any Credit Event.
7.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
the Loans shall be utilized by the Borrower on the Initial Borrowing Date solely
(x) to repay intercompany indebtedness of the Borrower to BAPC, (y) to pay fees
and expenses incurred in connection with the Transaction and (z) for general
corporate purposes of the Parent and its Subsidiaries.
(b) The Borrower is not engaged principally, or as one of
its important activities, in the business of extending credit for the purposes,
whether immediate, incidental or ultimate, of buying or carrying Margin Stock
and no part of the proceeds of the Loans will be used to purchase or carry any
Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof
nor the occurrence of any other Credit Event will violate or be inconsistent
with the provisions of Regulation T, Regulation U or Regulation X.
7.06 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
in connection with (i) the execution, delivery and performance by any Credit
Party of any Credit Document or (ii) the legality, validity, or, with respect to
any Credit Party, the binding effect or enforceability of any Credit Document.
7.07 Investment Company Act. No Credit Party or any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.08 Public Utility Holding Company Act. No Credit Party or
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
7.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
any Credit Party or any of its Subsidiaries in writing to the Lender (including,
without limitation, all information contained in the Credit Documents) for
purposes of or in connection with this Agreement, the other Credit
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Documents or any transaction contemplated herein or therein is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of any such Persons in writing to the 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 in any material respect at such
time in light of the circumstances under which such information was provided, it
being understood and agreed that for purposes of this Section 7.09, such factual
information shall not include the Projections or any projected financial
information contained in any financial projections or pro forma financial
statements delivered pursuant to Section 5.12 or Section 8.01(d).
7.10 Financial Condition; Financial Statements. (a) On and as
of the Initial Borrowing Date, on a pro forma basis after giving effect to the
Transaction and to all Indebtedness incurred, and to be incurred, and Liens
created, and to be created, by each Credit Party in connection therewith, with
respect to the Borrower (on a stand alone basis), Parent and its Subsidiaries
(on a consolidated basis), and the Borrower and its Subsidiaries (on a
consolidated basis) (x) the sum of the assets, at a fair valuation, of the
Borrower (on a stand alone basis), Parent and its Subsidiaries (on a
consolidated basis) and the Borrower and its Subsidiaries (on a consolidated
basis) will exceed its or their debts, (y) it has or they have not incurred nor
intended to, nor believes or believe that it or they will, incur debts beyond
its or their ability to pay such debts as such debts mature and (z) it or they
will have sufficient capital with which to conduct its or their business. For
purposes of this Section 7.10(a), "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual
or matured liability.
(b) (i) The audited consolidated statements of financial
condition of the Parent and its Consolidated Subsidiaries at June 30, 2000, June
30, 2001 and June 30, 2002 and the related consolidated statements of income and
cash flows and changes in shareholders' equity of the Parent and its
Consolidated Subsidiaries for the fiscal years ended on such dates, in each case
furnished to the Lender prior to the Initial Borrowing Date, present fairly in
all material respects the consolidated financial position of the Parent and its
Consolidated Subsidiaries at the date of said financial statements and the
results for the respective periods covered thereby and (ii) the Pro Forma
Financial Statements present a good faith estimate of the consolidated pro forma
financial condition of the Parent and its Consolidated Subsidiaries and the pro
forma results of operations of the Parent and its Consolidated Subsidiaries for
the respective periods covered thereby (after giving effect to the Transaction
at the date thereof or for the period covered thereby). All of the financial
statements referred to in clause (i) of the immediately preceding sentence have
been prepared in accordance with U.S. GAAP consistently applied except to the
extent provided in the notes to said financial statements.
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(c) Since June 30, 2002 (but after giving effect to the
Transaction as if same had occurred immediately prior thereto), nothing has
occurred that has had, or could reasonably be expected to have, a Material
Adverse Effect.
(d) Except as fully reflected in the financial statements
described in Section 7.10(b) and as otherwise permitted by Section 9.04, (i)
there were as of the Initial Borrowing Date (and after giving effect to any
Loans made on such date), no liabilities or obligations with respect to Parent
or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
and (ii) no Credit Party knows of any basis for the assertion against any Credit
Party or any of its Subsidiaries of any such liability or obligation which,
either individually or in the aggregate, has had, or could reasonably be
expected to have, a Material Adverse Effect.
(e) The Projections have been prepared on a basis
consistent with the financial statements referred to in Section 7.10(b) and are
based on good faith estimates and assumptions made by the management of Parent,
and on the Initial Borrowing Date, the Borrower believes that the Projections
are reasonable and attainable, it being recognized by the Lender that such
projections of 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 contained therein. There is no fact known
to any Authorized Officer of any Credit Party which has had, or could reasonably
be expected to have, a Material Adverse Effect, which has not been disclosed
herein or in such other documents, certificates and statements furnished to the
Lender for use in connection with the Transaction.
7.11 Security Interests. On and after the Initial Borrowing
Date, each of the Security Documents creates (or after the execution and
delivery thereof and any notices thereunder will create), as security for the
Obligations covered thereby, a valid and enforceable perfected security interest
in and Lien on all of the Collateral subject thereto, superior to and prior to
the rights of all third Persons, and subject to no Liens other than Permitted
Liens, in favor of the Lender (or such other trustee or sub-agent as may be
required or desired under local law). No filings or recordings are required in
order to perfect and/or render enforceable as against third parties the security
interests created under any Security Document except for filings or recordings
required in connection with any such Security Document which shall have been
made on or prior to the Initial Borrowing Date.
7.12 Compliance with ERISA. (a) Except to the extent that the
failure of any of the following to be true could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect; (i)
each Plan (and each related trust, insurance contract or fund) is in compliance
in all respects with its terms and in all respects with all applicable laws,
including, without limitation, ERISA and the Code; (ii) each Plan (and each
related trust, if any) which is intended to be qualified under Section 401(a) of
the Code has received a determination letter from the Internal Revenue Service
to the effect that it meets the requirements of Sections 401(a) and 501(a) of
the Code (or the sponsor has applied for such determination letter within the
remedial amendment period); (iii) no Reportable Event has occurred; (iv) to the
knowledge of any Authorized Officer of any Credit Party, no Multiemployer Plan
is insolvent or in reorganization; (v) no Plan has an Unfunded Current
Liability; (vi) no Plan which is subject to
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Section 412 of the Code or Section 302 of ERISA has an accumulated funding
deficiency, within the meaning of such sections of the Code or ERISA, or has
applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; (vii) all required contributions with
respect to a Plan and a Multiemployer Plan have been made; (viii) neither Parent
nor any Subsidiary of Parent nor any ERISA Affiliate has incurred any liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan or a Multiemployer Plan pursuant to Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or expects to incur any such liability under any of the
foregoing sections with respect to any Plan or a Multiemployer Plan; (ix) no
condition exists which presents a material risk to Parent or any Subsidiary of
Parent or any ERISA Affiliate of incurring a liability to or on account of a
Plan or a Multiemployer Plan pursuant to the foregoing provisions of ERISA and
the Code; (x) no involuntary proceedings have been instituted to terminate or
appoint a trustee to administer any Plan which is subject to Title IV of ERISA
and no other proceedings have been instituted to terminate or appoint a trustee
to administer any Plan which is subject to Title IV of ERISA which has resulted
in a material liability; (xi) no action, suit, proceeding, hearing, audit or
investigation with respect to the administration and operation or the investment
of assets of any Plan (other than routine claims for benefits) is pending,
expected or threatened; (xii) using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of Parent and its Subsidiaries and ERISA Affiliates to any
Multiemployer Plans in the event of a withdrawal therefrom, as of the close of
the most recent fiscal year of each such Multiemployer Plan ended prior to the
date of the most recent Credit Event would not exceed $1,000,000; (xiii) each
group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2)
of the Code) which covers or has covered employees or former employees of
Parent, any Subsidiary of Parent, or any ERISA Affiliate has at all times been
operated in compliance with the provisions of Part 6 of subtitle B of Title I of
ERISA and Section 4980B of the Code; (xiv) no lien imposed under the Code or
ERISA on the assets of Parent or any Subsidiary of Parent or any ERISA Affiliate
exists, is likely to arise on account of any Plan or any Multiemployer Plan; and
(xv) neither Parent nor any Subsidiary of Parent maintains or contributes to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees and/or other former employees (other than
as required by Section 601 of ERISA).
(b) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities, except to the extent that such noncompliances, individually or in
the aggregate, would not result in a Material Adverse Effect. All required
contributions with respect to a Foreign Pension Plan have been made. Neither
Parent nor any of its Subsidiaries has incurred any material outstanding
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Pension Plan, determined as of the end of
Parent's most recently ended fiscal year on the basis of actuarial assumptions,
each of which is reasonable, did not exceed the current value of the assets of
such Foreign Pension Plan allocable to such benefit liabilities or
alternatively, the Foreign Pension Plan is funded in compliance with applicable
law in all material respects and Parent and its Subsidiaries have established
adequate reserves for the
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present value of such accrued benefit liabilities under such Foreign Pension
Plan in the financial statements delivered pursuant to Section 8.01(b) and (c).
7.13 Capitalization. (a) On the Initial Borrowing Date and
after giving effect to the Transaction, the authorized capital stock of Parent
shall consist of 12,828,647 shares of Class A common stock, $0.01 par value per
share and 2,185,883 shares of Class B common stock, $0.01 par value per share
(such authorized shares of common stock, together with any subsequently
authorized shares of common stock of Parent, the "Parent Common Stock"), all of
which shares are issued and outstanding. All such outstanding shares have been
duly and validly issued, are fully paid and nonassessable and free of preemptive
rights. Except as set forth on Schedule 7.13, as of the Initial Borrowing Date,
Parent does not have outstanding any securities convertible into or exchangeable
for its capital stock or outstanding any rights to subscribe for or to purchase,
or any options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, its capital stock or any stock appreciation or similar
rights.
(b) On the Initial Borrowing Date and after giving effect
to the Transaction, the authorized capital stock of BAC shall consist of 3,000
shares of common stock, $0.01 par value per share (such authorized shares of
common stock, together with any subsequently authorized shares of common stock
of BAC, the "BAC Common Stock"), of which ten (10) shares are issued and
outstanding. All such outstanding shares have been duly and validly issued, are
fully paid and nonassessable and free of preemptive rights. As of the Initial
Borrowing Date, BAC does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock or any stock appreciation or
similar rights.
(c) On the Initial Borrowing Date and after giving effect
to the Transaction, the authorized capital stock of BEC shall consist of 3,000
shares of common stock, $1.00 par value per share (such authorized shares of
common stock, together with any subsequently authorized shares of common stock
of BEC, the "BEC Common Stock"), of which one hundred (100) shares are issued
and outstanding. All such outstanding shares have been duly and validly issued,
are fully paid and nonassessable and free of preemptive rights. As of the
Initial Borrowing Date, BEC does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock or any
stock appreciation or similar rights.
(d) On the Initial Borrowing Date and after giving effect
to the Transaction, the authorized capital stock of BAPC shall consist of 3,000
shares of common stock, $0.01 par value per share (such authorized shares of
common stock, together with any subsequently authorized shares of common stock
of BAPC, the "BAPC Common Stock"), of which ten (10) shares are issued and
outstanding. All such outstanding shares have been duly and validly issued, are
fully paid and nonassessable and free of preemptive rights. As of the Initial
Borrowing Date, BAPC does not have outstanding any securities convertible into
or exchange-
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able for its capital stock or outstanding any rights to subscribe for or to
purchase, or any options for the purchase of, or any agreement providing for the
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, its capital stock or any stock appreciation or
similar rights.
(e) On the Initial Borrowing Date and after giving effect
to the Transaction, the authorized capital stock of Baldwin Graphic shall
consist of 3,000 shares of common stock, $0.01 par value per share (such
authorized shares of common stock, together with any subsequently authorized
shares of common stock of Baldwin Graphic, the "Baldwin Graphic Common Stock"),
of which one hundred (100) shares are issued and outstanding. All such
outstanding shares have been duly and validly issued, are fully paid and
nonassessable and free of preemptive rights. As of the Initial Borrowing Date,
Baldwin Graphic does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock or any stock appreciation or
similar rights.
7.14 Subsidiaries. Schedule 7.14 correctly sets forth, as of
the Initial Borrowing Date and after giving effect to the Transaction, (i) the
percentage ownership (direct and indirect) of the Parent, each Guarantor Parent,
the Borrower and each Guarantor Subsidiary in each class of capital stock or
other Equity Interests of each of its Subsidiaries and also identifies the
direct owner thereof and (ii) the jurisdiction of organization of each such
Subsidiary. All outstanding shares of capital stock or other Equity Interests of
each Subsidiary of each of the Credit Parties have been duly and validly issued,
are fully paid and non-assessable. No Subsidiary of the Parent or any Guarantor
Parent or any Guarantor Subsidiary has outstanding any securities convertible
into or exchangeable for its capital stock or other Equity Interests or
outstanding any right to subscribe for or to purchase, or any options or
warrants for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its capital stock or other Equity Interests or any stock
appreciation or similar rights. Except as set forth on Schedule 7.14, as of the
Initial Borrowing Date, neither Parent nor any of its Subsidiaries owns or
holds, directly or indirectly, any capital stock or equity security of, or any
other Equity Interests in, any Person other than its Subsidiaries indicated on
Schedule 7.14.
7.15 Intellectual Property, etc. Each Credit Party and each of
its Subsidiaries owns or has the right to use all domestic and foreign patents,
trademarks, permits, domain names, service marks, trade names, copyrights,
licenses, franchises, inventions, trade secrets, proprietary information and
know-how of any type, whether or not written (including, but not limited to,
rights in computer programs and databases) and formulas, or other rights with
respect to the foregoing, and has obtained assignments of all leases, licenses
and other rights of whatever nature, in each case necessary for the conduct of
its business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, individually or in the aggregate,
could reasonably be expected to have, a Material Adverse Effect.
7.16 Compliance with Statutes; Agreements, etc. Each Credit
Party and each of its Subsidiaries is in compliance with (i) all applicable
statutes, regulations, rules and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in
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respect of the conduct of its business and the ownership of its property and
(ii) all contracts and agreements to which it is a party, except in each case
such non-compliances as could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
7.17 Environmental Matters. Except as set forth on Schedule
7.17 (a) Each Credit Party and each of its Subsidiaries is in compliance with,
and on the date of each Credit Event is in compliance with, all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws and no Credit Party or any of its Subsidiaries is liable for
any material penalties, fines or forfeitures for failure to comply with any of
the foregoing. There are no pending or past or, to the knowledge of any
Authorized Officer, threatened Environmental Claims against any Credit Party or
any of its Subsidiaries or any Real Property owned, leased or operated by any
Credit Party or any of its Subsidiaries (including any such claim arising out of
the ownership, lease or operation by Parent or any of its Subsidiaries of any
Real Property formerly owned, leased or operated by any Credit Party or any of
its Subsidiaries but no longer owned, leased or operated by any Credit Party or
any of its Subsidiaries). To the knowledge of any Authorized Officer of any
Credit Party, there are no facts, circumstances, conditions or occurrences on
any Real Property owned, leased or operated by any Credit Party or any of its
Subsidiaries (including, to the knowledge of an Authorized Officer, any Real
Property formerly owned, leased or operated by any Credit Party or any of its
Subsidiaries but no longer owned, leased or operated by any Credit Party or any
of its Subsidiaries) or on any property adjoining or in the vicinity of any such
Real Property that would reasonably be expected (i) to form the basis of an
Environmental Claim against any Credit Party or any of its Subsidiaries or any
such Real Property or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property by any Credit Party or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been
generated, used, treated or stored on, or transported by any Credit Party, or to
the knowledge of any Authorized Officer of any Credit Party, any other Person,
to or from, any Real Property owned, leased or operated by any Credit Party or
any of its Subsidiaries except in compliance with all applicable Environmental
Laws and in connection with the operation, use and maintenance of such Real
Property by such Credit Party's or such Subsidiary's business. Hazardous
Materials have not at any time been Released by any Credit Party, or to the
knowledge of any Authorized Officer of any Credit Party, any other Person, on or
from any Real Property owned, leased or operated by any Credit Party or any of
its Subsidiaries or by any person acting for or under contract to any Credit
Party or any of its Subsidiaries, or to the knowledge of any Credit Party, by
any other Person in respect of Real Property owned, leased or operated by any
Credit Party or any of its Subsidiaries (including, to the knowledge of any
Credit Party, any Real Property owned, leased or operated by any Credit Party or
any of its Subsidiaries but no longer owned, leased or operated by Parent or any
of its Subsidiaries), except in compliance with all applicable Environmental
Laws in all material respects.
(c) Notwithstanding anything to the contrary in this
Section 7.17, all of the representations made in this Section 7.17 shall only be
untrue if the aggregate effect of all conditions, failures, noncompliances,
penalties, fines, forfeitures, Environmental Claims, Hazardous Materials,
Releases and presence of underground storage tanks, in each case of the
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types described above, has had, or could reasonably be expected to have, a
Material Adverse Effect.
7.18 Properties. All Real Property owned by any Credit Party
or any of its Subsidiaries, and all material leaseholds leased by any Credit
Party or any of its Subsidiaries, in each case as of the Initial Borrowing Date
and after giving effect to the Transaction, and the nature of the interest
therein, is correctly set forth in Schedule 7.18. Each Credit Party and each of
its Subsidiaries has good and marketable title to, or a validly subsisting
leasehold interest in, all material properties owned or leased by it, including
all Real Property reflected in the financial statements (including the Pro Forma
Financial Statements) referred to in Section 7.10(b), free and clear of all
Liens, other than Permitted Liens.
7.19 Labor Relations. No Credit Party or any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect. There is (i) no unfair labor practice complaint pending against any
Credit Party or any of its Subsidiaries or, to the knowledge of any Authorized
Officer, threatened against any of them, before the National Labor Relations
Board or any similar foreign tribunal or agency, and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against any Credit Party or any of its Subsidiaries or, to the knowledge
of any Authorized Officer, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against any Credit Party or any of its
Subsidiaries or, to the knowledge of any Authorized Officer, threatened against
any Credit Party or any of its Subsidiaries and (iii) no union representation
question is existing with respect to the employees of any Credit Party or any of
its Subsidiaries and no union organizing activities are taking place, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as has not had, or could reasonably be
expected to have, a Material Adverse Effect.
7.20 Tax Returns and Payments. Each Credit Party and each of
its Subsidiaries has timely filed with the appropriate taxing authority, all
material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of each Credit Party and each of its Subsidiaries. The Returns accurately
reflect in all material respects all liability for taxes of each Credit Party
and each of its Subsidiaries as a whole for the periods covered thereby. Each
Credit Party and each of its Subsidiaries have paid all material taxes payable
by them other than those contested in good faith and adequately disclosed and
for which adequate reserves have been established in accordance with U.S. GAAP.
There is no action, suit, proceeding, investigation, audit, or claim now pending
or, to the knowledge of any Authorized Officer of any Credit Party, threatened
by any authority regarding any taxes relating to each Credit Party and each of
its Subsidiaries. No Credit Party or any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of any Credit Party or any of its Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of any
Credit Party or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations.
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7.21 Insurance. Schedule 7.21 hereto is a true, correct and
complete summary of all insurance maintained by each Credit Party and its
Subsidiaries on and as of the Initial Borrowing Date, with the amounts insured
(and any deductibles) set forth therein.
7.22 Material Contract. (a) Each of the contracts with respect
to the Permitted Business of a Credit Party or its Subsidiaries pursuant to
which a Credit Party or its Subsidiary sells products or services to a customer
(each, a "Customer Contract") is entered into by the relevant Credit Party or
Subsidiary in the ordinary course of its business in accordance with applicable
law and prudent commercial practices, contains standard commercial terms and
conditions and all payments under any and all such contracts are made to the
applicable Original Account pursuant to the terms of such contracts and/or
related invoice. As of the Initial Borrowing Date, Schedule 7.22 hereto is a
true, correct and complete list of all Customer Contracts the aggregate value of
which to each customer exceeds $750,000 on an annual basis (the "Material
Contracts"), and a true, correct and complete copy of each such Material
Contract has been provided to the Lender.
(b) The Credit Parties and, to the best of their
knowledge, each of the Account Debtors, are in compliance in all material
respects with the terms and conditions of the Customer Contracts to which it is
a party, and, to the best of the knowledge of the Credit Parties, no event has
occurred that could reasonably be expected to (A) result in an event of default
under, or a material breach of, any Customer Contract, (B) result in the
revocation, termination or adverse modification of any Customer Contract or (C)
affect the rights of the Credit Parties under any Customer Contract, in each
case in a manner which could reasonably be expected to have a Material Adverse
Effect.
7.23 Existing Indebtedness. Schedule 7.23 sets forth a true
and complete list of all Indebtedness of the Credit Parties and the amount
thereof immediately prior to the Effective Date. Except as set forth in Schedule
7.23, all Indebtedness of the Credit Parties will be Refinanced and repaid in
full on the Initial Borrowing Date and all commitments in respect thereof and
all Liens and guaranties in connection therewith will be terminated, and no
Person shall have any claim for any Indebtedness against any Credit Party or any
of its Subsidiaries and no Credit Party or any of its Subsidiaries shall have
any further obligations with respect thereto once terminated.
7.24 No Burdensome Restrictions. No Contractual Obligations of
any Credit Party could reasonably be expected to have Material Adverse Effect.
7.25 Status Under Certain Federal Statutes. No Credit Party is
a "national of any designated foreign country," within the meaning of the
Foreign Assets Control Regulations or the Cuban Assets Control Regulations of
the United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as
amended, or any regulations or rulings issued thereunder. Neither the making of
the Loans nor the use of such proceeds by the Borrower as required by this
Agreement will violate the Foreign Assets Control Regulations, the Foreign Funds
Control Regulations, the Transaction Control Regulations, the Cuban Assets
Control Regulations, the Iranian Assets Control Regulations, the Libyan
Sanctions Regulations, the Iranian Transactions Regulations, the Iraqi Sanctions
Regulations, the Haitian Transactions Regulations, or any other regulations of
the
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U.S. Treasury Department (as set forth in 31 C.F.R., Subtitle B, Chapter V, as
amended), or any of Executive Orders 12,722, 12,724, 12,808 and 12,810 of the
President of the United States.
7.26 German Money Laundering Act. The Borrower is the
beneficiary (within the meaning of Section 8 of the German Money Laundering Act
(Gesetz uber das Aufspuren von Gewinnen aus schweren Straftaten
(Geldwaschegesetz)) for each Loan made or to be made available to the Borrower
hereunder.
7.27 Dutch PMP Representation. The Borrower has verified the
status of the Lender, and the Lender is either (i) a PMP in accordance with the
requirements of the Exemption Regulation and the Policy Guidelines and/or (ii)
it forms a closed circle (besloten kring) within the meaning of the Exemption
Regulation and the Policy Guidelines with the Borrower.
7.28 Status of Accounts. (a) Each Account and Japanese Note is
based on an actual and bona fide lease or sale or delivery of goods or rendition
of services to customers made by the Credit Parties or their Subsidiaries in the
ordinary course of business. The goods and inventory being sold or leased and
the Accounts and Japanese Notes created are the properties of the relevant
Credit Parties and are not and shall not be subject to any Lien, consignment,
encumbrance, security interest or financing statement whatsoever other than the
Liens created pursuant to the Credit Documents and Permitted Liens, and, except
as otherwise reported or reserved against on any of the Credit Party's or its
Subsidiaries' books and records or to the extent excluded from the Borrowing
Base, the customers of the Credit Parties have accepted the goods or services,
owe and are obligated to pay the full amounts stated in the invoices according
to their terms, without dispute, offset, defense or counterclaim.
(b) Schedule 7.28 sets forth a true, complete and correct
list of the bank account(s) of each Credit Party in existence as of the
Effective Date to which a customer of such Credit Party is currently instructed
to make payment pursuant to the terms of the applicable Customer Contract and/or
invoice (the "Original Accounts").
SECTION 8. Affirmative Covenants. Each Credit Party hereby,
jointly and severally, covenants and agrees that, unless otherwise agreed by the
Lender in writing, as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Commitment has been terminated, and the
Loans, Revolving Notes, Letters of Credit, together with interest, Fees and all
other Obligations incurred hereunder, are paid in full:
8.01 Information Covenants. The Borrower Representative will
furnish, or will cause to be furnished, to the Lender:
(a) Monthly Reports. Within 45 days after the close of
each calendar month, a management prepared balance sheet of the Parent
and its Consolidated Subsidiaries and a balance sheet of each Credit
Party as at the end of such month and the related statements of income
and of cash flow for such monthly accounting period, and of changes in
shareholder's equity of each of the Credit Parties, and in each case,
setting forth comparative figures for the corresponding monthly
accounting period, all in reasonable detail and certified by the senior
financial officer or other Authorized Officer of Parent that they
fairly present in all material respects in accordance with U.S. GAAP
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the financial condition of Parent and its Consolidated Subsidiaries and
each Credit Party as of the dates indicated and the results of their
operations and/or changes in their cash flows for the periods
indicated, subject to normal year-end audit adjustments and the absence
of footnotes.
(b) Quarterly Financial Statements. On September 30, 2003
and thereafter, within 45 days after the close of the first three
quarterly accounting periods in each fiscal year of Parent (as may be
extended to the extent requested by the Parent and approved by the
SEC), (i) the consolidated balance sheet of Parent and its Consolidated
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated statements of income and of cash flows for such
quarterly accounting period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly accounting period, in
each case (commencing with the financial statements to be delivered in
respect of the 1st fiscal quarter of fiscal year 2004) setting forth
comparative figures for the corresponding quarterly accounting period
in the prior fiscal year and the budgeted figures for such quarterly
period as set forth in the respective financial projections theretofore
delivered pursuant to Section 8.01(d) (unless such quarterly period
occurs prior to the delivery (or required delivery) of the first
financial projections pursuant to Section 8.01(d) which include such
quarterly accounting period), and be certified by the senior financial
officer or other Authorized Officer of Parent that they fairly present
in all material respects in accordance with U.S. GAAP the financial
condition of Parent and its Consolidated Subsidiaries as of the dates
indicated and the results of their operations and/or changes in their
cash flows for the periods indicated, subject to normal year-end audit
adjustments and the absence of footnotes and (ii) management's
discussion and analysis of the important operational and financial
developments during such quarterly accounting period.
(c) Annual Financial Statements. Within 90 days after the
close of each fiscal year of Parent (as may be extended to the extent
requested by the Parent and approved by the SEC), (i) the consolidated
balance sheet of Parent and its Consolidated Subsidiaries as at the end
of such fiscal year and the related consolidated statements of income
and stockholders' equity and of cash flows for such fiscal year (and
commencing with the financial statements to be delivered in respect of
fiscal year 2004) and setting forth comparative consolidated figures
for the preceding fiscal year and comparable budgeted figures for such
fiscal year as set forth in the respective financial projections
delivered pursuant to Section 8.01(d), together with a certification by
Pricewaterhouse Coopers or such other independent certified public
accountants of recognized national standing as shall be acceptable to
the Lender, in each case to the effect that (I) such statements fairly
present in all material respects the financial condition of Parent and
its Consolidated Subsidiaries as of the dates indicated and the results
of their operations and changes in financial position for the periods
indicated in conformity with U.S. GAAP applied on a basis consistent
with prior years and (II) in the course of its regular audit of the
business of Parent and its Consolidated Subsidiaries, which audit was
conducted in accordance with U.S. GAAP (and made without qualification
or expression of uncertainty, in each case as to going concern), no
Default or Event of Default which has occurred and is continuing has
come to their attention or, if such a Default or an Event of Default
has come to their attention, a statement as to the nature thereof, and
(ii) management's
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discussion and analysis of the important operational and financial
developments during such fiscal year.
(d) Financial Projections, etc. Not more than 45 days
after the commencement of each fiscal year of Parent (beginning with
fiscal year 2005), financial projections in form reasonably
satisfactory to the Lender prepared by Parent (i) for each of the four
fiscal quarters of such fiscal year prepared in detail and (ii) for
each of the immediately succeeding three fiscal years prepared in
summary form, in each case, on a consolidated basis, for Parent and its
Consolidated Subsidiaries and setting forth, with appropriate
discussion, the principal assumptions upon which such financial
projections are based.
(e) Officer's Certificates. At the time of the delivery
of the financial statements provided for in Sections 8.01(a), (b) and
(c), a certificate of the Chief Financial Officer or other Authorized
Officer of the Borrower Representative to the effect that 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 certify that there have been no changes to Annexes A through K of
the Security Agreement, Annexes A through B of the Pledge Agreement and
the annexes or schedules to any other Security Document, in each case
since the Initial Borrowing Date or, if later, since the date of the
most recent certificate delivered pursuant to this Section 8.01(e), or
if there have been any such changes, a list in reasonable detail of
such changes and whether the Credit Parties have otherwise taken all
actions required to be taken by them pursuant to such Security
Documents in connection with any such changes.
(f) Notice of Default or Litigation. Promptly, and in any
event within five Business Days after an Authorized Officer of any
Credit Party obtains knowledge thereof, notice of (i) the occurrence of
any event which constitutes a Default or an Event of Default, which
notice shall specify the nature and period of existence thereof and
what action the Credit Parties or their Subsidiaries propose to take
with respect thereto, (ii) any litigation or proceeding pending or
threatened against any Credit Party or any of its Subsidiaries which
has had, or could reasonably be expected to have, a Material Adverse
Effect, (iii) any material governmental investigation pending or
threatened against any Credit Party or any of its Subsidiaries and (iv)
any other event, change or circumstance which has had, or could
reasonably be expected to have, a Material Adverse Effect.
(g) Management Letters. Promptly upon receipt thereof, a
copy of any "management letter" submitted to any Credit Party or any of
its Subsidiaries by its independent accountants in connection with any
annual, interim or special audit made by them of the financial
statements of any Credit Party or any of its Subsidiaries and
management's responses thereto.
(h) Environmental Matters. Within five Business Days
after an Authorized Officer of any Credit Party obtains knowledge of
any of the following (but only to the extent that any of the following,
either individually or in the aggregate, has had, or could reasonably
be expected to have (a) a Material Adverse Effect or (b) a remedial
cost to any Credit Party or any of its Subsidiaries in excess of
$1,000,000), written notice of:
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(i) any pending or threatened Environmental
Claim against any Credit Party or any of its Subsidiaries or
any Real Property owned, leased or operated by any Credit
Party or any of its Subsidiaries;
(ii) any condition or occurrence on any Real
Property owned, leased or operated by any Credit Party or any
of its Subsidiaries that (x) results in noncompliance by any
Credit Party or any of its Subsidiaries with any applicable
Environmental Law or (y) could reasonably be anticipated to
form the basis of an Environmental Claim against any Credit
Party or any of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real
Property owned, leased or operated by any Credit Party or any
of its Subsidiaries that could reasonably be anticipated to
cause such Real Property to be subject to any restrictions on
the ownership, lease, occupancy, use or transferability by any
Credit Party or such Subsidiary, as the case may be, of its
interest in such Real Property under any Environmental Law;
and
(iv) 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 any
Credit Party or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and the relevant Credit Party's response or proposed response
thereto. In addition, the Borrower Representative agrees to provide the
Lender with copies of such detailed reports relating to any of the
matters set forth in clauses (i)-(iv) above as may reasonably be
requested by the Lender.
(i) Reports. Within 3 Business Days following
transmission thereof, copies of any filings and registrations with, and
reports to, the SEC by Parent or any of its Subsidiaries and copies of
all financial statements, proxy statements, notices and reports as
Parent or any of its Subsidiaries shall send generally to the holders
of Indebtedness or (following the public issuance of Equity Interests
of Parent or any of its Subsidiaries) their Equity Interests in their
capacity as such holders (to the extent not theretofore delivered to
the Lender pursuant to this Agreement).
(j) New Subsidiaries; etc. Within 45 days after the close
of each of the first three fiscal quarters of each fiscal year of
Parent and within 90 days after the close of each fiscal year of
Parent, (x) a list showing each Subsidiary of Parent which has not
theretofore become party to any Security Document, and (y) a list
showing each Subsidiary of Parent established, created or acquired
during the respective fiscal quarter or fiscal year, and each
Subsidiary which has had any Equity Interests transferred during the
respective fiscal quarter or fiscal year (in each case describing in
reasonable detail the respective transfer of Equity Interests), in each
case naming the direct owner of all Equity Interests in such Subsidiary
and describing such Equity Interests in reasonable detail, and
certifying that each such Subsidiary, and each Credit Party which owns
any Equity
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Interests therein, has taken all actions, if any, required pursuant to
this Agreement and the relevant Security Documents.
(k) Annual Meetings with Lender. At the request of the
Lender, Parent shall, within 120 days after the close of each fiscal
year of Parent (beginning with the fiscal year ended June 30, 2003),
hold a meeting (which may be by conference call or teleconference), at
a time and place selected by Parent and reasonably acceptable to the
Lender, to review the financial results of the previous fiscal year and
the financial condition of Parent and its Subsidiaries and the budgets
presented for the current fiscal year of Parent and its Subsidiaries.
(l) Hedging Arrangements. At the time of the delivery of
the financial statements provided for in Sections 8.01(a), (b) and (c),
a schedule of all Interest Rate Protection Agreements and Other Hedging
Agreements entered into by Parent or any of its Subsidiaries with the
Lender and/or any of its affiliates, if any.
(m) Borrowing Base Certificate. Within 15 Business Days
after the end of each calendar month:
(i) a Borrowing Base Certificate accompanied by
such supporting detail and documentation as shall be requested
by Lender in its reasonable discretion;
(ii) with respect to each Credit Party, a monthly
trial balance showing accounts outstanding aged from invoice
date as follows: 1 to 30 days, 31 to 60 days, 61 to 90 days
and 91 days or more, accompanied by such supporting detail and
documentation as shall be requested by Lender in its
reasonable discretion; and
(iii) with respect to each Credit Party, a monthly
inventory summary of such Credit Party specifying amount of
raw materials, work in progress and finished inventory,
accompanied by such supporting detail and documentation as
shall be requested by Lender in its reasonable discretion.
(n) Aging Report and Inventory Report. At the time of the
delivery of the financial statements provided in Section 8.01(b), (i)
an aging of accounts payable and a reconciliation of such accounts
payable aging to the Credit Parties' general ledger and monthly
financial statements delivered pursuant to Section 8.01(a), and (ii) a
reconciliation of the most recent Borrowing Base Certificate and
general ledger and month-end inventory reports of Credit Parties to
such Credit Party's general ledger and monthly financial statements
delivered pursuant to Section 8.01(a), in each case accompanied by such
supporting detail and documentation as may be requested by Lender in
its reasonable discretion.
(o) German Money Laundering Act. Promptly, if the
Borrower is not, or ceases to be, the beneficiary of the Loan as
described in Section 7.26, the name and the address of the beneficiary
of the Loan.
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(p) Disclosed EBITDA. Commencing the second fiscal
quarter of fiscal year 2004, no more than two Business Days prior to
any Interest Determination Date relevant for such fiscal quarter and
each succeeding fiscal quarter, the Disclosed EBITDA of the Parent for
such fiscal quarter.
(q) Daily Balance Information. For the period from and
after the Effective Date and until the Lender shall have received
acknowledgments of each Notice to Account Debtor, no later than 5:00
p.m. of each Business Day, the account balance of each Designated
Account and the aggregate amount of all Accounts of the Credit Parties
and Baldwin France and the Japanese Note.
(r) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to any
Credit Party or any of its Subsidiaries as the Lender may reasonably
request.
8.02 Books, Records and Inspections; Servicing Agreement. (a)
Each Credit Party will, and will cause each of its Subsidiaries to, keep proper
books of record and accounts in which full, true and correct entries which
permit the preparation of financial statements in accordance with U.S. GAAP (and
with respect to any Credit Party incorporated outside the U.S.A., generally
accepted accounting standards of the relevant jurisdiction and reconciled to
U.S. GAAP for year-end audited financial statements) and which conform to all
requirements of law, shall be made of all dealings and transactions in relation
to its business and activities. Each Credit Party will, and will cause each of
its Subsidiaries to, permit officers and designated representatives of the
Lender, to visit and inspect, under guidance of officers of such Credit Party or
such Subsidiary, any of the properties of such Credit Party or such Subsidiary,
and to examine the books of account of such Credit Party or such Subsidiary and
discuss the affairs, finances and accounts of such Credit Party or such
Subsidiary with, and be advised as to the same by, its and their officers and
independent accountants, all upon reasonable prior notice and at such reasonable
times and intervals and to such reasonable extent as the Lender may reasonably
request.
(b) On or after the 45th day following the Initial
Borrowing Date, at the request of the Lender and at the reasonable expense of
the Borrower, the Credit Parties will, no later than 30 days after the date of
such request, enter into an agreement with a third party service provider
selected by the Lender and reasonably acceptable to the Borrower Representative
to monitor the record of accounts and Accounts of the Credit Parties and Baldwin
France and the Japanese Notes, which agreement shall be in form and substance
satisfactory to the Lender.
8.03 Insurance. (a) Each Credit Party will, and will cause
each of its Subsidiaries to, (i) maintain, (x) with financially sound and
reputable insurance companies, insurance on all its property in at least such
amounts and against at least such risks as is consistent and in accordance with
industry practice for companies similarly situated and (y) with Gerling NCM
Credit Insurance Inc. or such other financially sound and reputable insurance
companies acceptable to the Lender, credit insurance with respect to all Account
Debtors whose Accounts or the Japanese Notes are to be included as Eligible
Accounts Receivables against such credit risk as is consistent and in accordance
with industry standard, in form and substance satisfactory to the Lender (the
"Credit Insurance") and (ii) furnish to the Lender full information
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as to the insurance carried. Such insurance shall in any event include physical
damage insurance on all material real and personal property (whether now owned
or hereafter acquired) on an all risk basis and business interruption insurance.
(b) Each Credit Party will at all times keep the
respective property of such Credit Party insured in favor of the Lender, and all
policies or certificates with respect to such insurance (i) shall be endorsed to
the Lender's satisfaction for the benefit of the Lender (including, without
limitation, by naming the Lender as certificate holder, mortgagee and loss payee
with respect to real property, certificate holder and loss payee with respect to
personal property, additional insured with respect to general liability and
umbrella liability coverage, certificate holder with respect to workers'
compensation insurance and certificate holder and loss payee with respect to
Credit Insurance), (ii) shall state that such insurance policies shall not be
canceled or materially changed without at least 30 days' prior written notice
thereof by the respective insurer to the Lender and (iii) shall be deposited
with the Lender.
(c) If any Credit Party shall fail to maintain all
insurance in accordance with Section 8.03(a), or if any Credit Party shall fail
to so name the Lender as an additional insured or loss payee, as the case may
be, or so deposit all certificates with respect thereto in accordance with
Section 8.03(b), the Lender shall have the right (but shall be under no
obligation), upon ten Business Days' notice to the Borrower Representative, to
procure such insurance, and the Credit Parties agree jointly and severally to
reimburse the Lender, for all costs and expenses of procuring such insurance.
8.04 Payment of Taxes. Each Credit Party 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, in each case on a
timely basis, and all lawful claims which, if unpaid, might become a lien or
charge upon any properties of the Credit Parties or any of their Subsidiaries
not otherwise permitted under Section 9.03(i); provided that no Credit Party or
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 U.S. GAAP.
8.05 Existence; Franchises. Each Credit Party 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 existence and its
rights, franchises, authorities to do business, licenses, certifications,
accreditations and patents except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
8.06 Compliance with Statutes; etc. (a) Each Credit Party
will, and will cause each of its Subsidiaries to, comply 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, except for such noncompliances as,
individually or in the aggregate, have not had, and could not reasonably be
expected to have, a Material Adverse Effect.
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(b) Within 5 Business Days after each Credit Party is
required by applicable law, statute, rule or regulation, such Credit Party shall
file (or cause to be filed) with the SEC all reports, financial information and
certifications required by applicable law, statute, rule or regulation.
8.07 Compliance with Environmental Laws. (a) (i) Each Credit
Party will comply, and will cause each of its Subsidiaries to comply, in all
material respects with all Environmental Laws applicable to the ownership or use
of its Real Property now or hereafter owned, leased or operated by such Credit
Party or any of its Subsidiaries, will promptly pay or cause to be paid all
costs and expenses incurred in connection with such compliance, and will keep or
cause to be kept all such Real Property free and clear of any Liens imposed
pursuant to such Environmental Laws and (ii) neither any Credit Party nor any of
its Subsidiaries will generate, use, treat, store, Release or dispose of, or
permit the generation, use, treatment, storage, Release or disposal of,
Hazardous Materials on any Real Property owned, leased or operated by such
Credit Party or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property, except
as required in the ordinary course of business of any Credit Party and its
Subsidiaries as conducted on the Effective Date and as allowed by (and in
compliance with) applicable law or regulation and except for any failures to
comply with the requirements specified in clause (i) or (ii) above, which,
either individually or in the aggregate, have not had, and could not reasonably
be expected to have, a Material Adverse Effect. If any Credit Party or any of
its Subsidiaries, or any tenant or occupant of any Real Property owned, leased
or operated by any Credit Party or any of its Subsidiaries, causes or permits
any intentional or unintentional act or omission resulting in the presence or
Release of any Hazardous Material (except in compliance with applicable
Environmental Laws), each Credit Party agrees to undertake, and/or to cause any
of its Subsidiaries, tenants or occupants to undertake, at their sole expense,
any clean up, removal, remedial or other action required pursuant to
Environmental Laws to remove and clean up any Hazardous Materials from any Real
Property except where the failure to do so has not had, and could not reasonably
be expected to have, a Material Adverse Effect.
(b) In the event that the Lender reasonably believes that
the Credit Parties are in breach of Section 8.07, then at the written request of
the Lender, which request shall specify in reasonable detail the basis therefor,
at any time and from time to time, the Credit Parties will provide, at their
sole cost and expense, an environmental site assessment report concerning the
relevant Real Property which is now or hereafter owned, leased or operated by
any Credit Party or any of its Subsidiaries, prepared by an environmental
consulting firm reasonably approved by the Lender, addressing the matters which
gave rise to such request and estimating the potential costs of any removal,
remedial or other corrective action in connection with any such matter. If a
Credit Party fails to provide the same within 45 days after such request was
made, the Lender may order the same, and the Credit Parties shall grant and
hereby do grant, to the Lender and its agents, access to such Real Property and
specifically grant the Lender and its agents an irrevocable non-exclusive
license, subject to the right of tenants, to undertake such an assessment, all
at the Credit Parties' joint and several expense.
8.08 ERISA. As soon as possible and, in any event, within ten
(10) Business Days after any Credit Party, any Subsidiary of any Credit Party or
any ERISA Affiliate knows or has reason to know of the occurrence of any of the
following, Parent will deliver to the Lender
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written notice of the chief financial officer, vice president of human resources
or other Authorized Officer of the Borrowing Parent setting forth, in reasonable
detail, such occurrence and the action, if any, that such Credit Party, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed by such Credit
Party, such Subsidiary, the Plan administrator or such ERISA Affiliate to or
with, the PBGC or any other governmental agency, or a Plan or Multiemployer Plan
participant, and any notices received by such Credit Party, such Subsidiary or
ERISA Affiliate from the PBGC or other governmental agency or a Plan or
Multiemployer Plan participant or the Plan administrator with respect thereto:
that a Reportable Event has occurred (except to the extent that Parent has
previously delivered to the Lender a notice (if any) concerning such event
pursuant to the next clause hereof); that a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject
to the advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(1) thereof), and an event described in subsection
..62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is
reasonably expected to occur with respect to such Plan within the following 30
days; that an accumulated funding deficiency, within the meaning of Section 412
of the Code or Section 302 of ERISA, has been incurred or an application may be
or has been made for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code or Section 303 or 304 of ERISA
with respect to a Plan or Multiemployer Plan; that any contribution required to
be made with respect to a Plan or Multiemployer Plan or Foreign Pension Plan has
not been timely made; that a Plan or Multiemployer Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan or Multiemployer Plan has a material Unfunded Current
Liability; that involuntary proceedings are reasonably expected to be or have
been instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA or any other proceedings which are reasonably
expected to be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV or ERISA which has resulted in a
material liability; that a proceeding has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Plan or Multiemployer
Plan; that any Credit Party, any Subsidiary of any Credit Party or any ERISA
Affiliate will or is reasonably expected to incur any material liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan or Multiemployer Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan or
Multiemployer Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or
Section 409 or 502(i) or 502(l) of ERISA or with respect to a group health plan
(as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that any Credit Party or any Subsidiary of any
Credit Party is reasonably expected to incur any liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan in
addition to the liability that existed on the Initial Borrowing Date pursuant to
any such plan or plans by an amount that could reasonably be expected to result
in a Material Adverse Effect. To the extent that the financial statements of any
Credit Party or any Subsidiary of any Credit Party set forth with particularity
a liability for which notice would otherwise be required to be given hereunder,
a separate notice thereof to the Lender shall not be required hereunder. Parent
will deliver upon written request to the Lender a complete copy of the annual
report (on Internal Revenue Service Form 5500-series) of each Plan
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(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service. In addition to any notices delivered to the Lender pursuant to the
first sentence hereof, copies of any records, documents or other information
required to be furnished to the PBGC or any other government agency, and any
material notices received by Parent, any Subsidiary of any other Credit Party or
any ERISA Affiliate with respect to any Plan or Foreign Pension Plan or received
from any government agency or plan administrator or sponsor or trustee with
respect to any Multiemployer Plan, shall, upon request of the Lender, be
delivered to the Lender no later than ten (10) Business Days after the date of
such request. Each Credit Party and each of its applicable Subsidiaries shall
ensure that all Foreign Pension Plans administered by it or into which it makes
payments obtain or retain (as applicable) registered status under and as
required by applicable law and is administered in a timely manner in all
respects in compliance with all applicable laws except where the failure to do
any of the foregoing has not had, and could not reasonably be expected to have,
a Material Adverse Effect.
8.09 Good Repair. Each Credit Party will, and will cause each
of its Subsidiaries to, ensure that its material properties and equipment
required to be used in its business are kept in reasonably good repair, working
order and condition, ordinary wear and tear excepted, and that from time to time
there are made to such properties and equipment all needful and proper repairs,
renewals, replacements, extensions, additions, betterments and improvements
thereto, to the extent and in the manner useful or customary for companies in
similar businesses.
8.10 Further Assurances. (a) Each Credit Party will, at its
own expense, make, execute, endorse, acknowledge, file and/or deliver to the
Lender from time to time such vouchers, invoices, schedules, confirmatory
assignments, confirmatory conveyances, financing statements, transfer
endorsements, confirmatory powers of attorney, certificates, reports and other
assurances or confirmatory instruments and take such further steps relating to
the Collateral covered by any of the Security Documents and consistent with the
terms of the Credit Documents as the Lender may reasonably require pursuant to
this Section 8.10. Furthermore, each Credit Party will cause to be delivered to
the Lender such opinions of counsel and other related documents as may be
reasonably requested by the Lender to assure itself that this Section 8.10 has
been complied with.
(b) If at any time any Subsidiary of Parent is created,
established or acquired, such Subsidiary shall be required to execute and
deliver counterparts of such Security Documents as would have been entered into
by such Subsidiary if same had been a Subsidiary on the Initial Borrowing Date,
and in each case shall take all action in connection therewith as would
otherwise have been required to be taken pursuant to Section 5.
(c) In addition to the requirements contained in the
Pledge Agreements, each Credit Party agrees to pledge and deliver, or cause to
be pledged and delivered, all of the Equity Interests owned by any Credit Party
of each new Subsidiary of Parent established or created after the Initial
Borrowing Date to the Lender pursuant to the Pledge Agreements.
(d) Following any request by the Lender, each Credit
Party shall, to the maximum extent permitted by applicable law, grant security
interests in such of its Property as may be requested by the Lender, in which
perfected security interests do not already exist
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pursuant to the Security Documents theretofore executed and delivered and, in
connection therewith, the Credit Parties shall execute and deliver counterparts
of (and thereby become parties to) the applicable Security Documents and/or
Additional Security Documents, in each case in form and substance reasonably
satisfactory to the Lender.
(e) The security interests required to be granted
pursuant to Sections 8.10(c) shall be granted pursuant to the respective
Security Documents already executed and delivered by the Credit Parties (or
other security documentation substantially similar to such Security Documents or
otherwise reasonably satisfactory in form and substance to the Lender and the
Borrower Representative) and shall constitute valid and enforceable first
priority perfected security interests prior to the rights of all third Persons
and subject to no other Liens (other than Permitted Lines). The Credit Parties
shall (i) at their own expense, (x) execute, acknowledge and deliver, or cause
the execution, acknowledgment and delivery of, and thereafter register, file or
record in any appropriate governmental office, any document or instrument
reasonably deemed by the Lender to be necessary or desirable for the creation,
perfection, maintenance, preservation and protection of the Liens on their
assets intended to be created pursuant to the relevant Security Documents and
(y) take all other actions reasonably requested by the Lender (including,
without limitation, the furnishing of legal opinions) in connection with the
granting of the security interests required pursuant to Sections 8.10(c) and
(ii) pay in full all taxes, fees and other charges payable in connection with
the granting of the security interests required pursuant to Sections 8.10(c).
(f) Each Credit Party agrees that each action required
above by Section 8.10(a) or (b) shall be completed as soon as possible, but in
no event later than 45 days (or, in the case of actions relating to assets
located outside the United States, such greater number of days as the Lender may
agree to in its sole and absolute discretion in any given case) after such
action is requested to be taken by the Lender. Each Credit Party further agrees
that (x) each action required above by Section 8.10(c), (d) and (e) with respect
to a newly formed, created or acquired Subsidiary, or with respect to any
Subsidiary which is located in a jurisdiction newly-designated as an Acceptable
Jurisdiction, shall be completed contemporaneously with the formation, creation
or acquisition of such Subsidiary, or the date of the addition of the respective
jurisdiction to the list of Acceptable Jurisdictions, as applicable, and (y) all
actions required to be taken pursuant to Section 8.10(c) and Section 8.10(d)
shall be taken as promptly as practicable, and in any event within 45 days,
after the Borrower Representative receives the respective request from the
Lender. If requested by the Lender, the Credit Parties shall deliver to the
Lender legal opinions relating to the matters described in this Section 8.11, in
form, substance and from counsel, reasonably satisfactory to the Lender.
8.11 Use of Proceeds. Each Credit Party will, and will cause
each of its Subsidiaries to, use the proceeds of the Loans for the purposes
specified in Section 7.05 and in accordance with Section 7.26.
8.12 Maintenance of Company Separateness. Each Credit Party
will, and will cause each of its Subsidiaries to, satisfy customary Company
formalities, including the holding of regular board of directors' and
shareholders' meetings or action by directors or shareholders without a meeting
and the maintenance of Company records. Except to the extent provided under this
Agreement, no Credit Party shall make any payment to a creditor of any
Subsidiary of
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such Credit Party in respect of any liability of any such Subsidiary, and no
bank account of any such Subsidiary shall be commingled with any bank account of
any such Credit Party. Any financial statements distributed to any creditors of
any Subsidiary of a Credit Party shall clearly establish or indicate the
corporate separateness of such Subsidiary from Parent and its other
Subsidiaries. Finally, no Credit Party or any of its Subsidiaries shall take any
action, or conduct its affairs in a manner, which is likely to result in the
Company existence of any other Credit Party or any of their Subsidiaries being
ignored, or in the assets and liabilities of Parent or any other Credit Party
being substantively consolidated with those of any other such Person or any
Subsidiary in a bankruptcy, reorganization or other insolvency proceeding.
8.13 Performance of Obligations. Each Credit Party will, and
will cause each of its Subsidiaries to, perform all of its material obligations
under the terms of each mortgage, deed of trust, indenture, loan agreement or
credit agreement and each other material agreement, contract or instrument by
which it is bound, except such non-performances as, individually or in the
aggregate, could not reasonably be expected to cause a Default or Event of
Default hereunder or a Material Adverse Effect.
8.14 Certain Post-Effective Date Matters. (a) The Lender shall
have received copies of acknowledgments from each of the customers of the Credit
Parties of the Notice to Account Debtors on a date no later than 60 days after
the Effective Date.
(b) If at any time any customer shall have made a payment
under any Customer Contract to the Original Account or any account of any of the
Credit Parties or its Subsidiaries or to the Credit Parties or its Subsidiaries
other than the Designated Account, the relevant Credit Party shall hold such
payment and any proceeds therefrom in trust for the benefit of the Lender, and
shall immediately deliver such amount in the exact form received, with any
necessary endorsements and adequately identified as to its origin to the
applicable Designated Account, and provide evidence of such deposit to the
Lender.
(c) With respect to any Scheduled Existing Indebtedness
between the Borrower and a Non-Credit Party Affiliate permitted under Section
9.04, within 30 days of the Initial Borrowing Date, (i) the Borrower shall
assign to the Lender a first priority perfected security interest and Lien on
such Scheduled Existing Indebtedness if the Borrower is the creditor of such
Indebtedness and (ii) the Credit Parties shall cause the Non-Credit Party
Affiliate that is also a creditor of such Indebtedness to agree to subordination
provisions in form and substance satisfactory to the Lender such that any
obligation of the Borrower thereunder shall be subordinated to the indefeasible
payment and satisfaction in full of the Obligations of the Borrower under the
Credit Documents.
(d) The Lender shall, within ten (10) Business Days of
the Initial Borrowing Date, receive evidence satisfactory to it of the
registration and notifications made by bailiff pursuant to Article 6.1(g) of the
Purchase and Sale Agreement (France) between Baldwin France and the Borrower,
dated on or about the Effective Date.
(e) The Borrower shall, no later than 90 days prior to
the Anniversary Date or the termination of the term of the Custody Agreement,
whichever is earlier, deliver evidence satisfactory to the Lender that the
Custody Agreement shall be renewed and extended for a term
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until the Revolving Loan Maturity Date or arrange for a replacement custody
agreement with a custodian satisfactory to the Lender, which custody agreement
shall be in form and substance satisfactory to the Lender.
8.15 Dutch PMP Representation. On the date on which an
Assignee becomes a Lender, the Borrower shall represent and warrant to such
Lender on the date on which such Assignee becomes a Lender that it has verified
the status of such Lender on such date and such Lender is either (i) a PMP in
accordance with the requirements of the Exemption Regulation and the Policy
Guidelines and/or (ii) it forms a closed circle (besloten kring) within the
meaning of the Exemption Regulations and the Policy Guidelines with the relevant
Borrower.
SECTION 9. Negative Covenants. Each Credit Party hereby,
jointly and severally covenants and agrees that, without the prior written
consent of the Lender, as of the Effective Date and thereafter for so long as
this Agreement is in effect and until the Commitment has terminated, no
Revolving Notes or Letters of Credit are outstanding and the Loans, the Letters
of Credit, together with interest, Fees and all other Obligations incurred
hereunder, are paid in full:
9.01 Changes in Business; etc. Parent and its Subsidiaries
will not engage in any business other than a Permitted Business.
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc.
No Credit Party will, nor will permit any of its respective Subsidiaries to,
wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of all or
any substantial part of its property or assets, or enter into any sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) any substantial part of the property or assets (other than
purchases or other acquisitions of inventory, materials and equipment in the
ordinary course of business) of any Person or agree to do any of the foregoing
at any future time, except that the following shall be permitted:
(i) a Credit Party and its Subsidiaries may lease (as
lessee) or license (as licensee) real or personal property (including
intellectual property) in the ordinary course of business (so long as
any such lease or license does not create a Capitalized Lease
Obligation that exceeds $250,000 per annum on an aggregate basis);
(ii) Investments permitted pursuant to Section 9.05;
(iii) a Credit Party and its Subsidiaries may, in the
ordinary course of business, sell or otherwise dispose of assets
(excluding capital stock of, or other Equity Interests in, Subsidiaries
and joint ventures) which, in the reasonable opinion of such Person,
are obsolete, uneconomic or worn-out;
(iv) a Credit Party and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary course of
business, overdue accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection
thereof and not as part of any financing transaction;
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(v) a Credit Party and its Subsidiaries may grant
licenses, sublicenses, leases or subleases to other Persons not
materially interfering with the conduct of the business of the Credit
Party or any of its Subsidiaries, in each case so long as no such grant
otherwise affects the Lender's security interest in the asset or
property subject thereto;
(vi) a Credit Party and its Subsidiaries may sell
inventory to their respective customers in the ordinary course of
business;
(vii) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving entity) or with or into any one or
more wholly-owned Subsidiaries of the Borrower (provided that a
wholly-owned Credit Party or Credit Parties shall be the continuing or
surviving entity); and
(viii) each Guarantor Subsidiary may sell Eligible Accounts
Receivable to the Borrower pursuant to the terms of the Purchase and
Sale Agreements.
9.03 Liens. No Credit Party will, or will permit any of its
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 Parent or any of its Subsidiaries, 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 recourse to Parent or any
of its Subsidiaries) or assign any right to receive income 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 Liens described below which
are herein referred to as "Permitted Liens":
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes,
assessments or governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves have
been established in accordance with U.S. GAAP;
(ii) Liens in respect of property or assets of the Credit
Parties or any of their Subsidiaries imposed by law which were incurred
in the ordinary course of business and which have not arisen to secure
Indebtedness for borrowed money, such as carriers', warehousemen's and
mechanics' Liens, statutory landlord's Liens, maritime Liens and other
similar Liens arising in the ordinary course of business, and which
either (x) do not in the aggregate materially detract from the value of
such property or assets or materially impair the use thereof in the
operation of the business of the Credit Parties or any of their
Subsidiaries or (y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such Lien;
(iii) Liens created by or pursuant to this Agreement and
the Security Documents;
(iv) Liens in existence on the Initial Borrowing Date
which are listed, and the property subject thereto described, in
Schedule 7.23, but only to the respective date, if
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any, set forth in such Schedule 7.23 for the removal, replacement and
termination of any such Liens, provided that (x) the aggregate
principal amount of the Indebtedness, if any, secured by such Liens
does not increase from that amount outstanding at the time of any such
renewal, replacement or extension and (y) any such renewal, replacement
or extension does not encumber any additional assets or properties of
the Credit Parties or any of their Subsidiaries;
(v) Liens (other than any Lien imposed by ERISA) (x)
incurred or deposits made in the ordinary course of business of the
Credit Parties and their Subsidiaries in connection with workers'
compensation, unemployment insurance and other types of social
security, (y) to secure the performance by the Credit Parties and their
Subsidiaries of tenders, statutory obligations (other than excise taxes
not described in Section 9.03(i)), surety and customs bonds, statutory
bonds, bids, leases, government contracts, trade contracts, performance
and return of money bonds and other similar obligations (exclusive of
(I) obligations for the payment of borrowed money and (II) stay and
appeal bonds and other obligations described above) or (z) to secure
the performance by the Credit Parties and their Subsidiaries of leases
of Real Property, to the extent incurred or made in the ordinary course
of business consistent with past practices;
(vi) licenses, sublicenses, leases or subleases granted to
third Persons in the ordinary course of business not interfering in any
material respect with the business of the Credit Parties or any of
their Subsidiaries;
(vii) easements, rights-of-way, restrictions,
encroachments, municipal and zoning ordinances and other similar
charges or encumbrances, and minor title deficiencies, in each case not
securing Indebtedness and not materially interfering with the conduct
of the business of Credit Parties or any of their Subsidiaries; and
(viii) protective liens granted by the Guarantor
Subsidiaries to the Borrower pursuant to the terms of the Purchase and
Sale Agreements and assigned to the Lender.
9.04 Indebtedness. No Credit Party will, or will permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Scheduled Existing Indebtedness outstanding on the
Initial Borrowing Date and listed on Part II of Schedule 7.23 and
renewals on substantially similar terms, and without duplication, with
respect to any such Scheduled Existing Indebtedness between Baldwin
Jimek and S.E. Banken, issuance of letters of credit or replacement and
renewal of existing letters of credit by S.E. Banken on substantially
similar terms; provided that no such Indebtedness may exceed $100,000
on an individual basis or $1,800,000 in the aggregate outstanding at
any time; provided further that any request for a letter of credit in
an amount in excess of $100,000 shall be made to the Lender pursuant to
Section 1A of this Agreement;
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(iii) Indebtedness of the Credit Parties under Interest
Rate Protection Agreements and Other Hedging Agreements entered into to
protect them against fluctuations in interest rates in respect of
Indebtedness otherwise permitted under this Agreement, so long as the
entering into of such Interest Rate Protection Agreements are bona fide
hedging activities and are not for speculative purposes and are with
the prior written consent of the Lender;
(iv) Indebtedness incurred pursuant to the terms of the
Purchase and Sale Agreements, "Purchaser Notes" and "Debt Certificates"
(in each case, as defined in applicable Purchaser and Sale Agreement);
(v) Indebtedness incurred pursuant to the terms of the
Reimbursement Agreements;
(vi) Indebtedness of the Borrower to any Credit Party or
Baldwin France, and of any Credit Party or Baldwin France to the
Borrower or any other Credit Party or Baldwin France, as applicable;
and
(vii) unsecured Indebtedness of the relevant Credit Parties
to the Parent with respect to payment of management fees to the extent
permitted under Section 9.06(b).
9.05 Advances; Investments; Loans. No Credit Party will, or
will permit any of its Subsidiaries to, directly or indirectly, lend money or
extend credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other Equity Interest in, or make any
capital contribution to, any Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except:
(i) the Credit Parties and their Subsidiaries may acquire
and hold cash and Cash Equivalents; provided, however, that at any time
Revolving Loans are outstanding, the aggregate amount of Unrestricted
Cash held by the Credit Parties and their Subsidiaries shall not exceed
$5,000,000 for any period of five consecutive Business Days other than
(x) Unrestricted Cash held by a Credit Party or a Subsidiary of a
Credit Party for the benefit of a third party and (y) Unrestricted Cash
held by Baldwin Printing Control (Beijing) Company Limited in an amount
not to exceed $300,000;
(ii) the Credit Parties and their Subsidiaries may acquire
and hold receivables owing to it, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance
with customary trade terms (including the dating of receivables) of the
Credit Parties or such Subsidiary;
(iii) the Credit Parties and their Subsidiaries may acquire
and own investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers, trade creditors,
licensees, licensors and customers and in good faith settlement of
delinquent obligations of, and other disputes with, suppliers, trade
creditors, licensees, licensors and customers arising in the ordinary
course of business;
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(iv) loans and advances to employees of any of the Credit
Parties or its Subsidiaries for travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate amount for
the Credit Parties and their Subsidiaries not to exceed $100,000 at any
one time outstanding;
(v) the Credit Parties and their Subsidiaries may own the
capital stock of, or other Equity Interests in, their respective
Subsidiaries created or acquired in accordance with the terms of this
Agreement; and
(vi) the Guarantor Subsidiaries may extend credit to the
Borrower pursuant to the terms of the Purchase and Sale Agreements and
the "Purchaser Notes" and "Debt Certificates" to be issued by the
Borrower thereunder.
9.06 Restricted Payments; etc. No Credit Party will, or will
permit any of its Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in non-redeemable common stock or comparable common
equity interests of Parent or any such Subsidiary, as the case may be) or return
any equity capital to, its stockholders, partners, members or other equity
holders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders, partners, members or other equity holders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital stock or
other Equity Interests, now or hereafter outstanding (or any warrants for or
options or stock appreciation rights in respect of any of such shares or other
Equity Interests), or set aside any funds for any of the foregoing purposes, and
no Credit Party will, or will permit any of its Subsidiaries to purchase or
otherwise acquire for consideration any shares of any class of the capital stock
or other Equity Interests of Parent or any other Subsidiary, as the case may be,
now or hereafter outstanding (or any options or warrants or stock appreciation
rights issued by such Person with respect to its capital stock or other Equity
Interests) (all of the foregoing "Dividends"), except that (a) a Credit Party
may pay Dividends to another Credit Party provided that such Dividend shall be
in the form of a dividend or distribution and (b) the Parent may receive from
the relevant Credit Parties a management fee of up to $3,500,000 per annum in
the aggregate.
9.07 Transactions with Affiliates. Except as otherwise
permitted hereunder or as contemplated by the Purchase and Sale Agreements, no
Credit Party will, or will permit any of its Subsidiaries to, enter into any
transaction or series of transactions with any Affiliate of Parent or any of its
Subsidiaries or amend, modify or change any term or provision thereof, other
than in the ordinary course of business and on terms and conditions
substantially as favorable to such Credit Party or such Subsidiary as would be
reasonably expected to be obtainable by such Credit Party or such Subsidiary at
the time in a comparable arm's-length transaction with a Person other than an
Affiliate, or as otherwise approved by the Lender, and any such transaction or
series of transaction or amendment, modification or change thereof would not
reasonably be expected to adversely affect any right or interest of the Lender
hereunder or under the other Credit Documents.
9.08 Capital Expenditures. No Credit Party will, or will
permit any of its Subsidiaries to, make any Capital Expenditures, except for
expenditures by any of the Credit
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Parties in the ordinary course of business not exceeding, in the aggregate
during any fiscal year of the Credit Parties, $500,000 on a consolidated basis.
9.09 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements, etc. (a) No Credit Party will, and no Credit Party will permit
any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption, repurchase or
acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto or any other Person
money or securities before due for the purpose of paying when due), or
any prepayment, repurchase, redemption or acquisition for value as a
result of any asset sale, change of control or similar event of, any
Existing Indebtedness;
(ii) except as permitted pursuant to Section 9.04(ii) or
Section 9.07, amend or modify, or permit the amendment or modification
of, any provision of any Existing Indebtedness, other than any
technical or clarifying amendments, modifications or changes to any
such documents that are not in any way adverse to the interests of the
Lenders and do not relate to the subordination provisions contained
therein (including, without limitation, reductions in payment
obligations, reductions in interest rates and maturity extensions); or
(iii) amend or modify, or permit the amendment or
modification of, any provision of any of the certificate of
incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of limited liability company, limited liability
company agreement or equivalent organizational document of any such
Credit Party or any such Subsidiary in any manner adverse to any of the
rights or interests of the Lender hereunder or under the other Credit
Documents or change its legal name, its type of organization, its
status as a registered organization (in the case of a registered
organization), its jurisdiction of organization, its location of
business, or its organizational identification number.
9.10 Limitation on Issuance of Equity Interests. (a) No Credit
Party will issue any Preferred Equity (or any options, warrants or rights to
purchase Preferred Equity) or any redeemable common stock or equivalent common
Equity Interests.
(b) No Credit Party will, or will permit any of its
Subsidiaries to, issue any capital stock or other Equity Interests (including by
way of sales of treasury stock), except (i) for transfers and replacements of
then outstanding shares of capital stock or other Equity Interests and (ii) for
stock splits, stock dividends and additional issuances which do not decrease the
aggregate percentage ownership of Parent and its Subsidiaries in any class of
the capital stock or other Equity Interests of such Subsidiaries. All capital
stock or other Equity Interests issued in accordance with this Section 9.10(b)
shall, to the extent required by the relevant Security Document, be delivered to
the Lender for pledge pursuant to such Security Document.
9.11 Limitation on Certain Restrictions on Subsidiaries. No
Credit Party will, or will permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to
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exist or become effective, any encumbrance or restriction on the ability of any
such Subsidiary to (x) pay dividends or make any other distributions on its
capital stock or any other Equity Interests or participation in its profits
owned by Parent or any Subsidiary of Parent, or pay any Indebtedness owed to
Parent or a Subsidiary of Parent, (y) make loans or advances to Parent or any
Subsidiary of Parent or (z) transfer any of its properties or assets to Parent
or any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and the
other Credit Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Credit Parties or
a Subsidiary of the Credit Parties, or (iv) customary provisions restricting
assignment of any licensing agreement (in which the Credit Parties or any of
their Subsidiaries is the licensee) or any other contract entered into by the
Credit Parties or any Subsidiary of the Credit Parties in the ordinary course of
business.
9.12 Limitation on the Creation of Subsidiaries. Parent will
not, and will not permit any of its Subsidiaries to, establish, create or
acquire after the Initial Borrowing Date any Subsidiary.
9.13 Limitation on Changes in Fiscal Year. No Credit Party
will, or will permit any of its Subsidiaries to change the fiscal year to end on
a date other than June 30.
9.14 Limitation on Negative Pledge Clauses. No Credit Party
will, or will permit any of its Subsidiaries to enter into with any Person any
agreement, other than (a) this Agreement and (b) any industrial revenue bonds,
purchase money mortgages or Capitalized Leases permitted by this Agreement (in
which cases, any prohibition or limitation shall only be effective against the
assets financed thereby), which agreement prohibits or limits the ability of any
Credit Party or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired.
9.15 Tax Sharing. No Credit Party will, or will permit any of
its Subsidiaries to, consent to or permit the filing of or be a party to any
consolidated income tax return with any Person other than a consolidated return
of the Parent and its Subsidiaries.
9.16 Limitation or Use of Proceeds. No Credit Party will, or
will permit any of its Subsidiaries to, use any of the proceeds of the Loans to
finance any Acquisition.
9.17 Customer Contract. No Credit Party will, or will permit
any of its Subsidiaries to enter into any Customer Contract except such Customer
Contracts as may be entered into by the relevant Credit Party or Subsidiary in
the ordinary course of business in accordance with applicable law and prudent
commercial practices, containing standard commercial terms and conditions and
all payments under any and all such contracts shall be made to the Designated
Account pursuant to the terms of such contracts and/or related invoices.
9.18 Value of Collateral. The aggregate value of the Borrowing
Base shall at no time be less than the aggregate amount of the Loans then
outstanding.
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SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each, an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of any Loan or Revolving Note, (ii) default, and such
default shall continue for three or more Business Days, in the payment when due
of any interest on any Loan or Revolving Note or any Drawing under any Letter of
Credit which has not been reimbursed by the Borrower or any Fees or (iii)
default, and such default shall continue for 10 or more Business Days after
notice to the Borrower by the Lender, in the payment when due of any other
amounts owing hereunder or under any other Credit Document; or
10.02 Representations, etc. Any representation, warranty or
statement made or deemed made by any Credit Party herein or in any other Credit
Document or in any statement or certificate 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
10.03 Covenants. Any Credit Party or any of its Subsidiaries
shall (a) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 8.01, 8.02(b), 8.03, 8.10, 8.11,
8.12, 8.13, 8.14 (other than clause (a) thereof), or 9, or (b) default in the
due performance or observance by it of any term, covenant or agreement contained
in this Agreement (other than Section 8.14(a) and those referred to in Section
10.01, 10.02 or clause (a) of this Section 10.03) and such default shall
continue unremedied for a period of at least 30 days after notice to the
defaulting party by the Lender; or
10.04 Default Under Other Agreements. (a) Any Credit Party or
any of its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness in excess of $500,000 (other than the Obligations) beyond the
period of grace, if any, provided in the instrument or agreement under which
Indebtedness was created 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, or any other
event shall occur or condition exist, in any case 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 (determined without regard to whether any notice is required), any such
Indebtedness in excess of $500,000 to become due prior to its stated maturity;
or (b) any Indebtedness (other than the Obligations) of any Credit Party or any
of its Subsidiaries in excess of $500,000 shall be declared to be (or shall
become) due and payable, or shall be required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof;
or
10.05 Bankruptcy, etc. Any Credit Party or any of its
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 any other similar Debtor Relief
Law; or an involuntary case is commenced against any Credit Party or any of its
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 any Credit Party or any of its
Subsidiaries; or any Credit Party or any of its Subsidiaries
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commences any other proceeding under any reorganization, arrangement, adjustment
of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect relating to any
Credit Party or any of its Subsidiaries; or there is commenced against any
Credit Party or any of its Subsidiaries any such proceeding which remains
undismissed for a period of 60 days; or any Credit Party or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or any Credit
Party or any of its Subsidiaries suffers any appointment of any custodian,
administrator or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or any Credit Party
or any of its Subsidiaries makes a general assignment for the benefit of
creditors; or any Company action is taken by any Credit Party or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
..67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days which could reasonably be
expected to result in a Material Adverse Effect, any Plan which is subject to
Title IV of ERISA shall have had or is likely to have a trustee appointed to
administer such Plan pursuant to Section 4042(b) of ERISA, any Plan or
Multiemployer Plan which is subject to Title IV of ERISA is, shall have been or
is likely to be involuntarily terminated or to be the subject of termination
proceedings under ERISA, any Plan subject to Title IV of ERISA shall have an
Unfunded Current Liability, a contribution required to be made with respect to a
Plan or Multiemployer Plan or a Foreign Pension Plan has not been timely made,
any Credit Party or any Subsidiary of any Credit Party or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a Plan
subject to Title IV of ERISA or Multiemployer Plan under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or on account of a group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code, or any Credit Party or any Subsidiary of any Credit
Party has incurred or is likely to incur liabilities pursuant to one or more
employee welfare benefit plans (as defined in Section 3(1) of ERISA) that
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or Plans or Foreign Pension Plans, a "default"
within the meaning of Section 4219(c)(5) of ERISA, shall occur with respect to
any Plan or Multiemployer Plan; (b) there shall result from any such event or
events described above in this Section 10.06 the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability resulting from any event described in clause (a) above; and (c) such
lien, security interest or liability, individually and/or in the aggregate has
had, or could reasonably be expected to have, a Material Adverse Effect; or
10.07 Security Documents. (a) Any Security Document shall
cease to be in full force and effect (except in accordance with the terms
thereof), or shall cease to give the Lender the Liens, rights, powers and
privileges purported to be created thereby (including, without
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limitation, a perfected security interest in, and Lien on, all of the
Collateral), in favor of the Lender, superior to and prior to the rights of all
third Persons (except as permitted by Section 9.03), and subject to no other
Liens (except as permitted by Section 9.03), or (b) any Credit Party shall
default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to any such Security Document
and such default shall continue beyond any cure or grace period specifically
applicable thereto pursuant to the terms of any such Security Document; or
10.08 Guaranties. Any Guaranty or any provision under Section
13 hereof shall cease to be in full force or effect as to the relevant
Guarantor, or any Guarantor or Person acting by or on behalf of such Guarantor
shall deny or disaffirm such Guarantor's obligations thereunder, or any
Guarantor shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant to its
guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against any Credit Party or any of its Subsidiaries involving a
liability (to the extent not paid or covered by a reputable and solvent
insurance company (with any portion of any judgment or decree not so covered to
be included in any determination hereunder)) equal to or in excess of $500,000
for all such judgments and decrees and all such judgments or decrees shall
either be final and non-appealable or shall not have been vacated, discharged or
stayed or bonded pending appeal for any period of 60 consecutive days; or
10.10 Denial of Liability. (a) Any Credit Party shall deny its
obligations under this Agreement, any Revolving Note or any other Credit
Document, (b) any law, rule or regulation shall purport to render invalid, or
preclude enforcement of, any provision of this Agreement or any other Credit
Document or impair performance of any Credit Party's obligations hereunder or
under any other Credit Document or (c) any authority of competent jurisdiction
asserting or exercising de jure or de facto governmental or police powers shall,
by moratorium laws or otherwise, cancel, suspend or defer the obligation of any
Credit Party to pay any amount required to be paid hereunder or under any other
Credit Document; or
10.11 Governmental Action. Any governmental authority shall
have condemned, nationalized, seized, or otherwise expropriated all or any
substantial part of the property, shares of capital stock or other assets of any
Credit Party or any of its Subsidiaries, or shall have assumed custody or
control of such property or other assets or of the business or operations of any
Credit Party or any of its Subsidiaries, or shall have taken any action for the
dissolution or disestablishment of any Credit Party or any of its Subsidiaries
or any action that would prevent any Credit Party, any of its Subsidiaries or
any of their respective officers from carrying on the business of such Credit
Party or such Subsidiary or a substantial part thereof; or
10.12 Material Adverse Effect. The business or operations of
the Credit Parties taken as a whole shall experience a Material Adverse Effect;
or
10.13 Change of Control. A Change of Control shall occur; or
10.14 Termination Event. A "Termination Event" (as defined in
any Purchase and Sale Agreement) shall occur; or
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10.15 Controlling Interest in Baldwin Japan and Baldwin
Sweden. (a) The Lender shall not have a perfected first priority security
interest in, and Lien on, at least a Controlling Interest in Baldwin Sweden
within 60 days of the Initial Borrowing Date or (b) the Lender shall not have a
perfected first priority security interest in, and Lien on, at least a
Controlling Interest in Baldwin Japan within 15 Business Days of the Initial
Borrowing Date; or
10.16 Resolutions. The Lender shall not have received, within
45 days of the Initial Borrowing Date, a certified copy of resolutions of the
shareholders of Baldwin Globaltec approving the execution, delivery and
performance by Baldwin Globaltec of the Credit Documents to which it is a party
and the amendment and/or modification of Article 5 of the Articles of
Association of Baldwin Globaltec, each in form and substance satisfactory to the
Lender,
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Lender may, by written notice to the Borrower
Representative, take any or all of the following actions (provided that if an
Event of Default specified in Section 10.05 shall occur with respect to any
Credit Party, the result which would occur upon the giving of written notice by
the Lender as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Commitment terminated,
whereupon the Commitment of the Lender shall forthwith terminate immediately and
any Fees shall forthwith become due and payable without any other notice of any
kind; (ii) declare the principal of and any accrued interest in respect of all
Loans and all Obligations owing hereunder 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; (iii)
enforce any or all of the Liens and security interests created pursuant to the
Security Documents; and (iv) exercise such other remedies and rights at law or
in equity.
SECTION 11. Definitions and Rules of Interpretation.
11.01 Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acceptable Currency" shall mean freely transferable lawful
currency of any Acceptable Jurisdiction, provided that the calculation of the
value thereof shall be based upon the Dollar Equivalent determined as of the
date of such calculation.
"Acceptable Jurisdiction" shall mean France, Germany, Japan,
Sweden, United Kingdom, The Netherlands and United States of America.
"Account" shall mean, with respect to any Person, all present
and future accounts, contract rights and other rights to payment for goods sold
or leased (whether or not delivered) or for services rendered which are not
evidenced by an instrument, whether or not they have been earned by performance,
and any letter of credit, guarantee, security interest or other security issued
or granted to secure payment by an account debtor.
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"Account Control Agreement" shall mean the Deposit Account
Control Agreement, dated on or about the Effective Date, among the Borrower, the
Lender and Bank of America, N.A.
"Account Debtor" shall mean any Person who is or becomes
obligated to a Credit Party under, with respect to or on account of an Account
or a Japanese Note.
"Acquisition" shall mean any transaction pursuant to which any
of the Credit Parties or any of its Subsidiaries (a) acquires equity securities
(or warrants, options or other rights to acquire such securities) of any Person
other than any of the Credit Parties or any Person which is not then a
Subsidiary of any of the Credit Parties, pursuant to a solicitation of tenders
therefor, or in one or more negotiated block, market or other transactions not
involving a tender offer, or a combination of any of the foregoing, or (b) makes
any Person a Subsidiary of any of the Credit Parties, or causes any such Person
to be merged into any of the Credit Parties or any of its Subsidiaries, in any
case pursuant to a merger, purchase of assets or any reorganization providing
for the delivery or issuance to the holders of such Person's then outstanding
securities, in exchange for such securities, of cash or securities of any of the
Credit Parties or any of its Subsidiaries, or a combination thereof, or (c)
purchases all or substantially all of the business or assets of any Person.
"Acrotec UK" shall have the meaning provided in the first
paragraph of this Agreement.
"Additional Collateral" shall mean all property (whether real
or personal) in which security interests are granted (or have been purported to
be granted) (and continue to be in effect at the time of determination) pursuant
to Section 8.10.
"Additional Security Documents" shall mean all mortgages,
pledge agreements, security agreements and other security documents entered into
from time to time pursuant to Section 8.10, as each such document may be
modified, supplemented or amended from time to time in accordance with the terms
hereof and thereof.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power (i)
to vote 10% or more of the securities having ordinary voting power for the
election of directors (or equivalent governing body) of such Person or (ii) to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that no Lender (nor any Affiliate thereof) shall
be considered an Affiliate of Parent or any Subsidiary thereof.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Anniversary Date" shall mean August 15, 2004.
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"Applicable Margin" shall mean a percentage per annum equal to
(i) in the case of Revolving Loans maintained as (A) Base Rate Loans, 8% and (B)
Eurodollar Loans denominated in Dollars, 10%, and Eurodollar Loans denominated
in Euros, 11.5%; provided that commencing the second fiscal quarter of fiscal
year 2004, if the Disclosed EBITDA of the Parent for such fiscal quarter or any
succeeding fiscal quarter equals or exceeds $1,250,000 (the "Required EBITDA"),
then the Applicable Margin for the relevant Interest Period shall be reduced by
0.50%, or whole increments thereof for each whole increment of the Required
EBITDA.
"Asset Sale" shall mean any sale, transfer or other
disposition by Parent or any of its Subsidiaries to any Person other than the
Borrower or any wholly-owned Subsidiary of the Borrower of any asset or Property
(including, without limitation, any capital stock or other securities of, or
other Equity Interests in, another Person, but excluding the sale by Parent of
its own capital stock) of Parent or such Subsidiary other than (i) sales,
transfers or other dispositions of inventory made in the ordinary course of
business, or (ii) sales or liquidations of Cash Equivalents, it being understood
and agreed that the grant of a Lien by Parent or any of its Subsidiaries in
favor of another Person shall not in and of itself constitute an "Asset Sale"
for purposes of this definition.
"Assignment and Assumption Agreement" has the meaning provided
in Section 12.04(b) of this Agreement.
"Authorized Officer" shall mean, (i) with respect to any
Person that is a corporation or a limited liability company, the Chairman,
President, any Vice President or Secretary (or Assistant Secretary) of such
Person and (ii) with respect to any Person that is a partnership, the President,
any Vice President or Secretary (or Assistant Secretary) of a general partner or
managing partner of such Person and in each case whose name appears on a
certificate of incumbency of such Person delivered in accordance with this
Agreement, as such certificate may be amended from time to time.
"BAC" shall have the meaning provided in the first paragraph
of this Agreement.
"BAC Common Stock" shall have the meaning provided in Section
7.13(b) of this Agreement.
"Baldwin France" shall mean Baldwin France Sarl, a French
limited liability company.
"Baldwin Germany" shall have the meaning provided in the first
paragraph of this Agreement.
"Baldwin Globaltec" shall have the meaning provided in the
first paragraph of this Agreement.
"Baldwin Graphic" shall have the meaning provided in the first
paragraph of its Agreement.
"Baldwin Graphic Common Stock" shall have the meaning provided
in Section 7.13(e) of this Agreement.
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"Baldwin IVT" shall have the meaning provided in the first
paragraph of this Agreement.
"Baldwin Japan" shall mean Baldwin Japan Ltd., a Japanese
company.
"Baldwin Jimek" shall have the meaning provided in the first
paragraph of this Agreement.
"Baldwin Sweden" shall have the meaning provided in the first
paragraph of this Agreement.
"Baldwin U.K." shall have the meaning provided in the first
paragraph of this Agreement.
"Baldwin (UK)" shall have the meaning provided in the first
paragraph of this Agreement.
"Bankruptcy Code" shall have the meaning provided in Section
10.05 of this Agreement.
"BAPC" shall have the meaning provided in the first paragraph
of this Agreement.
"BAPC Common Stock" shall have the meaning provided in Section
7.13(d) of this Agreement.
"Base Rate" at any time shall mean the higher of (x) the rate
which is 1/2 of 1% in excess of the Federal Funds Rate at such time and (y) the
Prime Lending Rate at such time.
"Base Rate Loan" shall mean the Loans or any portion thereof
which bears interest based on the Base Rate.
"BEC" shall have the meaning provided in the first paragraph
of this Agreement.
"BEC Common Stock" shall have the meaning provided in Section
7.13(c) of this Agreement.
"Borrower Representative" shall mean Baldwin Technology
Company, Inc., a Delaware corporation.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan by
the Borrower from the Lender having Commitments with respect to such Loan on a
given date (or resulting from a conversion or conversions on such date),
provided that Base Rate Loans incurred pursuant to Section 1.07(b) shall be
considered part of the related Borrowing of Eurodollar Loans or Euro Denominated
Loans, as the case may be.
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"Borrowing Base" shall mean, as of any date of determination
by the Lender, from time to time, an amount equal to the sum of (a) 100% of the
amount of cash then in deposit in the Designated Accounts (less the Excluded
Amount) as to which the Lender shall have a valid and perfected first priority
security interest and Lien, (b) 80% of Eligible Accounts Receivable and (c) for
the period from and after the Effective Date up to the Anniversary Date, 40% of
the value of Eligible Inventory, provided that for the purpose of determining
the Borrowing Base, such value shall not exceed $5,000,000.
"Borrowing Base Certificate" shall mean a certificate in
substantially the form of Exhibit J to the Agreement and delivered pursuant to
Sections 6.06 and 8.01(m) of the Agreement.
"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 of New York 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 or with respect to, any Eurodollar Loan,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in the London interbank market and which shall
not be a legal holiday or a day on which banking institutions are authorized or
required by law or other government action to close in London or New York City.
"Capital Expenditures" shall mean, with respect to any Person,
for any period, all expenditures by such Person which should be capitalized in
accordance with U.S. GAAP during such period, including, without duplication,
all such expenditures with respect to fixed or capital assets (including,
without limitation, expenditures for maintenance and repairs which should be
capitalized in accordance with U.S. GAAP) and the amount of all Capitalized
Lease Obligations incurred by such Person during such period.
"Capital Lease," as applied to any Person, shall mean any
lease of any Property by that Person as lessee which, in conformity with U.S.
GAAP, is accounted for as a capital lease on the balance sheet of that Person.
"Capitalized Lease Obligations" of any Person shall mean all
obligations under Capital Leases of such Person, in each case taken at the
amount thereof accounted for as indebtedness in accordance with U.S. GAAP.
"Cash Equivalents" means (i) Dollars, Euros, pounds sterling
and, in the case of any of the Guarantor Subsidiaries, such local currencies
held by them from time to time in the ordinary course of their businesses, (ii)
securities issued or directly fully guaranteed or insured by the governments of
the United States, the United Kingdom, Sweden, Switzerland, Japan, Canada and
members of the European Union or any agency or instrumentality thereof (provided
that the full faith and credit of the respective such government is pledged in
support thereof) having maturities of not more than six months from the date of
acquisition, (iii) securities issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within six months from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either S&P
or
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Moody's, (iv) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank or commercial bank of a
foreign country recognized by the United States, (x) in the case of a domestic
commercial bank, having capital and surplus in excess of $500,000,000 and
outstanding debt which is rated "A" (or similar equivalent thereof) or higher by
at least one nationally recognized statistical rating organization (as defined
under Rule 436 under the Securities Act) and (y) in the case of a foreign
commercial bank, having capital and surplus in excess of $250,000,000 (or the
foreign currency equivalent thereof), (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clauses (ii) and (iv) above entered into with any financial institution meeting
the qualifications specified in clause (iv) above, (vi) commercial paper having
a rating of at least A-1 from S&P or at least P-1 from Moody's and in each case
maturing within six months after the date of acquisition and (vii) investments
in money market funds which invest substantially all their assets in securities
of the types described in clauses (i) through (vi) above.
"Change of Control" shall mean, at any time and for any reason
whatsoever, (a) Parent shall cease to own directly or indirectly, 90% on a fully
diluted basis of the economic and voting interest in Baldwin Globaltec's equity
and 100% on a fully diluted basis of the economic and voting interest in the
Borrower's capital stock and each of the other Guarantor Subsidiary's equity or
(b) the Borrower shall cease to own directly or indirectly, 90% on a fully
diluted basis of the economic and voting interest in Baldwin Globaltec's equity
and 100% on a fully diluted basis of the economic and voting interests in each
of the other Guarantor Subsidiary's (other than Baldwin Japan) equity or (c) BAC
shall cease to own directly or indirectly 100% on a fully diluted basis of the
economic ad voting interest in Baldwin Japan's equity or (d) Continuing
Directors cease to constitute a majority of the members of the Board of
Directors of Parent.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or
personal, movable or immovable) with respect to which any security interests
have been granted (or purported to be granted) pursuant to any Security Document
(including any Additional Security Document), including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral and all cash and
Cash Equivalents delivered as collateral pursuant to any Credit Document and all
Additional Collateral, if any.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.10.
"Commitment" shall mean $20,000,000.
"Company" shall mean any corporation, limited liability
company, partnership or other business entity (or the adjectival form thereof,
where appropriate).
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"Consolidated Interest Expense" shall mean, for any period,
the aggregate consolidated interest accrued and/or paid by Parent, the Borrower
and their respective Subsidiaries in respect of Indebtedness determined on a
consolidated basis in accordance with U.S. GAAP during such period, including,
without limitation, amortization of original issue discount on any Indebtedness
and of all fees payable in connection with the incurrence of such Indebtedness
(to the extent included in interest expense), the interest portion of any
deferred payment obligation, the interest component of any Capitalized Lease
Obligations, net cash costs under any Interest Rate Protection Agreements and
Other Hedging Agreements, all capitalized interest and interest paid by Parent,
the Borrower or their respective Subsidiaries on debt guaranteed by Parent, the
Borrower or their respective Subsidiaries.
"Consolidated Net Income" shall mean for any period the
consolidated net income of Parent, the Borrower and their respective
Subsidiaries for such period as determined in accordance with U.S. GAAP.
"Consolidated Subsidiary" shall mean, with respect to any
Person, at any date, any other Person the Equity Interests of which are owned by
such Person and whose financial results are consolidated in the financial
statements of such Person in accordance with U.S. GAAP (and consistent with the
consolidation practices of the Borrowers as in effect on the Effective Date), if
such statements were prepared as of such date.
"Continuing Directors" shall mean the directors of Parent on
the Effective Date and each other director if such director's election or
nomination for the election to the Board of Directors is recommended by a
majority of the then Continuing Directors.
"Contractual Obligations" shall mean, as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound.
"Controlling Interest" shall mean, with respect to any Person,
at least 95% on a fully diluted basis of the economic and voting interest in
such Person's equity.
"Credit Documents" shall mean this Agreement, the Revolving
Notes, the Letters of Credit, each Guaranty, each Security Document and any
other guarantees or security documents executed and delivered for the benefit of
the Lender in accordance with the requirements of this Agreement and any other
guaranties, pledge agreements or security documents executed and delivered in
accordance with the requirements hereof, and the Purchase and Sale Agreements.
"Credit Event" shall mean the making of a Loan or the issuance
of a Letter of Credit.
"Credit Insurance" shall have the meaning provided in Section
8.03.
"Credit Party" shall mean individually, each of Parent, the
Borrower and each Guarantor and collectively, all of the foregoing.
"Custodian" shall mean J.P. Morgan Trust Bank Ltd.
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"Custody Agreement" shall mean the Custodial Agreement, dated
as of the Effective Date, among Baldwin Japan, the Lender and the Custodian.
"Customer Contract" shall have the meaning provided in Section
7.22.
"Debtor Relief Laws" shall mean the Bankruptcy Code, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States of America, the Netherlands,
United Kingdom, Japan, Sweden, Germany, France or other Acceptable Jurisdiction
applicable countries from time to time in effect affecting the rights of
creditors generally.
"Default" shall mean any event, act or condition, which with
notice or lapse of time, or both, would constitute an Event of Default.
"Designated Account" shall mean, with respect to any Credit
Party, the account set forth opposite its name on Schedule 9.17 to this
Agreement, and in which the Lender shall have a valid and perfected first
priority security interest and Lien pursuant to the terms of the Security
Documents.
"Disclosed EBITDA" shall mean, in any fiscal period,
Consolidated Net Income for such period, (i) plus the amount of all Consolidated
Interest Expense, federal, state and local income or franchise tax expense (in
each case to the extent such tax expense is included in the financial statements
of the Parent and its Consolidated Subsidiaries as income tax expense),
depreciation and amortization, including amortization or write off of any
goodwill or other intangibles for such period, (ii) less gains and plus losses
attributable to any fixed asset sales, (iii) plus the amortization of debt
issuance costs and (iv) plus or minus (as the case may be) any other non-cash
items, all determined in accordance with U.S. GAAP, without duplication and only
to the extent added or deducted (as the case may be) in calculating Consolidated
Net Income, and as disclosed by the Parent in its Form 10-Q as filed with the
SEC.
"Dividend" shall have the meaning provided in Section 9.06.
"Dollar" and the sign "$" shall mean the freely transferable,
lawful currency of the United States.
"Dollar Equivalent" of an amount denominated in a currency
other than Dollars shall mean, at any time for the determination thereof, the
amount of Dollars which could be purchased with the amount of such currency
involved in such computation at the spot exchange rate therefor as quoted by the
Lender as of 11:00 A.M. (New York time) on the date two Business Days prior to
the date of any determination thereof for purchase on such date; provided that
for purposes of (x) determining compliance with Sections 1.01, 1.02 and 4.01(a),
(y) calculating Fees pursuant to Section 3.01 and (z) determining the Borrowing
Base, the Dollar Equivalent of any amounts denominated in a currency other than
Dollars shall be revalued on a monthly basis using the spot exchange rates
therefor as quoted in Reuters ECB Page 37 (or, if same does not provide such
exchange rates, on such other basis as is reasonably satisfactory to the Lender)
on the last Business Day of each calendar month. Notwithstanding anything to the
contrary contained in this definition, at any time that a Default or an Event of
Default then exists,
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the Lender may revalue the Dollar Equivalent of any amounts outstanding under
the Credit Documents in a currency other than Dollars in its sole discretion.
"Drawing" shall have the meaning provided in Section 1A.04(b).
"Effective Date" shall have the meaning provided in Section
12.09.
"Eligible Accounts Receivable" shall mean, as at any date, the
aggregate of all Accounts of the Credit Parties and Baldwin France and the
Japanese Note (the "Specified Eligible Accounts") then due and payable in
Acceptable Currency and reflected in the most recent Borrowing Base Certificate,
and not deemed by the Lender to be ineligible for inclusion in the calculation
of the Borrowing Base in accordance with the terms hereof. In determining the
amount to be so included, (x) the face amount of such Specified Eligible
Accounts shall be reduced, without duplication, by the amount of all returns,
discounts, deferred revenue, progress billings, claims, contras, credits,
charges, chargebacks, rebates or other allowances, amounts unearned and
unapplied cash (in each case whether such reductions are attributable to one or
more Specified Eligible Accounts) and (y) the amount of Specified Eligible
Accounts included shall in no event exceed the book value thereof as determined
in a manner consistent with the Credit Parties' and if applicable, Baldwin
France's or Baldwin Japan's financial statements. Unless otherwise approved in
writing by the Lender, Eligible Accounts Receivables shall not include any
Account of the Credit Parties or Baldwin France or Japanese Note:
(a) that does not arise from the sale of goods or the
performance of services by the Credit Parties in the ordinary course of
its business;
(b) (i) upon which the Credit Parties' right to receive
payment is not absolute or is contingent upon the fulfillment of any
condition whatsoever (other than installation of the subject inventory
for which a Reserve shall be established), or (ii) as to which a Credit
Party is not able to bring suit or otherwise enforce its remedies
against the Account Debtor through judicial process or other dispute
resolution mechanism, or (iii) if the Account or Japanese Note
represents a progress billing (in whole or in part, but only to the
extent of such progress billing) consisting of an invoice for goods
sold or used or services rendered pursuant to a contract under which
the Account Debtor's obligation to pay that invoice is subject to the
Credit Parties' completion of further performance under such contract
or is subject to the equitable lien of a surety bond issuer;
(c) that is subject to any defense, counterclaim, setoff
or dispute that is asserted as to each Account or Japanese Note, but
only to the extent of such setoff, counterclaim or dispute;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account or Japanese Note for
merchandise sold to or services rendered and accepted by the applicable
Account Debtor;
(e) with respect to which an invoice has not been sent to
the applicable Account Debtor;
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(f) that (i) is not owned by the Credit Parties or (ii)
is subject to any right, claim, security interest or other interest of
any other Person, other than Liens in favor of the Lender;
(g) that arises from a sale to any director, officer,
other employee or Affiliate of any Credit Party, or to any entity that
has any common officer or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is
the United States government or a political subdivision thereof, or any
state, county or municipality or department, agency or instrumentality
thereof unless the Credit Parties have complied with respect to such
obligation with the Federal Assignment of Claims Act of 1940, or any
applicable state, county or municipal law restricting the assignment
thereof with respect to such obligation;
(i) as to which (i) the Account Debtor is also a creditor
of the Parent or any of its Subsidiaries (other than Account Debtors
which have provided to the Lender a "no-offset" letter in form and
substance satisfactory to the Lender), (ii) the Account Debtor has
disputed its liability on, or the Account Debtor has made any claim
with respect to, such account or any other account due from such
Account Debtor to the Credit Parties, which has not been resolved or
(iii) the Account or Japanese Note otherwise is or is reasonably
expected to become subject to any right of setoff by the Account
Debtor;
(j) to the extent the Credit Parties or any Subsidiary
thereof is liable for goods sold or services rendered by the applicable
Account Debtor to the Credit Parties or any Subsidiary thereof but only
to the extent of the potential offset;
(k) that arises with respect to goods that are delivered
on a bill-and-hold basis or placed on consignment, guaranteed sale or
other terms (other than installation of the subject inventory as
provided in clause(b) above) by reason of which the payment by the
Account Debtor is or may be conditional;
(l) that is in default; provided, that, without limiting
the generality of the foregoing, an Account or a Japanese Note shall be
deemed in default upon the occurrence of any of the following:
(i) the Account (other than the Japanese Note,
the Specified UK Accounts and the Specified Accounts) is not
paid within 120 days following its original invoice date or
(A) if a Japanese Note is not paid within the earlier of 120
days after the issuance of such Japanese Note or 165 days
after the date of the original invoice or (B) if the Specified
UK Accounts are not paid within 270 days after the date of the
original invoice (provided that the aggregate amount
outstanding of such Accounts shall not exceed $500,000) or (C)
if the Specified Accounts are not paid within 540 days after
the date of the original invoice (provided that the aggregate
amount outstanding of such Accounts shall not exceed
$1,000,000);
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(ii) the Account Debtor obligated upon such
Account or Japanese Note suspends business, makes a general
assignment for the benefit of creditors or fails to pay its
debts generally as they come due; or
(iii) a petition is filed by or against any
Account Debtor obligated upon such Account or Japanese Note
under any bankruptcy law or any other federal, state or
foreign (including any provincial) receivership, insolvency
relief or other law or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor if 50% or
more of the Dollar Equivalent amount of all Accounts owing by the
Account Debtor are ineligible under clause (1) above;
(n) as to which any of the representations or warranties
in the Credit Documents pertaining to the Accounts or Japanese Note or
the security interest purported to be created by the Security Documents
or the Transaction contemplated by the Purchase and Sale Agreements are
untrue;
(o) to the extent such Account or Japanese Note is
evidenced by a judgment, instrument (as defined in the UCC) (other than
the Japanese Notes) or chattel paper (as defined in the UCC);
(p) as to which the Lender does not have a valid and
perfected first priority security interest and Lien;
(q) as to which the credit risk with respect to the
Account Debtor is not covered by Credit Insurance;
(r) as to which the Lender has not received, without
duplication, an acknowledgment from the Account Debtor of the Notice to
Account Debtor within 60 days of delivery of such Notice;
(s) that is the obligation of an Account Debtor located
in a jurisdiction other than an Acceptable Jurisdiction unless such
obligation is of an Account Debtor located in Excepted Jurisdictions;
provided however that such Accounts shall not exceed $2,000,000 in the
aggregate and/or $500,000 in the aggregate per Excepted Jurisdiction;
or
(t) that is otherwise unacceptable to the Lender in its
reasonable credit judgment.
"Eligible Inventory" shall mean, as at any date, the aggregate
of all Inventories of (1) the Guarantor Parents located in the United States,
(2) Baldwin U.K., Baldwin (U.K.), Acrotec UK and Baldwin Globaltec located in
the United Kingdom and (3) Baldwin Germany located in Federal Republic of
Germany (the "Specified Credit Parties") then reflected in the most recent
Borrowing Base Certificate, and not deemed by the Lender to be ineligible for
inclusion in accordance with the calculation of the Borrowing Base in accordance
with the terms hereof. The value attributed to such Inventories shall in no
event exceed the book value thereof
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as determined in a manner consistent with such Specified Credit Parties'
financial statements. Unless otherwise approved in writing by the Lender,
Eligible Inventory shall not include any Inventory of the Specified Credit
Parties:
(a) that (i) is not owned by such Specified Credit
Parties or (ii) is subject to any right, claim, security interest or
other interest of any other Person, other than Liens in favor of the
Lender;
(b) as to which any of the representations or warranties
in the Credit Documents pertaining to the Inventory or the security
interest purported to be created by the Security Documents are untrue;
(c) as to which the Lender does not have a valid and
perfected first priority security interest and Lien; or
(d) that is otherwise unacceptable to the Lender in its
reasonable credit judgment.
"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 violation (or alleged violation) by Parent or any of its
Subsidiaries under any Environmental Law or any permit issued to Parent or any
of its Subsidiaries 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 a Release of Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.
"Environmental Law" shall mean any federal, state or local
policy having the force and effect of law, statute, law, rule, regulation,
ordinance, code or rule of common law now or hereafter in effect and in each
case as amended, and any applicable, written judicial or administrative
interpretation thereof, including any applicable and binding judicial or
administrative order, consent, decree or judgment (for purposes of this
definition (collectively, "Laws")), relating to the indoor or outdoor
environment, or Hazardous Materials or health and safety to the extent such
health and safety issues arise under the Occupational Safety and Health Act of
1970, as amended, or any such similar Laws.
"Equity Interests" of any Person shall mean any and all
shares, interests, rights to purchase, warrants, options, participation or other
equivalents of or interest in (however designated) equity of such Person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest.
"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 date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
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"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Parent or a Subsidiary of Parent
would be deemed to be a "single employer" within the meaning of Section 414(b)
or (c) of the Code, and for the purpose of Section 302 or ERISA and/or Section
412, 4971, 4977 and/or each "applicable section" under Section 414(t)(2) of the
Code within the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Euro" and the sign "(euro)" shall mean the freely
transferable, lawful currency of the member states of the European Union.
"Euro Denominated Loan" shall mean any Loan denominated in
Euros.
"Eurodollar Loans" shall mean any Loan or any portion thereof
which bears interest based on the Eurodollar Rate.
"Eurodollar Rate" shall mean, with respect to each Interest
Period in respect of a Eurodollar Loan, the rate per annum (rounded upwards, if
necessary, to the nearest 1/1000 of 1%) determined by the Lender to be equal to
the quotient obtained by dividing (a) the Eurorate for such Eurodollar Loan for
such Interest Period by (b) 1 minus the Reserve Requirement for such Eurodollar
Loan for such Interest Period.
As used herein, "Eurorate" shall mean, with respect to each
Interest Period in respect of a Eurodollar Loan, as determined by the Lender,
the rate per annum (rounded upwards, if necessary, to the nearest 1/1000 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not available
with respect to any Interest Determination Date, the term "Eurorate" shall mean,
for any Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/1000 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/1000 of 1%).
"Event of Default" shall have the meaning provided in Section
10.
"Excluded Amount" shall mean $50,000.
"Excepted Jurisdiction" shall mean Australia, Austria,
Belgium, Brazil, Canada, China, Czech Republic, Denmark, Dubai, Egypt, Finland,
Hungary, Iceland, India, Ireland, Israel, Italy, Kazakhstan, Mexico, New
Zealand, Norway, Peru, Poland, Russia, Singapore, South Africa, Spain,
Switzerland, and/or Turkey.
"Exemption Regulation" shall mean the Exemption Regulation
dated 26 June 2002 of the Ministry of Finance of the Netherlands, as promulgated
in connection with the Dutch Act on the Supervision of Credit Institutions 1992,
as amended (wet toezicht kredietwezen 1992).
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"Existing Credit Agreement" shall mean that certain Amended
and Restated Credit Agreement, dated as of January 28, 2002, among the Guarantor
Parents and various financial institutions party thereto, as amended from time
to time and as in effect on the Initial Borrowing Date.
"Existing Indebtedness" shall mean all Indebtedness set forth
on Schedule 7.23 hereto.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.10.
"Federal Funds 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 Lender 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 Lender from three Federal Funds brokers of
recognized standing selected by the Lender.
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"Foreign Pension Plan" means any plan, fund (including,
without limitation, any superannuation fund) or other similar program (other
than social security or social insurance) established or maintained outside the
United States of America by Parent or any one or more of its Subsidiaries
primarily for the benefit of employees of Parent or any of its Subsidiaries
residing outside the United States of America, which plan, fund or other similar
program provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Security Agreement" shall have the meaning provided
in Section 5.09.
"Guaranteed Obligations" shall mean (i) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (a) the principal of and interest on the Revolving Notes issued by, and the
Loans made to, the Borrowers under this Agreement, and (b) all other obligations
(including obligations which, but for any automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities owing by the Borrowers to
the Lender under this Agreement and the other Credit Documents (including,
without limitation, indemnities, Fees and interest thereon), whether now
existing or hereafter incurred under, arising out of or in connection with this
Agreement or any other Credit Document, and the due performance and compliance
with the terms of the Credit Documents by the Borrowers.
"Guarantor Parents" or "Guarantor Parent" shall have the
meaning provided in the first paragraph of this Agreement.
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"Guarantor Subsidiaries" or "Guarantor Subsidiary" shall have
the meaning provided in the first paragraph of this Agreement.
"Guarantors" shall mean and include Parent, each Guarantor
Parent and Guarantor Subsidiary, acting as a guarantor pursuant to Section 13 of
this Agreement.
"Guaranty" shall mean the Guaranty provided under Section 13
of this Agreement.
"Hazardous Materials" shall mean (a) 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 (b) 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.
"Indebtedness" shall mean, as to any Person, whether recourse
is secured by or is otherwise available against all or only a portion of the
assets of such Person and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(c) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptance, or similar
facilities issued for the account of such Person,
(d) every obligation of such Person issued or assumed as
the deferred purchase price of property or services (including
securities repurchase agreements but excluding trade accounts payable
or accrued liabilities arising in the ordinary course of business which
are not overdue or which are being contested in good faith),
(e) every obligation of such Person under any Capitalized
Lease,
(f) every obligation of such Person under any Synthetic
Lease,
(g) all sales by such Person of (i) accounts or general
intangibles for money due or to become due, (ii) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (iii) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
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(h) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any Equity Interest issued by such Person or any rights
measured by the value of such Equity Interest,
(i) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement, the value of which is dependent upon interest rates,
currency exchange rates, commodities or other indices (a "derivative
contract") or any Interest Rate Protection Agreement or Other Hedging
Agreement,
(j) every obligation in respect of Indebtedness of any
other entity (including any partnership in which such Person is a
general partner) to the extent that such Person is liable therefor as a
result of such Person's ownership interest in or other relationship
with such entity, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor and such
terms are enforceable under applicable law,
(k) every obligation, contingent or otherwise, of such
Person guaranteeing, or having the economic effect of guarantying or
otherwise acting as surety for, any obligation of a type described in
any of clauses (a) through (j) the "primary obligation") of another
Person (the "primary obligor"), in any manner, whether directly or
indirectly, and including, without limitation, any obligation of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase of) any security for the payment of such primary obligation,
(ii) to purchase property, securities or services for the purpose of
assuring the payment of such primary obligation, or (iii) to maintain
working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor
to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any
time of determination represented by (i) any Indebtedness, issued at a price
that is less than the principal amount at maturity thereof, shall be the amount
of the liability in respect thereof determined in accordance with U.S. GAAP,
(ii) any Capital Lease shall be the principal component of the aggregate of the
rentals obligation under such Capital Lease payable over the term thereof that
is not subject to termination by the lessee, (iii) any sale of receivables shall
be the amount of recourse to the relevant Person or any Subsidiary in respect
thereto, (iv) any Synthetic Lease shall be the net present value of all present
and future obligations under such lease, (v) any derivative contract shall be
the maximum amount of any termination or loss payment required to be paid by
such Person if such derivative contract were, at the time of determination, to
be terminated by reason of any event of default or early termination event
thereunder, whether or not such event of default or early termination event has
in fact occurred, (vi) any equity related purchase obligation shall be the
maximum fixed redemption or purchase price thereof inclusive of any accrued and
unpaid dividends to be comprised in such redemption or purchase price and (vii)
any guaranty or other contingent liability referred to in clause (k) shall be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such guaranty or other contingent 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.
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"Indebtedness to be Refinanced" shall mean and include
Indebtedness under the Existing Credit Agreement and Indebtedness identified
with "*" or "**" on Schedule 7.28 of this Agreement, and all other Indebtedness
of Parent and its Subsidiaries outstanding immediately before the consummation
of the Transaction which is to be repaid or refinanced on the Initial Borrowing
Date, including any such Indebtedness which is not permitted to remain
outstanding after the Initial Borrowing Date pursuant to the Credit Documents.
"Initial Borrowing Date" shall mean the date (which shall
occur on the Effective Date) upon which the initial Borrowing of Loans occurs.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan or Euro Denominated Loan, the second Business Day prior to the
commencement of any Interest Period relating to such Eurodollar Loan or Euro
Denominated Loan.
"Interest Period" shall have the meaning set forth in Section
1.06(b).
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement, interest rate floor agreement or
other similar agreement or arrangement.
"Inventory" shall mean merchandise, inventory and goods, and
all additions, substitutions and replacements thereof and all accessions
thereto, wherever located, together with all goods, supplies, incidentals,
packaging materials, labels, materials and any other items used or usable in
manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and all
products and proceeds of whatever sort and wherever located any portion thereof
which may be returned, rejected, reclaimed or repossessed by the Lender from any
Credit Party's customers.
"Investment" shall have the meaning provided in the preamble
to Section 9.05.
"Japanese Note" shall mean each and all of the "Notes" as
defined in the Notes Receivable Security Agreement dated on or about the
Effective Date between Baldwin Japan and the Lender.
"Judgment Currency" shall have the meaning provided in Section
12.19(a).
"Judgment Currency Conversion Date" shall have the meaning
provided in Section 12.19(a).
"L/C Supportable Obligations" shall mean any obligation of a
Credit Party in respect of a performance bond to be provided pursuant to a
Customer Contract.
"Leasehold" of any Person shall mean all of 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.
"Leasehold Property" shall mean each Real Property leased by
the Borrowers or any of their Subsidiaries.
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"Lender" shall mean and include each financial institution
with a Commitment listed on Schedule I (as amended from time to time), as well
as any Person that becomes a "Lender" hereunder pursuant to Section 12.04(b).
"Letter of Credit" shall have the meaning provided in Section
1A.01.
"Letter of Credit Request" shall have the meaning provided in
Section 1A.03.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance, lien (statutory
or other), charge, preference, priority or other security agreement of any kind
or nature whatsoever (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under the UCC or any similar recording or notice
statute, and any lease having substantially the same effect as the foregoing).
"Loan" shall mean each Revolving Loan.
"Management Agreements" shall have the meaning provided in
Section 5.10.
"Margin Regulations" shall mean, collectively, Regulation T,
Regulation U and Regulation X.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean (i) a material adverse
effect on the business, properties, assets, nature of assets, operations,
liabilities or condition (financial or otherwise) of (A) Parent and its
Subsidiaries taken as a whole or (B) any of the Guarantor Parents and its
Subsidiaries taken as a whole, or (ii) a material adverse effect (x) on the
rights or remedies of the Lender hereunder or under any other Credit Document or
(y) on the ability of any Credit Party to perform its obligations to the Lender
hereunder or under any other Credit Document.
"Material Contracts" shall have the meaning provided in
Section 7.22.
"Minimum Borrowing Amount" shall mean $500,000.
"Monthly Payment Date" shall mean the last Business Day of
each calendar month.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean (i) a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, which is maintained or contributed to
(or to which there is an obligation to contribute to) by Parent or a Subsidiary
of Parent or an ERISA Affiliate and that is subject to Title IV of ERISA, and
(ii) each such plan for the five-year period immediately following the latest
date on which Parent, a Subsidiary of Parent or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
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"Net Debt Proceeds" shall mean, with respect to any incurrence
of Indebtedness by any Person, the cash proceeds (net of underwriting discounts
and commissions, reasonable legal fees, investment banking and consulting fees
and other reasonable costs and expenses associated therewith) received by such
Person from the respective incurrence of such Indebtedness.
"Net Sale Proceeds" shall mean for any sale or other
disposition of assets, the gross cash proceeds (including any cash received by
way of deferred payment pursuant to a promissory note, receivable or otherwise,
but only as and when received) received from such sale or other disposition of
assets, net of (i) reasonable transaction costs (including, without limitation,
any underwriting, brokerage or other customary selling commissions, reasonable
legal, advisory and other fees and expenses (including title and recording
expenses), associated therewith and sales, VAT and transfer taxes arising
therefrom), (ii) payments of unassumed liabilities relating to the assets sold
or otherwise disposed of at the time of, or within 30 days after, the date of
such sale or other disposition, (iii) the amount of such gross cash proceeds
required to be used to permanently repay any Indebtedness (other than
Indebtedness of the Lender pursuant to this Agreement) which is secured by the
respective assets which were sold or otherwise disposed of, and (iv) the
estimated net marginal increase in income taxes which will be payable by
Parent's consolidated group or any Subsidiary of Parent with respect to the
fiscal year in which the sale or other disposition.
"Non-Credit Party Affiliate" shall mean any affiliate of the
Borrower that is not a Credit Party.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
"Notice to Account Debtors" shall mean a notice in
substantially the form of Exhibit L to this Agreement.
"Notice to Bank" shall mean a notice in substantially the form
of Exhibit M to this Agreement.
"Obligation Currency" shall have the meaning provided in
Section 12.19(a).
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Lender pursuant to the terms of this Agreement or any other Credit
Document.
"Original Accounts" shall have the meaning provided in Section
7.28 of this Agreement.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.
"Parent" shall mean Baldwin Technology Company, Inc., a
Delaware corporation.
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"Parent Common Stock" shall have the meaning provided in
Section 7.13(a) of this Agreement.
"Payment Date" shall mean the first, third and last Business
Day of each week.
"Payment Office" shall mean the office of the Lender located
at Feuerbachstrasse 26-32, 60325 Frankfurt am Main, Germany
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Business" shall mean any business which is the
same, similar, ancillary or reasonably related to the business in which Parent
or any of its Subsidiaries is engaged on the Effective Date.
"Permitted Liens" shall have the meaning provided in Section
9.03.
"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 pension plan as defined in Section 3(2)
of ERISA (other than a Multiemployer Plan), which is maintained or contributed
to by (or to which there is an obligation to contribute of) Parent or a
Subsidiary of Parent or an ERISA Affiliate, and each such plan for the five-year
period immediately following the latest date on which Parent, or a Subsidiary of
Parent or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section
5.07.
"Pledge Agreement Collateral" shall mean all of the
"Collateral" as defined in the Pledge Agreement.
"PMP" shall mean "professional market party" within the
meaning of the Exemption Regulation.
"Policy Guidelines" shall mean the Dutch Central Bank's Policy
Guidelines (issued in relation to the Exemption Regulation) dated 10 July 2002
(beleidsregel kernbegrippen markttoetreding en handhaving wtk 1992).
"Preferred Equity," as applied to the Equity Interests of any
Person, means Equity Interests of such Person (other than common stock of such
Person) of any class or classes (however designed) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to Equity
Interests of any other class of such Person.
Prime Lending Rate" shall mean the rate which JPMorgan Chase
Bank (or another bank of recognized standing reasonably selected by the Lender)
announces from time to
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time as its prime lending rate, the Prime Lending Rate to change when and as
such prime lending rate changes. The Prime Lending Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. JPMorgan Chase Bank may make commercial loans or other loans at rates
of interest at, above or below the Prime Lending Rate.
"Pro Forma Financial Statements" shall have the meaning
provided in Section 5.12(a).
"Projections" shall have the meaning provided in Section
5.12(b).
"Property" of a Person means any and all property, whether
real, personal, tangible, intangible or mixed, of such Person, or other assets
owned, leased, or operated by such Person.
"Purchase and Sale Agreements" shall mean, collectively, (i)
the Purchase and Sale Agreement (U.S.) dated as of July 25, 2003 between Baldwin
Graphic and the Borrower, (ii) the Purchase and Sale Agreement (Germany) dated
as of July 25, 2003 between Baldwin Germany and the Borrower, (iii) the Purchase
and Sale Agreement (Sweden) dated as of July 25, 2003 among Baldwin Sweden,
Baldwin IVT, Baldwin Jimek and the Borrower, (iv) the Purchase and Sale
Agreement (U.K.) dated as of July 25, 2003 among Baldwin U.K, Baldwin (UK),
Acrotec UK, Baldwin Globaltec and the Borrower, and (v) the Purchase and Sale
Agreement (France) dated as of July 25, 2003 between Baldwin France and the
Borrower, and the "Purchaser Notes" and "Debt Certificates" and notes issued
under any such Purchase and Sale Agreement.
"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.
"Recovery Event" shall mean the receipt by Parent or any of
its Subsidiaries of any insurance or condemnation proceeds payable under any
Credit Insurance.
"Refinancing" shall mean and include the various refinancing
transactions described in Section 5.06(a).
"Refinancing Documents" shall mean all of the agreements,
documents and instruments executed or delivered in connection with the
Refinancing.
"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 T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from to time in effect and any
successor to all or any portion thereof.
"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.
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"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or any portion thereof.
"Reimbursement Agreements" shall mean each and all of the
Reimbursement Agreements, dated as of July 25, 2003, by and between a Guarantor
Subsidiary and the Borrower.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or upon any land or water or air, or
otherwise entering into the environment.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.
"Required Lenders" shall mean, at any time, the Lenders
holding at least 50% of the outstanding Loans and unused Commitment.
"Reserve Requirement" shall mean, at any time, the maximum
rate at which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Eurodollar Rate is to be determined, or (ii) any category of
extensions of credit or other assets which include Eurodollar Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Reserve Requirement.
"Returns" shall have the meaning provided in Section 7.20.
"Revolving Loan" shall have the meaning provided in Section
1.01(a).
"Revolving Loan Maturity Date" shall mean August 15, 2005, or
the Anniversary Date if the Lender shall have delivered a notice to terminate
the Commitment pursuant to Section 3.03 of this Agreement, or the date specified
on the Borrower's notice to terminate the Commitment pursuant to Section 3.02 of
this Agreement.
"Revolving Note" shall have the meaning provided in Section
1.05.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of McGraw Hill, Inc.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
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"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in
Section 5.08.
"Security Agreement Collateral" shall mean all collateral in
which any security interest is granted pursuant to the Security Agreements.
"Security Document" shall mean and include the Security
Agreement, the Pledge Agreements, the Custody Agreement, the Account Control
Agreement, each Foreign Security Agreement and, after the execution and delivery
thereof, each Additional Security Document.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.10.
"Specified UK Account" shall mean the Accounts as to which the
Account Debtor is Mitsubishi Litho Presses UK Ltd. and/or Komori UK Ltd.
"Specified Account" shall mean the Account as to which the
Account Debtor is Koenig and Bauer Aktiengesellschaft and/or MAN Roland
Druckmaschinen.
"Stated Amount" of each Letter of Credit shall, at any time,
mean the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met, but after giving effect to all previous drawings made thereunder).
"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 one or more Subsidiaries of such Person and (ii) any
partnership, association, limited liability company, joint venture or other
entity (other than a corporation) in which such Person directly or indirectly
through one or more Subsidiaries of such Person, has more than a 50% Equity
Interest at the time.
"Synthetic Lease" shall mean, as applied to any Person, any
lease (including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed), (i) that is not a capital lease in
accordance with GAAP and (ii) in respect of which the lessee retains or obtains
ownership of the property so leased for federal income tax purposes, other than
any such lease under which that Person is the lessor.
"Tax Allocation Agreements" shall have the meaning provided in
Section 5.10.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Total Unutilized Commitment" shall mean, at any time, an
amount equal to the Commitment as in effect at such time less the sum of (i) the
aggregate amount of all Loans
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outstanding and (ii) the Stated Amount of each Letter or Credit and any Unpaid
Drawings relating thereto.
"Transaction" shall mean, collectively, (i) the consummation
of the Refinancing, (ii) the entering into of the Credit Documents and the
incurrence of all Loans on the Initial Borrowing Date, and (iii) the payment of
fees and expenses in connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction.
"Unfunded Current Liability" shall mean the amount, if any, by
which the actuarial present value of accumulated benefits of any Plan subject to
Title IV of ERISA as of the close of its most recent plan year, determined using
actuarial assumptions at such time consistent with those prescribed by Financial
Account Standards No. 87, exceeds the fair market value of the assets allocable
to such liabilities.
"Unpaid Drawing" shall have the meaning provided in Section
1A.04(a).
"Unrestricted Cash" shall mean all cash and Cash Equivalents
owned or held by Parent and its Subsidiaries.
"Unutilized Commitment" shall mean, for the Lender at any
time, the Commitment of the Lender at such time less the sum of (i) the
aggregate principal amount of all Loans made by the Lender and then outstanding
and (ii) the Stated Amount of each Letter of Credit and any Unpaid Drawings
relating thereto.
"U.S." or "United States" shall mean the United States of
America.
"U.S. Dollars," "Dollars" and the sign "$" shall each mean
freely transferable lawful money of the United States of America.
"U.S. GAAP" shall mean generally accepted accounting
principles in the United States of America as in effect from time to time.
"Written" (whether lower or upper case) or "in writing" shall
mean any form of written communication or a communication by means of telex,
facsimile device, telegraph or cable.
11.02 Rules of Interpretation. In each Credit Document, unless
otherwise indicated:
(a) each reference to, and the definition of, any
document (including any Loan Document) shall be deemed to refer to such
document as it may be amended, supplemented, revised or modified from
time to time in accordance with its terms and, to the extent
applicable, the terms of this Agreement;
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(b) each reference to a law or governmental approval
shall be deemed to refer to such law or governmental approval as the
same may be amended, supplemented or otherwise modified from time to
time;
(c) any reference to a Person in any capacity includes a
reference to its permitted successors and assigns in such capacity and,
in the case of any governmental authority, any Person succeeding to any
of its functions and capacities;
(d) references to days shall refer to calendar days
unless Business Days are specified; references to weeks, months or
years shall be to calendar weeks, months or years, respectively;
(e) all references to a "Section," "Appendix," "Annex,"
"Schedule" or "Exhibit" are to a Section of such Credit Document or to
an Appendix, Annex, Schedule or Exhibit attached thereto;
(f) the table of contents and Section headings and other
captions therein are for the purpose of reference only and do not
affect the interpretation of such Credit Document;
(g) defined terms in the singular shall include the
plural and vice versa, and the masculine, feminine or neuter gender
shall include all genders;
(h) the words "hereof", "herein" and "hereunder", and
words of similar import, when used in any Credit Document, shall refer
to such Credit Document as a whole and not to any particular provision
of such Credit Document;
(i) the words "include," "includes" and "including" are
deemed to be followed by the phrase "without limitation";
(j) where the terms of any Credit Document require that
the approval, opinion, consent or other input of the Lender be
obtained, such requirement shall be deemed satisfied only where the
requisite approval, opinion, consent or other input is given by or on
behalf of the relevant party in writing;
(k) whenever the phrase "material compliance" is used, it
shall be interpreted to mean that either the entity is in full
compliance with the requirement or that any failure of the entity to be
in compliance in all respects with the requirement could not reasonably
be expected alone or together with all other such failures and all of
the facts and circumstances to have a Material Adverse Effect;
(l) all reference to "knowledge" of a Person shall mean
the knowledge or actual awareness of such Person of the subject matter
in question after due inquiry and investigation;
(m) the Credit Documents may use several different
limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative
and shall be performed in accordance with their terms.
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Unless otherwise expressly provided herein, any reference to any action
of the Lender by way of consent, approval or waiver shall be deemed
modified by the phrase "in its/their sole discretion;"
(n) the Credit Documents are the result of negotiations
among and have been reviewed by counsel to the Credit Parties and the
Lender, and are the products of all such Persons. Accordingly, they
shall not be construed against the Lender merely because of any such
Person's involvement in their preparation;
(o) any reference to (i) any Purchase and Sale Agreement
shall mean such Purchase and Sale Agreement, and (ii) any Reimbursement
Agreement shall mean such Reimbursement, in each case, as in effect as
of the Initial Borrowing Date, without regard to any subsequent
amendment, supplement or modification thereto; and
(p) any reference in this Agreement and the other Credit
Document to "Baldwin Japan" or "Baldwin Japan Ltd." shall also mean and
include "Japan-Baldwin Ltd." and "Nippon Baldwin Kafushihi Kaisha".
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. Subject to the limitations set
forth in Section 14 below, the Credit Parties jointly and severally agree to:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Lender (including, without
limitation, the reasonable fees and disbursements of White & Case LLP and local
and foreign counsel) in connection with the negotiation, preparation, execution
and delivery of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein and of the Lender in connection
with any amendment, waiver or consent relating hereto or thereto (ii) pay all
reasonable out-of-pocket costs and expenses of the Lender 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 counsel and fees, costs or other payments made to the Custodian) and the
protection of the rights of the Lender thereunder (including, without
limitation, the reasonable fees and disbursements of counsel (including in-house
counsel) for the Lender); (iii) pay and hold the Lender harmless from and
against any and all present and future stamp, documentary, transfer, sales and
use, value added, excise and other similar taxes with respect to the foregoing
matters, the performance of any obligation under this Agreement or any other
Credit Document or any payment thereunder, and save the Lender 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 the Lender) to pay such
taxes; and (iv) indemnify the Lender, its officers, directors, employees,
representatives, trustees and agents from and hold each of them harmless against
any and all liabilities, obligations (including removal or remedial actions),
losses, damages, penalties, claims, actions, costs, expenses and disbursements
incurred by, imposed on or assessed against any of them as a result of, or
arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not the Lender is a
party thereto and whether or not any such investigation, litigation or other
proceeding is between or among the Lender, any Credit Party or any third Person
or otherwise) related to the entering into and/or performance of this Agreement
or any other Credit Document or the use of any Loans hereunder
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or the Transaction or the consummation of any other transactions contemplated by
any Credit Document or the exercise or enforcement of any of their rights or
remedies provided herein (but excluding any such liabilities, obligations,
losses, damages, penalties, claims, actions, costs, expenses and disbursements
to the extent incurred by reason of the gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final and
non-appealable decision) of the Person to be indemnified), or (b) 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 at any time owned, leased
or operated by any Credit Party or any of its Subsidiaries, the Release,
generation, storage, transportation, handling or disposal of Hazardous Materials
by any Credit Party at any location, whether or not owned, leased or operated by
any Credit Party or any of its Subsidiaries, the non-compliance of any Real
Property owned, leased or operated by any Credit Party or any of tits
Subsidiaries with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any Real
Property, or any Environmental Claim in connection with or relating to any
Credit Party, any of its Subsidiaries or any of their operations or activities
or any such Real Property at any time owned, leased or operated by any Credit
Party or any of its Subsidiaries, in each case, including, without limitation,
the reasonable fees and disbursements of counsel and independent consultants
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such liabilities, obligations, losses, damages,
penalties, claims, actions, costs, expenses and disbursements to the extent
incurred by reason of the gross negligence or willful misconduct (as determined
by a court of competent jurisdiction in a final and non-appealable decision) of
the Person to be indemnified)). To the extent that the undertaking to indemnify,
pay or hold harmless the Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Credit
Parties hereby agree to make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible under
applicable law.
12.02 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, the
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Credit Party or
any of its Subsidiaries or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by the
Lender (including, without limitation, by branches and agencies of the Lender
wherever located) to or for the credit or the account of any such Credit Party
or any of its Subsidiaries against and on account of the Obligations and
liabilities of any such Credit Party or such Subsidiary, as the case may be, to
the Lender under this Agreement or under any of the other Credit Documents, 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 the
Lender shall have made any demand hereunder and although said Obligations shall
be contingent or unmatured. The Borrower agrees that the Lender purchasing
participations in one or more Loans made to it, may, to the fullest extent
permitted by law, exercise all rights (including without limitation the right of
setoff) with respect to such participations as fully as if the Lender is a
direct creditor of the Borrower with respect to such participations in the
amount thereof.
12.03 Notices. (a) Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including telegraphic,
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telex, facsimile or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered: if to any Credit Party, at the address
specified opposite its signature below; if to the Lender, at its address
specified for the Lender on Schedule II or at such other address as shall be
designated by the Lender in a written notice to Borrower Representative. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied or cabled or sent by overnight courier, and shall be effective when
received.
(b) Without in any way limiting the obligation of any
Credit Party and its Subsidiaries to confirm in writing any telephonic notice
permitted to be given hereunder, the Lender may prior to receipt of written
confirmation act without liability upon the basis of such telephonic notice,
believed by the Lender in good faith to be from an Authorized Officer. In each
such case, each of the Credit Parties hereby waive the right to dispute the
Lender's record of the terms of such telephonic notice.
12.04 Benefit of Agreement; Assignment. (a) This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto; provided, however, no
Credit Party may assign or transfer any of its rights, obligations or interest
hereunder or under any other Credit Document without the prior written consent
of each of the Lenders.
(b) The Lender may, without the consent of any Credit
Party, sell or assign any part of the Loan of the Lender and the other rights
and obligations of the Lender to any Person or any assignee thereof (an
"Assignee"); provided that any such sale or assignment shall be in an amount not
less than $5,000,000 and whole increments thereof and the Assignee shall
represent and warrant that it is a PMP at the time of the sale or assignment.
The assigning Lender and the Assignee shall enter into an assignment and
assumption agreement in form and substance satisfactory to such parties (the
"Assignment and Assumption Agreement"), with respect to the sale or assignment
of the Loan to be assigned and upon execution and delivery of such Assignment
and Assumption Agreement, (i) the Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Assumption Agreement, shall have the rights
and obligations of the Lender hereunder and under the other Credit Documents,
and this Agreement shall be deemed to be amended to the extent, but only to the
extent, necessary to effect the addition of the Assignee, and any reference to
the assigning Lender hereunder or under the other Credit Documents shall
thereafter refer to the Lender and to the Assignee to the extent of their
respective interests, and (ii) the assigning Lender shall, to the extent that
rights and obligations hereunder and under the other Credit Documents have been
assigned by it pursuant to such assignment agreement, relinquish its rights and
be released from its obligations under the Credit Documents. To the extent that
an assignment of all or any portion of the Loan pursuant to this Section
12.04(b) would, at the time of such assignment, result in increased costs under
Section 4.04 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, in accordance with and pursuant to the
other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
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(c) The Lender may, without the consent of any Credit
Party, sell participations to one or more banks or other entities (other than
the Credit Parties or any of their Affiliates) in or to all or a portion of its
rights and obligations under this Agreement and the Lender's Revolving Note;
provided, however, that (i) such participant represent, and warrant, that it is
a PMP at the time such participation becomes effective, (ii) the Lender's
obligations under this Agreement shall remain unchanged, (iii) the Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iv) the Lender shall remain the holder of any such Revolving
Note for all purposes of this Agreement, (v) the Borrower and the other Lender
shall continue to deal solely and directly with the Lender in connection with
the Lender's rights and obligations under this Agreement and (vi) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Revolving Note, or any consent
to any departure by the Borrower therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on, the
Revolving Note or any fees or other amounts payable hereunder, or release all or
substantially all of the Collateral, in each case to the extent subject to such
participation, or postpone any date fixed for any payment of principal of, or
interest on, the Revolving Notes or any fees or other amounts payable hereunder,
in each case to the extent subject to such participation. The Borrower agrees
that each participant shall be entitled to the benefits of Sections 1.08, 1.09
and 4.04 of this Agreement with respect to its participating interest. To the
extent that participation of all or any portion of the Loan pursuant to this
Section 12.04(c) would, at the time of such participation, result in increased
costs under Section 4.04 from those being charged by the respective Lender prior
to such participation, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower, in accordance with and pursuant to the
other provisions of this Agreement, shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective participation).
(d) Notwithstanding any other provision contained in this
Agreement or any other Credit Document to the contrary, the Lender may assign
all or any portion of the Loan held by it as collateral security, provided that
(i) such assignee shall represent and warrant that it is a PMP at the time of
such assignment and (ii) any payment in respect of such assigned Loan or
Revolving Note made by the Borrowers to or for the account of the assigning or
pledging Lender in accordance with the terms of this Agreement shall satisfy the
Borrowers' obligations hereunder in respect to such assigned Loan or Revolving
Note to the extent of such payment. No such assignment shall release the
assigning Lender from its obligations hereunder.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Lender in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between any Credit
Party and the 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 Lender would otherwise have. No notice to or demand
on any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Lender to any other or further action in any
circumstances without notice or demand.
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12.06 Computations. The financial statements to be furnished
to the Lender pursuant hereto shall be made and prepared in accordance with U.S.
GAAP consistently applied throughout the periods involved (except as set forth
in the notes thereto or as otherwise disclosed in writing by the Credit Parties
to the Lenders).
12.07 Governing Law; Submission to Jurisdiction; Venue. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN
CERTAIN OF THE SECURITY DOCUMENTS, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document shall be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, in each case located within the City of New York and, by
execution and delivery of this Agreement, each Credit Party hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Credit Party
hereby irrevocably designates, appoints and empowers Samuel B. Fortenbaugh,
Esq., with offices on the date hereof at 1211 Avenue of the Americas, 27th
Floor, New York, NY 10036, as its designee, appointee and agent to receive,
accept and acknowledge for and on its behalf, and in respect of its property,
service of any and all legal process, summons, notices and documents which may
be served in any such action or proceeding. If for any reason such designee,
appointee and agent shall cease to be available to act as such, each Credit
Party agrees to designate a new designee, appointee and agent in New York City
on the terms and for the purposes of this provision reasonably satisfactory to
the Lender under this Agreement. Each Credit Party hereby further irrevocably
waives any claim that any such courts lack jurisdiction over such Credit Party,
and agrees not to plead or claim, in any legal action or proceeding with respect
to this Agreement or any other Credit Document brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such Credit Party. Each
Credit Party further irrevocably consents to the service of process in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to such Credit Party, as the case may be, at its address
for notices pursuant to Section 12.03, such service to become effective when
received. Each Credit Party hereby irrevocably waives any objection to such
service of process and further irrevocably waives and agrees not to plead or
claim in any action or proceeding commenced hereunder or under any other Credit
Document that service of process was in any way invalid or ineffective. Nothing
herein shall affect the right of the Lender or the holder of any Revolving Note
to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Credit Party in any other
jurisdiction.
(b) EACH CREDIT PARTY 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
CLAUSE (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.
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12.08 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 instrument. A
complete set of counterparts executed by all the parties hereto shall be lodged
with each Credit Party and the Lender.
12.09 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which each of the Credit Parties and the
Lender shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same (including by way of facsimile)
to the Lender or at the office of the Lender's counsel.
12.10 Headings Descriptive. The headings of the several
sections and subsections 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.
12.11 Amendment or Waiver, etc. Neither this Agreement nor any
other Credit Document 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 respective Credit Parties party thereto and the
Required Lenders; except that any change or amendment to Section 1.06, 1.07,
1.08, 4 or this Section 12.11 of the definitions of "Eligible Accounts
Receivable" or "Required Lender" shall require the consent of each Lender.
12.12 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.08, 1.09, 4.04 and 12.01, shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans and the other Obligations.
12.13 Domicile of Loans and Commitments. The Lender may
transfer and carry its Loans and/or Commitments at, to or for the account of any
branch office, subsidiary or affiliate of the Lender. Notwithstanding anything
to the contrary contained herein, to the extent that a transfer of Loans
pursuant to this Section 12.13 would, at the time of such transfer, result in
increased costs under Section 1.08, 1.09 or 4.04 from those being charged by the
respective Lender prior to such transfer, 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 transfer).
12.14 Confidentiality. (a) Subject to Section 12.14(d), the
Lender agrees that it will use its reasonable efforts not to disclose without
the prior consent of any Credit Party (other than to its directors, employees,
auditors, counsel or other professional advisors, to affiliates or to another
Lender if the Lender or the Lender's holding or parent company in its sole
discretion determines that any such party should have access to such
information) any information with respect to Parent or any of its Subsidiaries
which is now or in the future furnished pursuant to this Agreement, provided
that the Lender may disclose any such information (a) as has become generally
available to the public, (b) as may be required (x) in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over the Lender or to the Federal Reserve Board or
the Federal Deposit Insurance Corporation or similar organizations (whether in
the United States or elsewhere) or their successors or (y) in connection with
any request or requirement of any such regulatory body, (c)
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as may be required in response to any summons or subpoena or in connection with
any litigation, (d) to comply with any law, order, regulation or ruling
applicable to the Lender, and (e) to any creditor or any prospective transferee
or participant in connection with any contemplated transfer or participation of
any of the Obligations or any interest therein by the Lender; provided that such
creditor or prospective transferee or participant agrees to be bound by this
Section 12.14 to the same extent as the Lender.
(b) Each Credit Party hereby acknowledges and agrees that
the Lender may share with any of its affiliates or its investment advisors any
information related to Parent or any of its Subsidiaries (including, without
limitation, any nonpublic customer information regarding the creditworthiness of
such entities), provided that such Persons shall be subject to the provisions of
this Section 12.14 to the same extent as the Lender and shall only use such
information in connection with matters relating to this Agreement.
(c) Each Credit Party hereby represents and acknowledges
that, to the best of its knowledge, neither the Lender, nor any employees or
agents of, or other persons affiliated with, the Lender, have directly or
indirectly made or provided any statement (oral or written) to such Credit Party
or to any of its employees or agents, or other persons affiliated with or
related to such Credit Party (or, so far as such Credit Party is aware, to any
other person), as to the potential tax consequences of the Transaction.
(d) The Lender has not provided accounting, tax or legal
advice. Notwithstanding any express or implied claims of exclusivity or
proprietary rights, each Credit Party and the Lender hereby agree and
acknowledge that each Credit Party and the Lender (and each of their employees,
representatives or other agents) are authorized to disclose to any and all
persons, beginning immediately upon commencement of their discussions and
without limitation of any kind, the tax treatment and tax structure of the
Transaction, and all materials of any kind (including opinions or other tax
analyses) that are provided to any Credit Party or the Lender relating to such
tax treatment and tax structure. In this regard, each Credit Party and the
Lender acknowledge and agree that the disclosure of the tax treatment and tax
structure of the Transaction is not limited in any way by an express or implied
understanding or agreement, oral or written (whether or not such understanding
or agreement is legally binding). For purposes of this authorization, "tax"
means United States Federal income tax, "tax treatment" means the purported or
claimed Federal income tax treatment of the transaction, and "tax structure"
means any fact that may be relevant to understanding the purported or claimed
Federal income tax treatment of the transaction. This paragraph is intended to
reflect the understanding of each Credit Party and the Lender that the
Transaction is not a "confidential transaction" as that phrase is used in
Treasury Regulation Section 1.6011-4(b)(3)(i), and shall be interpreted in a
manner consistent therewith. Nothing herein is intended to imply that any of
each Credit Party and the Lender made or provided a statement, oral or written,
to, or for the benefit of, any of each other as to any potential tax
consequences that are related to, or may result from, the Transaction.
12.15 Waiver of Jury Trial. 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.
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12.16 Waiver of Damages. Each of the Credit Parties waives any
claim it may now or hereafter have against the Lender for any consequential,
exemplary or punitive damages in connection with or relating to this Agreement
or the other Credit Documents.
12.17 English Language. This Agreement and all other Credit
Documents shall be in the English language, except as required by applicable
local law (in which event certified English translations thereof shall, upon the
request of the Parent be provided by the Lender to the Parent). All documents,
certificates, reports or notices to be delivered or communications to be given
or made by any party hereto pursuant to the terms of this Agreement or any other
Credit Document shall be in the English language or, if originally written in
another language, shall, upon request of the Lender, be accompanied by an
accurate English translation upon which the other parties hereto shall have the
right to rely for all purposes of this Agreement and the other Credit Documents.
12.18 Waiver of Sovereign Immunity. Each of the Credit
Parties, in respect of itself, its Subsidiaries, its process agents, and its
properties and revenues, hereby irrevocably agrees that, to the extent that such
Credit Party, its Subsidiaries or any of its properties has or may hereafter
acquire any right of immunity, whether characterized as sovereign immunity or
otherwise, from any legal proceedings, whether in the United States or
elsewhere, to enforce or collect upon the Loans or any Credit Document or any
other liability or obligation of such Credit Party or any of its Subsidiaries
related to or arising from the transactions contemplated by any of the Credit
Documents, including, without limitation, immunity from service of process,
immunity from jurisdiction or judgment of any court or tribunal, immunity from
execution of a judgment, and immunity of any of its property from attachment
prior to any entry of judgment, or from attachment in aid of execution upon a
judgment, such Credit Party, for itself and on behalf of its Subsidiaries,
hereby expressly waives, to the fullest extent permissible under applicable law,
any such immunity, and agrees not to assert any such right or claim in any such
proceeding, whether in the United States or elsewhere. Without limiting the
generality of the foregoing, each Credit Party further agrees that the waivers
set forth in this Section 12.18 shall have the fullest extent permitted under
the Foreign Sovereign Immunities Act of 1976 of the United States and are
intended to be irrevocable for purposes of such Act.
12.19 Judgment Currency. (a) The Credit Parties' obligations
hereunder and under the other Credit Documents to make payments in Dollars (the
"Obligation Currency") shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Lender of the full amount of
the Obligation Currency expressed to be payable to the Lender under this
Agreement or the other Credit Documents. If for the purpose of obtaining or
enforcing judgment against any Credit Party in any court or in any jurisdiction,
it becomes necessary to convert into or from any currency other than the
Obligation Currency (such other currency being hereinafter referred to as the
"Judgment Currency") an amount due in the Obligation Currency, the conversion
shall be made, at the Dollar Equivalent thereof, as the case may be, and, in the
case of other currencies, the rate of exchange (as quoted by the Lender or if
the Lender does not quote a rate of exchange on such currency, by a known dealer
in such currency designated by the Lender) determined, in each case, as of the
day on which the judgment is given (such day being hereinafter referred to as
the "Judgment Currency Conversion Date").
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(b) If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, each Credit Party covenants and agrees to pay, or
cause to be paid, such additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate or exchange prevailing on the Judgment Currency
Conversion Date.
(c) For purposes of determining the Dollar Equivalent or
any other rate of exchange for this Section, such amounts shall include any
premium and costs payable in connection with the purchase of the Obligation
Currency.
12.20 Maple Bank GmbH as a German Bank. The Lender represents
and warrants that it is a duly registered German bank.
12.21 Notification to and Acknowledgments from Credit Parties.
The Borrower hereby notifies each of the Credit Parties that it has assigned all
of its right, title and interest in, to and under the Purchase and Sale
Agreements to the Lender pursuant to the terms of the Security Documents and
each of the Credit Parties acknowledges to the aforesaid notice.
12.22 Pay Off by the Borrower. By its execution delivery of
this Agreement, BAPC hereby acknowledges and agrees that all outstanding loans
made by BAPC in favor of the Borrower pursuant to the Loan Agreement dated
October 1, 1999 between BAPC and the Borrower have been paid in full, except
such amount as identified on Part II of Schedule 7.23 with respect thereto which
may remain outstanding pursuant to Section 9.04 hereof.
SECTION 13. Guaranty.
13.01 The Guaranty. In order to induce the Lender to enter
into this Agreement and to extend credit hereunder, and in recognition of the
direct benefits to be received by the Credit Parties from the proceeds of the
Loans and/or the issuance of the Letters of Credit, each of Parent, BAC, BEC,
BAPC, Baldwin U.K., Baldwin (UK), Acrotec UK, Baldwin Globaltec, Baldwin Jimek,
Baldwin IVT, Baldwin Sweden, Baldwin Germany, Baldwin Graphic and Baldwin Japan
hereby agrees as follows: Each of Parent, BAC, BEC, BAPC, Baldwin U.K., Baldwin
(UK), Acrotec UK, Baldwin Globaltec, Baldwin Jimek, Baldwin IVT, Baldwin Sweden,
Baldwin Germany, Baldwin Graphic and Baldwin Japan hereby unconditionally and
irrevocably, jointly and severally, as a Guarantor, guarantees (subject to the
limitations set forth in Section 14 below) the full and prompt payment when due,
whether upon maturity, by acceleration or otherwise, of any and all Obligations
of the Borrower. If any or all of the Obligations of Borrower to the Lender
becomes due and payable hereunder, each of the Guarantors unconditionally
promises (subject to the limitations set forth in Section 14 below) to pay such
Guaranteed Obligations to the Lender, or order, on demand, together with any and
all reasonable expenses which may be incurred by the Lender in collecting any of
the Obligations. This guaranty constitutes a guaranty of payment and not of
collection, and applies to all Obligations of the Credit Parties arising in
connection with this Agreement and the other Credit Documents, in each case,
heretofore, now, or hereafter made, incurred or created, whether
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voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such Guaranteed
Obligations are from time to time reduced, or extinguished and thereafter
increased or incurred, whether the Credit Parties may be liable individually or
jointly with others, whether or not recovery upon such Guaranteed Obligations
may be or hereafter become barred by any statute of limitations, and whether or
not such Guaranteed Obligations may be or hereafter become otherwise
unenforceable.
13.02 Bankruptcy. Additionally, each of the Guarantors
(subject to the limitations set forth in Section 14 below) unconditionally and
irrevocably, jointly and severally, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Lender whether or not due or
payable by the Borrower upon the occurrence in respect of the other Credit
Parties of any of the events specified in Section 10.05, and unconditionally and
irrevocably, jointly and severally, promises to pay all such Guaranteed
Obligations to the Lender, or order, on demand, in lawful money of the United
States.
13.03 Nature of Liability. The liability of each of the
Guarantors hereunder is exclusive and independent of any security for or other
guaranty of the Lenders of the other Credit Parties whether executed by the
Credit Parties, any other guarantor or by any other party, and the liability of
each of the Guarantors hereunder shall not be affected or impaired by (a) any
direction as to application of payment by the other Credit Parties or by any
other party, or (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations of the other Credit Parties, or (c) any payment on or in reduction
of any such other guaranty or undertaking, or (d) any dissolution, termination
or increase, decrease or change in personnel by the other Credit Parties, or (e)
any payment made to the Lender on the Guaranteed Obligations which the Lender
repays to the other Credit Parties pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Credit Parties waives any right to the deferral or modification of
its obligations hereunder by reason of any such proceeding.
13.04 Independent Obligation. The obligations of each of the
Guarantors hereunder are independent of the obligations of any other guarantor
or the other Credit Parties, and a separate action or actions may be brought and
prosecuted against any of the Credit Parties whether or not action is brought
against any other guarantor or the other Credit Parties and whether or not any
other guarantor or the other Credit Parties be joined in any such action or
actions. Each of the Guarantors waives, to the fullest extent permitted by law,
the benefit of any statute of limitations affecting its liability hereunder or
the enforcement thereof. Any payment by the other Credit Parties or other
circumstance which operates to toll any statute of limitations as to the other
Credit Parties shall, to the fullest extent permitted by law, operate to toll
the statute of limitations as to the Credit Parties.
13.05 Authorization. Each of the Guarantors authorizes the
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) subject to the prior agreement of the other Credit
Parties (to the extent required by this Agreement), change the manner,
place or terms of payment of, and/or change or extend the time of
payment of, renew, increase, accelerate or alter, any of the
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Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the Guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;
(b) take and hold security for the payment of the
Guaranteed Obligations and sell, exchange, release, surrender, realize
upon or otherwise deal with in any manner and in any order any property
by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights
against the other Credit Parties or others or otherwise act or refrain
from acting;
(d) release or substitute any one or more endorsers,
guarantors, the other Credit Parties or other obligors;
(e) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the other Credit
Parties to its creditors other than the Lender;
(f) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of the other Credit Parties to
the Lender regardless of what liability or liabilities of the other
Credit Parties remain unpaid; and/or
(g) consent to or waive any breach of, or any act,
omission or default under, this Agreement or any of the instruments or
agreements referred to herein, or, with the agreement of the other
Credit Parties, amend, modify or supplement this Agreement or any of
such other instruments or agreements.
13.06 Reliance. It is not necessary for the Lender to inquire
into the capacity or powers of the other Credit Parties or its Subsidiaries or
the officers, directors, partners or agent acting or purporting to act on its
behalf, and any Guaranteed Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
13.07 Subordination. Any obligations of the other Credit
Parties now or hereafter owing to the Guarantors are hereby subordinated in
right of payment to the Guaranteed Obligations of the other Credit Parties owing
to the Lender; provided that payment may be made by the other Credit Parties on
any such obligations owing to the Guarantors so long as the same is not
prohibited by this Agreement; and provided further, that if the Lender so
requests at a time when an Event of Default exists, all such obligations of the
other Credit Parties to the Guarantors shall be collected, enforced and received
by the Guarantors as trustee for the Lender and be paid over to the Lender on
account of the Guaranteed Obligations of the other Credit Parties to the Lender,
but without affecting or impairing in any manner the liability of the Guarantor
under the other provisions of this Guaranty. Prior to the transfer by the
Guarantors of any note or
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negotiable instrument evidencing any obligations of the other Credit Parties to
the Guarantors, the Guarantors shall mark such note or negotiable instrument
with a legend that the same is subject to this subordination.
13.08 Waiver. (a) Each of the Guarantors waives any right
(except as shall be required by applicable statute and cannot be waived) to
require the Lender to (i) proceed against the other Credit Parties, any other
guarantor or any other party, (ii) proceed against or exhaust any security held
from the other Credit Parties, any other guarantor or any other party or (iii)
pursue any other remedy in the Lender's power whatsoever. Each of the Guarantors
waives any defense that it may have including any based on or arising out of any
defense of the other Credit Parties, any other guarantor or any other party
other than payment in full of the Guaranteed Obligations, including, without
limitation, any defense based on or arising out of the disability of any Credit
Party, any other guarantor or any other party, or the unenforceability of the
Guaranteed Obligations, this Guaranty or any part thereof from any cause, or the
cessation from any cause of the liability of the Credit Parties or any defense,
setoff, counterclaim, deduction, limitation or termination whatsoever by reason
of the invalidity, illegality or unenforceability of the Guaranteed Obligations,
this Guaranty or otherwise, or any other event or circumstance which, whether or
not similar to any of the foregoing, might otherwise constitute a defense
available to, or a discharge or release of, the Credit Parties, any of the
Guarantors or any other guarantor or surety other than payment in full of the
Guaranteed Obligations. The Lender may, at its election, foreclose on any
security held by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the Lender
may have against the other Credit Parties or any other party, or any security,
without affecting or impairing in any way the liability of the Guarantors
hereunder except to the extent the Guaranteed Obligations have been paid. Each
of the Guarantors waives, to the fullest extent permitted by law, any defense
arising out of any such election by the Lender, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of the Guarantor against the other Credit Parties or any
other party or any security. Each of the Guarantors acknowledges that no party
including the Lender or the Credit Parties has made any representations to such
Guarantor on which it has relied in giving this Guaranty.
Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of the other Credit
Parties' financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope
and extent of the risks which it assumes and incurs hereunder, and agrees that
no Lender shall have any duty to advise it of information known to them
regarding such circumstances or risks.
SECTION 14. Limitation of Liability.
14.01 UK Guarantee Limitations. Each Credit Party represents,
warrants and covenants that the guarantees, obligations, liabilities and
undertakings by any Credit Party or any of its Subsidiaries, or deemed guarantor
under the law, incorporated in England and Wales (an
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"English Company") under this Agreement or the other Credit Documents are not
and shall not be undertaken or incurred to the extent that the same would
constitute unlawful financial assistance for the purchase of its shares within
the meaning of Section 151 of the UK Companies Act 1985.
14.02 US Guarantee Limitations. (a) Each Credit Party,
Guarantor, or deemed guarantor under the law, incorporated in the United States
of America or any State thereof (a "US Company") and the Lender (by its
acceptance of the benefits of this guarantee) hereby confirms that it is its
intention that this guarantee not constitute a fraudulent transfer or conveyance
for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, each US Company and the Lender (by its
acceptance of the benefits of this guarantee) hereby irrevocably agrees that the
obligations guaranteed by such guarantor shall be limited to such amount as
will, after giving effect to such maximum amount and all other (contingent or
otherwise) liabilities of such US Company that are relevant under such laws and
after giving effect to any rights to contribution pursuant to any agreement
providing for an equitable contribution among such US Company and the other
guarantors, result in the guaranteed obligations of such US Company in respect
of such maximum amount not constituting a fraudulent transfer or conveyance.
(b) The guaranties by or obligations, liabilities and
undertakings of any US Company under this Agreement shall be limited to the
higher of (1) the proceeds derived by such US Company from the Borrower at any
time prior to the date of any demand by the Lender for payment by such US
Company under the Guarantee issued by such US Company, (2) an amount to be
determined at the time of such US Company becoming a Guarantor on the basis of a
bona fide reasoned analysis of the financial and business situation of such US
Company at that time by its board of directors and (3) a reasonable percentage,
similarly determined, of the net worth (as defined in the Guarantee issued by
such US Company), at any time, of such US Company.
14.03 German Guarantee Limitations. (a) To any guarantor, or
deemed guarantor and/or surety provider under the law, incorporated under the
laws of the Federal Republic of Germany and constituted in the form of a German
limited liability company ("Gesellschaft mit beschrankter Haftung-GmbH") (a
"German Company") the following shall apply:
(i) German Company and the Lender agree that the
enforcement of any obligation to make a payment due under this
Agreement or due under any other obligation related to this
Agreement, as far as such obligation arises solely out of a
guarantee or other surety, or deemed guarantee or surety under
the law, for a direct or indirect shareholder or any
subsidiary of such shareholder, which is no subsidiary of the
respective German Company (the "German Company Claims") shall
at all times be limited if and to the extent that, in relation
to a German Company, such enforcement would be in respect of
an amount which exceeds the higher of
(A) Euro 19,183,390 (the "Base Net
Assets"), and
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(B) the amount which is equal to the
difference (if positive) between such German
Company's net assets (including, for the avoidance of
doubt, the amount corresponding to its Stammkapital)
as per the end of the calendar month preceding the
date of enforcement of the guarantee and indemnity
(the "Current Net Assets") and its stated share
capital ("Stammkapital"), and
(C) the amount owed by such German
Company to the Borrower pursuant to intra company
loans at the time claim is made against it under this
Agreement,
provided that for the purposes of the
calculation of the Current Net Assets the following
balance sheet items shall be adjusted as follows:
(1) funds borrowed by the Borrower
under this Agreement which have been onlent
to the relevant German Company and loans
provided to the relevant Germany Company by
any Credit Parties as far as such onlent
funds or loans are subordinated or qualify
under Section 32 a GmbH-Act shall be
disregarded; and
(2) loans and other contractual
liabilities incurred in violation of the
provisions of this Agreement shall be
disregarded; and
(3) the amount of any increase of the
registered share capital ("Stammkapital") of
the relevant Germany Company after the
Effective Date shall be deducted from the
relevant registered share capital
("Stammkapital"), unless such increase has
been undertaken with the express written
consent of the Lender that shall not be
unreasonably withheld.
(ii) In addition, the relevant Germany Company
shall, if and to the extent legally permitted
(A) in a situation where the relevant
German Company does not have sufficient assets to
maintain its stated share capital ("Stammkapital")
realize any and all of its assets that are shown in
the balance sheet with a book value ("Buchwert") that
is significantly lower than the market value of the
asset if such asset is reasonably not considered to
be necessary for the business of the relevant German
Company ("betriebsnotwendig"), and
(B) take otherwise any measures
(including, without limitation, set-off of claims) to
ensure that the realisation of the German Company
Claims does not cause its net assets to be reduced
below the amount of its stated share capital which is
protected by Section 30 and 31 GmbH - Act.
(b) Each German Company may at any time request by giving
written notice to the Lender that the amount of the Base Net Assets is reduced
to an amount (the "Reduced
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Amount") corresponding to the amount of such German Company's Current Net Assets
(to be determined as set out in clause (a) above) less or plus, as the case may
be, any decrease or increase to be reasonably expected in the course of a period
of one month from the date of receipt by the Lender of the notice (the "Notice
Period"). Together with any such written request, the relevant German Company
shall provide the Lender with reasonable evidence (substantially applying the
rules applicable for setting up a statement of overindebtedness
("Uberschuldungsstatus") showing the German Company's Current Net Assets
position (to be determined as set out in clause (a) above), and shall further
provide the Lender with a written confirmation setting out the German Company's
projected net assets as per the end of the Notice Period and stating the reasons
therefor in reasonable detail. Upon the lapse of the Notice Period, the Base Net
Assets shall be deemed to correspond to the Reduced Amount, unless the Lender
has terminated this Agreement in accordance with the provisions of this
Agreement and notified the respective German Company thereof before the lapse of
such Notice Period.
14.04 Swedish Guarantee Limitations. The guarantees,
obligations, liabilities and undertakings by any Credit Party or any of its
Subsidiaries incorporated in the Kingdom of Sweden (a "Swedish Company") under
this Agreement or the other Credit Documents are only valid and only apply to
the extent that the same would not constitute a violation of Chapter 12, of the
Swedish Companies Act (Sw: Aktiebolagslag 1975:1385), and all other guarantees,
obligations, liabilities and undertakings incurred on a joint and several basis
by any Swedish Company under this Agreement shall be limited accordingly.
* * * *
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
12 Commerce Drive BALDWIN EUROPE CONSOLIDATED B.V.,
Shelton, CT 06484 as Borrower
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500 By_____________________________
Name:
Title:
By_____________________________
Name:
Title:
12 Commerce Drive BALDWIN TECHNOLOGY COMPANY, INC.,
Shelton, CT 06484 as Parent, Guarantor and Parent
Attn: President Representative
Tel: (203) 402-1000
Fax: (203) 402-5500 By_____________________________
Name:
Title:
12 Commerce Drive BALDWIN AMERICAS CORPORATION,
Shelton, CT 06484 as Guarantor
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500 By_____________________________
Name:
Title:
12 Commerce Drive BALDWIN EUROPE CONSOLIDATED INC.,
Shelton, CT 06484 as Guarantor
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500 By_____________________________
Name:
Title:
12 Commerce Drive BALDWIN ASIA PACIFIC CORPORATION,
Shelton, CT 06484 as Guarantor
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500 By_____________________________
Name:
Title:
12 Commerce Drive BALDWIN GRAPHIC SYSTEM INC.,
Shelton, CT 06484 as Guarantor
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500 By_____________________________
Name:
Title:
Derchinger Strasse 137 BALDWIN GERMANY GMBH, as Guarantor
D-86165 Augsburg
Germany
Attn: Managing Director By_____________________________
Tel: +49-821-794-200 Name:
Fax: +49-821-794-2222 Title:
With a copy to:
Baldwin Technology Company, Inc.
12 Commerce Drive
Shelton, CT 06484
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500
Unit 13 Apex Business Centre EXECUTED as a DEED by
Boscombe Road BALDWIN U.K. HOLDING LIMITED,
Dunstable Bedfordshire LU5 4SB as Guarantor
England
Attn: Managing Director
Tel: +44-1582-477499 By_____________________________
Fax: +44-1582-478510 as attorney-in-fact under a
power of attorney dated ____
With a copy to:
Baldwin Technology Company, Inc.
12 Commerce Drive By_____________________________
Shelton, CT 06484 Name:
Attn: President Title:
Tel: (203) 402-1000
Fax: (203) 402-5500
Unit 13 Apex Business Centre EXECUTED as a DEED by
Boscombe Road BALDWIN (U.K.) LTD., as Guarantor
Dunstable Bedfordshire LU5 4SB
England
Attn: Managing Director By_____________________________
Tel: +44-1582-477499 as attorney-in-fact under a
Fax: +44-1582-478510 power of attorney dated ____
With a copy to:
Baldwin Technology Company, Inc. By_____________________________
12 Commerce Drive Name:
Shelton, CT 06484 Title:
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500
22 Wessex Trade Centre EXECUTED as a DEED by
Poole, Dorset BH12 3PQ ACROTEC UK LTD., as Guarantor
England
Attn: Managing Director
Tel: +44-1202-739030 By_____________________________
Fax: +44-1202-739040 as attorney-in-fact under a
power of attorney dated ____
With a copy to:
Baldwin Technology Company, Inc.
12 Commerce Drive By_____________________________
Shelton, CT 06484 Name:
Attn: President Title:
Tel: (203) 402-1000
Fax: (203) 402-5500
22 Wessex Trade Centre EXECUTED as a DEED by
Poole, Dorset BH12 3PQ BALDWIN GLOBALTEC LTD., as
England Guarantor
Attn: Managing Director
Tel: +44-1202-739030 By_____________________________
Fax: +44-1202-739040 as attorney-in-fact under a
power of attorney dated ____
With a copy to:
Baldwin Technology Company, Inc.
12 Commerce Drive By_____________________________
Shelton, CT 06484 Name:
Attn: President Title:
Tel: (203) 402-1000
Fax: (203) 402-5500
Stoerydsvagen 13 BALDWIN SWEDEN HOLDING AB, as
Box 6 Guarantor
573 21 Tranas
Sweden By_____________________________
Attn: Managing Director Name:
Tel: +46-140-14190 Title:
Fax: +46-140-17609
With a copy to:
Baldwin Technology Company, Inc.
12 Commerce Drive
Shelton, CT 06484
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500
Stoerydsvagen 13 BALDWIN IVT AB, as Guarantor
Box 6
573 21 Tranas
Sweden By_____________________________
Attn: Managing Director Name:
Tel: +46-140-14190 Title:
Fax: +46-140-17609
With a copy to:
Baldwin Technology Company, Inc.
12 Commerce Drive
Shelton, CT 06484
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500
Testvagen 16 BALDWIN JIMEK AB, as Guarantor
S-232 37 Arlov
Sweden
Attn: Managing Director By_____________________________
Tel: +46-40-43-98-00 Name:
Fax: +46-40-43-98-10 Title:
With a copy to:
Baldwin Technology Company, Inc.
12 Commerce Drive
Shelton, CT 06484
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500
4-34 Toyo 2-chome Kohtoh-ku JAPAN-BALDWIN LTD., as Guarantor
Tokyo 135-8384
Japan
Attn: Managing Director By_____________________________
Tel: +81-3-5606-2771 Name:
Fax: +81-3-5606-2779 Title:
With a copy to:
Baldwin Technology Company, Inc.
12 Commerce Drive
Shelton, CT 06484
Attn: President
Tel: (203) 402-1000
Fax: (203) 402-5500
MAPLE BANK GmbH, as Lender
By_____________________________
Name:
Title:
By_____________________________
Name:
Title:
SCHEDULE I
LIST OF LENDER AND COMMITMENT
Lender Commitment
- ------ ----------
Maple Bank GmbH $ 20,000,000
SCHEDULE II
LENDER ADDRESS
Lender Address
Maple Bank GmbH Feuerbachstrasse 26-32
6025 Frankfurt am Main
Germany
Attn: Credit Department - Oliver Lenauer
Telephone: + 0049 (0) 69 97166-289
Facsimile: + 0049 (0) 69 97166-330
e-mail: OLenauer@maplebank.com
with a copy to:
Maple Trade Finance Corp. 10 Exchange Place
Suite 2600
Jersey City, NJ 07302
U.S.A.
Attn: Keith Stapleton
Telephone: (201) 369-3030
Facsimile: (201) 369-3072