Exhibit 99(c)(3)
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
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LOAN AGREEMENT
by and between
QMS, INC.
and
MINOLTA CO., LTD.
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Dated as of June 7, 1999
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Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
LOAN AGREEMENT, dated as of June 7, 1999, by and between QMS,
INC., a Delaware corporation (the "BORROWER"), and Minolta Co., Ltd., a Japanese
corporation (together with its successors and permitted assigns, the "LENDER").
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Share Purchase
Agreement (as amended from time to time, the "SUBSIDIARIES STOCK PURCHASE
AGREEMENT"), dated as of May 17, 1999, with Alto Imaging Group N.V. and Jalak
Investments B.V., for the purchase of all of the issued and outstanding shares
of the capital stock of QMS Europe B.V., a company organized and existing under
the laws of The Netherlands ("QMS EUROPE"), and QMS Australia PTY Ltd., a
company organized and existing under the laws of Victoria, Australia ("QMS
AUSTRALIA");
WHEREAS, the Lender and Borrower have entered into a Stock
Purchase Agreement, of even date herewith, for the purchase of two million one
hundred and thirty thousand (2,130,000) shares of common stock, par value $0.01
per share, of the Borrower, representing approximately nineteen and nine-tenths
of a percent (19.9%) of all issued and outstanding shares of the capital stock
of the Borrower (as amended from time to time, the "BORROWER STOCK PURCHASE
AGREEMENT"); and
WHEREAS, to finance a portion of the purchase price of the
capital stock of QMS Europe and QMS Australia, the Borrower has requested that
the Lender make available, and the Lender has agreed to make available, a term
loan facility under which the Lender makes a term loan to the Borrower of up to
twelve million and eight hundred thousand Dollars ($12,800,000) in aggregate
principal amount outstanding upon the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
Article I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms have
the following meanings:
"AFFILIATE" means, as to any Person, any other Person which, directly
or indirectly, controls, is controlled by or is under common control with such
Person and includes each officer, director, general partner or joint-venturer of
such Person, and each Person who is
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Minolta Co., Ltd.
QMS, Inc.
the beneficial owner of ten percent (10%) or more of any class of voting Stock
of such Person. For the purposes of this definition, "control" means the
possession of the power to direct or cause the direction of management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"AGREEMENT" means this Loan Agreement, together with all Exhibits and
Schedules hereto, as the same may be amended, supplemented or otherwise modified
from time to time.
"APPLICABLE MARGIN" means, as of any date, a rate equal to two and
one-half percent (2.5%) per annum; PROVIDED, HOWEVER, that, in the event
pursuant to SECTION 2.8 the Loan bear interest by reference to the Base Rate,
the "APPLICABLE MARGIN" shall be zero.
"AUSTRALIAN STOCK PLEDGE AGREEMENT" means the Share Mortgage,
substantially in the form of EXHIBIT B-1 hereto, dated as of the date hereof, by
and between the Borrower and the Lender, pursuant to which the Borrower grants
to the Lender a first-priority equitable interest on one hundred percent (100%)
of all of the issued and outstanding share capital of QMS Australia, as such
agreement may be amended, supplemented or modified from time to time.
"BASE RATE" means, on any day, a fluctuating interest rate per annum as
shall be in effect from time to time equal to the U.S. "prime rate" as published
in the WALL STREET JOURNAL on the most recent Business Day.
"BORROWER" has the meaning ascribed to such term in the preamble
hereto.
"BORROWER STOCK PURCHASE AGREEMENT" has the meaning ascribed to such
term in the recitals hereto.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized to close in New York City or Tokyo and a day on which dealings in
Dollar deposits are also carried on in the London interbank market.
"CHANGE OF CONTROL" means any of the following:
(a) The acquisition, other than by the Lender or its Affiliates, by any
Person or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the U.S.
Securities Exchange Act of 1934 (as amended, the "EXCHANGE ACT")) of beneficial
ownership of twenty-five percent (25%) or more of the outstanding voting
securities of the Borrower, but excluding, for this purpose, any such
acquisition if, at the time of such acquisition, the Lender together with its
Affiliates owns at least a majority of the outstanding voting securities of the
Borrower on a fully-diluted basis.
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Minolta Co., Ltd.
QMS, Inc.
(b) Individuals who, as of the date hereof, constitute the Board of
Directors of the Borrower (the "INCUMBENT BOARD") cease for any reason to
constitute at least a majority of such Board; PROVIDED, HOWEVER, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election, by the Borrower's stockholders was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Borrower (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act);
PROVIDED, HOWEVER, that any that any individual becoming a director subsequent
to the date hereof who shall have been elected or nominated for election by the
Lender (including, without limitation, pursuant to SECTION 2.3 of the Borrower
Stock Purchase Agreement) shall be considered as though such individual were a
member of the Incumbent Board.
(c) Approval by the stockholders of the Borrower of a reorganization,
merger or consolidation, in each case with respect to which all or substantially
all of the individuals and entities who were the respective beneficial owners of
the voting securities of the Borrower immediately prior to such reorganization,
merger or consolidation do not, following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than fifty percent
(50%) of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the corporation
resulting from such reorganization, merger or consolidation.
(d) The sale or other disposition of all or substantially all the
assets of the Borrower in one transaction or series of related transactions.
(e) An agreement to the effect of any of the foregoing.
"CLOSING" means the funding of the Loan pursuant to SECTION 2.1(b) upon
fulfillment of the applicable conditions set forth in ARTICLE 3.
"CLOSING DATE" means the date on which the Closing occurs, which is
anticipated to occur on June 7, 1999, or such later date as the Lender and the
Borrower may mutually agree.
"COLLATERAL" means the shares in which the Lender has a perfected
first-priority security interest (or a first-priority equitable interest, as the
case may be) pursuant to the Stock Pledge Agreements .
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens with respect to the payment of Taxes, assessments or
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Minolta Co., Ltd.
QMS, Inc.
governmental charges in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP consistently applied;
(ii) Statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being., maintained in accordance with
GAAP consistently applied;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with worker's compensation, unemployment
insurance or other types of social security benefits or to secure the
performance of bids, tenders, sales, contracts (other than for the
repayment of borrowed money), surety, appeal and performance bonds and
contractual landlord liens; PROVIDED, HOWEVER, that (A) all such Liens
do not in the aggregate materially detract from the value of the
Borrower's assets or property or materially impair the use thereof in
the operation of its business, and (B) all Liens of attachment or
judgment and Liens securing bonds to stay judgments or in connection
with appeals do not secure at any time an aggregate amount exceeding
one million Dollars ($1,000,000); and
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not materially
interfere with the ordinary conduct of the business of the Borrower.
"DEBT" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services, (iv)
obligations as lessee under leases which shall have been or should be recorded
as capital leases in accordance with GAAP consistently applied, and the present
value of all future rental payments under all synthetic leases and (v)
obligations under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (i) through (iv) above.
"DEFAULT" means an event which, with the giving of notice or lapse of
time, or both, would constitute an Event of Default.
"DOLLARS" and "$" mean the lawful money of the United States of
America.
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Minolta Co., Ltd.
QMS, Inc.
"EUROPEAN STOCK PLEDGE AGREEMENT" means the Stock Pledge Agreement,
substantially in the form of EXHIBIT B-2 hereto, dated as of the date hereof, by
and between the Borrower and the Lender, pursuant to which the Borrower grants
to the Lender a perfected first priority security interest on one hundred
percent (100%) of all of the issued and outstanding share capital of QMS Europe,
as such agreement may be amended, supplemented or modified from time to time.
"EVENT OF DEFAULT" means any of the occurrences set forth in SECTION
6.1 after the expiration of any applicable grace period and the giving of any
applicable notice, in each case as expressly provided in SECTION 6.1.
"FOOTHILL CREDIT FACILITY" means the Loan and Security Agreement, dated
as of November 7, 1995, by and between the Borrower and Foothill Capital
Corporation, as amended.
"GAAP" means generally accepted accounting principles utilized in the
United States, as set forth in the Statement on Auditing Standards No. 69
entitled "The Meaning of Present Fairly in Conformity with Generally Accepted
Accounting Principles in the Independent Auditors Report" promulgated by the
American Institute of Certified Public Accountants (or any successor statement
or amendment thereto) in effect on the date hereof unless otherwise specified
herein as in effect on another date or dates.
"INDEMNITEES" has the meaning ascribed to such term in SECTION 7.9.
"INTEREST PAYMENT DATE" means the last day of each Interest Period.
"INTEREST PERIOD" means the time period from the eleventh (11th) day of
each calendar month through the tenth (10th) day of the next succeeding calendar
month; PROVIDED, HOWEVER, that (a) if any Interest Period would otherwise expire
on a day which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day or, if such Business Day falls in the next calendar
month, on the next preceding Business Day, (b) each successive Interest Period
shall commence on the day on which the next preceding Interest Period expires
and (c) when interest first accrues to any Obligation, the first "INTEREST
PERIOD" in respect of such Obligation shall be the time period from the time
such interest first accrues until the tenth (10th) day of the next succeeding
calendar month.
"INTEREST RATE DETERMINATION DATE" has the meaning ascribed to such
term in SECTION 2.8(a).
"LENDER" has the meaning ascribed to such term in the preamble hereto.
"LENDING OFFICE" means the office or offices of the Lender set forth
opposite such Lender's name under the heading "Lending Office" on the signature
pages hereof or such
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Minolta Co., Ltd.
QMS, Inc.
other office or offices of such Lender as it may from time to time specify by
written notice to the Borrower.
"LIBO RATE" means, with respect to any applicable Interest Period, an
interest rate per annum determined by the Lender to be the British Banker's
Association's London interbank offered rate (rounded upward to the nearest whole
multiple of one sixteenth (1/16) of one percent (1%) per annum) for deposits in
Dollars for the applicable Interest Period which appears on Dow ▇▇▇▇▇ Markets
Telerate Page 3750 (or any successor page) at approximately 11:00 A.M. (London
time) on the second full Business Day next preceding the first day of such
Interest Period (unless such date is not a Business Day, in which event the next
succeeding Business Day will be used) as the London interbank offered rate for
deposits in Dollars for a term comparable to such Interest Period. In the event
that such rate does not appear on Dow ▇▇▇▇▇ Markets Telerate Page 3750 (or on
any successor page or otherwise on the Dow ▇▇▇▇▇ Markets screen), the LIBO Rate
for the purposes of this definition shall be determined by reference to such
other comparable publicly available service for displaying LIBO rates as may be
selected by the Lender.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Debt or other obligation, including, without limitation, any
conditional sale or other title retention agreement, the interest of a lessor
under leases which shall have been or should be, in accordance with GAAP
consistently applied, recorded as capital leases, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing,
under the UCC or comparable law of any jurisdiction, of any financing statement
naming the owner of the asset to which such Lien relates as debtor.
"LOAN" has the meaning ascribed to such term in SECTION 2.1(a).
"LOAN DOCUMENTS" means this Agreement, the Note, the Stock Pledge
Agreements and any other document or instrument executed and delivered by the
Borrower or the Lender in connection with this Agreement.
"NOTE" has the meaning ascribed to such term in SECTION 2.1(a).
"OBLIGATIONS" means all loans, advances, debts, liabilities,
obligations, covenants and duties of any kind or nature, present or future,
whether or not evidenced by any note, guaranty or other instrument, due to the
Lender from Borrower, arising under this Agreement, the Note, the other Loan
Documents, whether or not for the payment of money, whether arising by reason of
an extension of credit, opening of a letter of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
(including those acquired by assignment), absolute or contingent, due or to
become due, now or hereafter arising and however acquired, together with all
interest, charges, expenses, attorneys' fees and other sums chargeable to the
Borrower under this Agreement (it being understood and agreed that "OBLIGATIONS"
shall not include obligations of the Borrower to the Lender in respect of trade
payables that do not arise out of or in connection with this Agreement or the
other Loan Documents).
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"PERMITTED CREDIT FACILITIES" means either (i) a revolving credit
facility to be made available to the Borrower after the Closing Date, which
facility (A) shall have a termination date at least three (3) years after the
Closing Date, (B) shall provide for loans and other financial accommodations for
the Borrower for an aggregate principal amount not in excess of thirty million
Dollars ($30,000,000), (C) may be secured by a first-priority security interest
or first-priority equitable interest in the assets of the Borrower other than
the Collateral and (D) is on terms and conditions reasonably satisfactory to the
Lender or (ii) the Foothill Credit Facility; PROVIDED, HOWEVER, that (A) such
facility is amended to authorize the transactions contemplated in the Borrower
Stock Purchase Agreement, this Loan Agreement and the other Loan Documents and
(B) such facility is otherwise amended to meet the requirements of clause (i) of
this definition.
"QMS AUSTRALIA" has the meaning ascribed to such term in the recitals
hereto.
"QMS EUROPE" has the meaning ascribed to such term in the recitals
hereto.
"STOCK PLEDGE AGREEMENTS" means the European Stock Pledge Agreement and
the Australian Stock Pledge Agreement.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of more than fifty percent (50%) of the issued and outstanding capital
stock having ordinary voting power to elect a majority of the board of
directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person (irrespective of whether, at the time, Stock of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency).
"SUBSIDIARIES STOCK PURCHASE AGREEMENT" has the meaning ascribed to
such term in the recitals hereto.
"TAXES" has the meaning ascribed to such term in SECTION 2.9(a).
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Minolta Co., Ltd.
QMS, Inc.
"TERMINATION DATE" means the day which is the earlier of (A) June 10,
2003 or (B) the payment in full of the Obligations.
"UCC" means the Uniform Commercial Code as enacted in the State of New
York, as it may be amended from time to time.
1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"FROM" means "from and including", the words "TO" and "UNTIL" each mean "to but
excluding" and the word "THROUGH" means "to and including".
1.3 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP consistently applied and all
accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP
consistently applied.
1.4 CERTAIN TERMS. The words "HEREIN," "HEREOF" and "HEREUNDER" and
other words of similar import refer to this Agreement as a whole, and not to any
particular Article, Section, subsection or clause in this Agreement. References
herein to an Exhibit, Schedule, Article, Section, subsection or clause refer to
the appropriate Exhibit or Schedule to, or Article, Section, subsection or
clause in this Agreement.
Article 2
AMOUNT AND TERM OF THE LOAN
2.1 THE LOAN: THE NOTE. The Lender agrees, on the terms and subject to
the conditions hereinafter set forth, to make a term loan to the Borrower in the
aggregate principal amount of up to twelve million eight hundred thousand
Dollars ($12,800,000) (the "LOAN"). The Loan shall be evidenced by a promissory
note of the Borrower to the Lender substantially in the form of EXHIBIT A hereto
delivered to the Lender pursuant to ARTICLE 3 (Conditions of Lending) (the
"NOTE"), which Note shall evidence the Borrower's promise to repay principal and
interest on the Loan.
(b) Upon fulfillment of the applicable conditions set forth in ARTICLE
3 (Conditions of Lending), the Lender shall make the Loan available to the
Borrower in immediately available funds.
2.2 USE OF PROCEEDS. The Borrower shall apply proceeds of the Loan
solely to pay in full all obligations outstanding under the Foothill Credit
Facility, to fund a portion of the Cash Balance under the Subsidiaries Share
Purchase Agreement (and as defined therein) and to pay in full expenses incurred
in connection therewith and with this Agreement;
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Minolta Co., Ltd.
QMS, Inc.
PROVIDED, HOWEVER, that the Borrower shall not be required to pay in full all
obligations outstanding under the Foothill Credit Facility in the event the
Foothill Credit Facility has become a Permitted Credit Facilities within sixty
(60) days after the Closing Date.
2.3 REPAYMENT OF LOAN; EVIDENCE OF DEBT. (a) The Borrower shall repay
the Loan in thirty-five (35) equal installments of three hundred fifty five
thousand five hundred Dollars ($355,500) due on the tenth (10th) day of each
calendar month starting on the full calendar month next succeeding the first
anniversary of the Closing Date until May 10, 2003 and the Borrower shall repay
the entire unpaid principal amount of the Loan on the Termination Date, and
agrees to pay in cash all unpaid interest accrued thereon, in accordance with
the terms of this Agreement and the Note, and further agrees that all
outstanding Obligations shall be paid in full on or before the Termination Date.
(b) The Lender shall maintain an account evidencing any Debt of the
Borrower to the Lender resulting from the Loan, including, without limitation,
the amounts of principal and interest payable and paid to the Lender from time
to time under this Agreement. The entries made in such account shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations recorded therein; PROVIDED, HOWEVER, that the failure
of the Lender to maintain such an account or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Loan in accordance
with its terms.
2.4 OPTIONAL PREPAYMENTS. The Borrower shall have no right to prepay
the principal amount of the Loan other than as provided in this SECTION 2.4. The
Borrower may, upon at least two (2) Business Days' prior written notice (seven
(7) Business Day's prior written notice in the case of a payment in full of the
Loan) to the Lender stating the proposed date and principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding principal amount of the Loan in whole or in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid;
PROVIDED, HOWEVER, that (x) each partial prepayment shall be in an aggregate
principal amount not less than one hundred thousand Dollars ($100,000), (y) any
Loan may only be prepaid in whole or in part (i) on the expiration date of the
then applicable Interest Period or (ii) upon payment of the amounts described in
SECTION 2.8(d) (Compensation) and (z) any optional prepayment made under this
SECTION 2.4 will be applied, FIRST, to any unpaid accrued interest to the date
of such prepayment on the principal amount prepaid and, SECOND, to installments
due hereunder in the inverse order of their maturity.
2.5 MANDATORY PREPAYMENTS. Immediately upon the occurrence of any
Change of Control, the outstanding principal of the Loan and all interest
thereon and all other amounts payable under this Agreement and the Note shall
become and be forthwith due and payable, including, without limitation, any
amounts payable pursuant to SECTION 2.8 (Special Interest Rate Provisions),
without presentment, demand, protest or further notice
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of any kind, all of which are hereby expressly waived by the Borrower.
2.6 INTEREST ON THE LOAN AND OTHER OBLIGATIONS.
(a) RATE OF INTEREST. The Loan and the outstanding principal balance of
all other Obligations shall bear interest on the unpaid principal amount thereof
from the date such Loan was made and such other Obligations are due and payable
until paid in full, except as otherwise provided in SECTION 2.6(c) (Default
Interest) and except that such interest rate shall not exceed the maximum rate
permitted by applicable law, at a rate per annum equal to the sum of (A) the
LIBO Rate determined for the applicable Interest Period PLUS (B) the Applicable
Margin.
(b) INTEREST PAYMENTS. Interest accrued on the Loan or all other
Obligations shall be payable in arrears (i) on each applicable Interest Payment
Date, (ii) upon the payment or prepayment thereof in full or in part and (iii)
if not theretofore paid in full, at maturity (whether by acceleration or
otherwise) of such Loan or when such other Obligation otherwise becomes due and
payable (whether by acceleration or otherwise).
(c) DEFAULT INTEREST. Notwithstanding the rates of interest specified
in SECTION 2.6(a) or elsewhere in this Agreement, effective immediately upon (i)
the occurrence of an Event of Default described in SECTION 6.1(a) or (b) or (ii)
the occurrence of any other Event of Default and notice from the Lender of the
effectiveness of this SECTION 2.6(c), and for as long thereafter as such Event
of Default shall be continuing, the principal balance of the Loan and all other
Obligations shall bear interest at a rate equal to two percent (2%) per annum in
excess of the LIBO Rate PLUS the Applicable Margin.
2.7 PAYMENTS AND COMPUTATIONS. (a) The Borrower shall make each
payment, hereunder and under the Note, of principal and interest on the Loan and
other Obligations without condition or reservation of right, in immediately
available funds, not later than 11:00 A.M. (New York City time) on the day when
due in Dollars to the Lender at its address referred to in SECTION 7.2 (Notices,
Etc.).
(b) All computations of interest shall be made by the Lender on the
basis of a three hundred and sixty (360)-day year and the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest is payable. Each determination by the Lender of an interest
rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder or under the Note shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included in
the computation of payment of interest; PROVIDED, HOWEVER, that if such
extension would cause payment of interest on or principal of the Loan to be made
in the next following calendar month, such
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payment shall be made on the next preceding Business Day.
2.8 SPECIAL INTEREST RATE PROVISIONS.
(a) DETERMINATION OF INTEREST RATE. As soon as practicable on the
second Business Day prior to the first day of each Interest Period (the
"INTEREST RATE DETERMINATION DATE"), the Lender shall determine (pursuant to the
procedures set forth in the definition of "LIBO RATE") the interest rate which
shall apply to the principal amount of the Loan for which an interest rate is
then being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to the
Borrower. The Lender's determination shall be presumed to be correct, absent
manifest error, and shall be binding upon the Borrower.
(b) INTEREST RATE UNASCERTAINABLE, INADEQUATE OR UNFAIR. In the event
that at least one (1) Business Day before the Interest Rate Determination Date:
(i) The Lender determines that adequate and fair means do not
exist for ascertaining the applicable interest rates by reference to which the
LIBO Rate then being determined is to be fixed; or
(ii) The LIBO Rate for the Loan will not adequately reflect
the cost to the Lender of obtaining funds in Dollars in the London interbank
market in the amount substantially equal to such Loan in Dollars and for a
period equal to such Interest Period;
then the Lender shall forthwith give notice thereof to the Borrower, whereupon
(until the Lender notifies the Borrower that the circumstances giving rise to
such conversion no longer exist) the Loan shall bear interest at the Base Rate
PLUS the Applicable Margin.
(c) ILLEGALITY. If at any time the Lender determines (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties) that the making or continuation of the Loan at the LIBO Rate
has become unlawful or impermissible by compliance by the Lender with any law,
governmental rule, regulation or order of any governmental authority (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful or would result in costs or penalties), then, and in any such event,
the Lender may give notice of that determination, in writing, to the Borrower,
whereupon (until the Lender notifies the Borrower that the circumstances giving
rise to such conversion no longer exist) the Loan shall bear interest at the
Base Rate PLUS the Applicable Margin. If at any time after the Lender gives
notice under this SECTION 2.8(C) the Lender determines that the Loan may
lawfully bear interest at the LIBO Rate, the Lender shall promptly give notice
of that determination, in writing, to the Borrower. The Loan shall, upon receipt
of such notice pursuant to SECTION 7.2 (Notices, Etc.), bear interest at the
LIBO Rate.
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(d) COMPENSATION. In addition to all amounts required to be paid by the
Borrower pursuant to SECTION 2.6 (Interest on the Loan and Other Obligations),
the Borrower shall compensate the Lender, upon demand, for all losses, expenses
and liabilities (including, without limitation, any loss or expense incurred by
reason of the liquidation or reemployment of funds acquired by the Lender to
fund or maintain the Loan to the Borrower but excluding any loss of Applicable
Margin thereon) which the Lender may sustain (i) if for any reason the Loan is
prepaid (including, without limitation, pursuant to SECTION 2.5 (Mandatory
Prepayments)) on a date which is not the last day of the applicable Interest
Period or (ii) as a consequence of any failure by the Borrower to repay the Loan
when required by the terms of this Agreement. The Lender shall deliver to the
Borrower concurrently with such demand a written statement in reasonable detail
as to such losses, expenses and liabilities, and this statement shall become
conclusive within thirty (30) days as to the amount of compensation due to the
Lender, absent manifest error. During such thirty (30)-day period, the Borrower
shall have the opportunity to request more detailed information if it reasonably
feels such information is necessary, and the Borrower shall be afforded a
reasonable opportunity to review and comment on the calculation (such review in
any case not to exceed thirty (30) days).
(e) AFFILIATES NOT OBLIGATED. No Affiliate of the Lender shall be
deemed a party to this Agreement or shall have any liability or obligation under
this Agreement.
2.9 TAXES.
(a) PAYMENT OF TAXES. Any and all payments by the Borrower hereunder or
under the Note or other document evidencing any Obligations shall be made free
and clear of and without reduction for any and all present or future taxes,
levies, imposts, deductions, charges, and all stamp or documentary taxes, excise
taxes, ad valorem taxes and other taxes imposed on the value of the property,
charges or levies which arise from the execution, delivery or registration, or
from payment or performance under, any of the Loan Documents and all other
liabilities with respect thereto excluding, any withholding taxes and taxes
imposed on or measured by net income or overall gross receipts and capital and
franchise taxes now or hereafter imposed on the Lender by (i) the United States
or any political subdivision thereof, (ii) the governmental authority of the
jurisdiction (or any political subdivision thereof) in which the Lender's
Lending Office is located or (iii) any governmental authority in the
jurisdiction in which the Lender is organized, managed and controlled or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges and withholdings being hereinafter referred to as "TAXES").
If the Borrower shall be required by law to withhold or deduct any Taxes from or
in respect of any sum payable hereunder or under the Note or such document to
the Lender, (x) the Borrower shall make such withholding or deductions and (y)
the Borrower shall pay the full amount withheld or deducted to the relevant
taxation authority or other authority in accordance with applicable law.
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
(b) INDEMNIFICATION. The Borrower will indemnify the Lender against,
and reimburse the Lender on demand for, the full amount of all Taxes (including,
without limitation, any Taxes imposed by any governmental authority on amounts
payable under this SECTION 2.9 and any additional income or franchise taxes
resulting therefrom) incurred or paid by the Lender and any liability (including
penalties, interest, and out-of-pocket expenses paid to third parties) arising
therefrom or with respect thereto, whether or not such Taxes were lawfully
payable. A certificate as to any additional amount payable to any Person under
this SECTION 2.9 submitted by it to the Borrower shall, absent manifest error,
be final, conclusive and binding upon all parties hereto. The Lender agrees,
within a reasonable time after receiving a written request from the Borrower, to
provide the Borrower with such certificates as are reasonably required, and take
such other action as are reasonably necessary to claim such exemptions as the
Lender may be entitled to claim in respect of all or a portion of any Taxes
which are otherwise required to be paid or deducted or withheld pursuant to this
SECTION 2.9 in respect of any payments under this Agreement or under the Note.
(c) RECEIPTS. Within thirty (30) days after the date of any payment of
Taxes by the Borrower, it will furnish to the Lender, at its address referred to
in SECTION 7.2 (Notices, Etc.), the original or a certified copy of a receipt or
other documentation reasonably satisfactory to the Lender, evidencing payment
thereof.
Article 3
CONDITIONS OF LENDING
3.1 CONDITION PRECEDENT TO THE LOAN. The obligation of the Lender to
make the Loan hereunder is subject to fulfillment (or waiver in writing by the
Lender) of the following conditions precedent (it being understood and agreed
that the delivery of the stock certificates in SECTION 3.1(F)(II) shall be
deemed to have occurred simultaneously with the Closing):
(a) The Closing (as defined under the Borrower Stock Purchase
Agreement) shall have occurred and the Borrower shall have acquired all of the
capital stock of QMS Europe and QMS Australia.
(b) The representations and warranties made by the Borrower in the
Borrower Stock Purchase Agreement and in ARTICLE 4 (Representations and
Warranties) shall be true and correct on and as of the date of the Loan, before
and after giving effect to the Loan and to the application of the proceeds
therefrom, as though made on and as of such date.
(c) No event shall have occurred and be continuing, or would result
from the Loan, or from the application of the proceeds therefrom, which would
constitute a Default or an
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
Event of Default in effect on, and as of the date of, the Loan.
(d) There shall not have occurred any material adverse change in the
consolidated assets, liabilities, operations, business, customer base, condition
(financial or otherwise) or prospects of the Borrower since April 30, 1999.
(e) The Foothill Credit Facility shall have been amended to authorize
(or Foothill Capital Corporation shall otherwise have consented in writing to)
the transactions contemplated in the Borrower Stock Purchase Agreement, this
Loan Agreement and the other Loan Documents.
(f) There shall have been delivered to the Lender on or before the
Closing Date the following, each in form and substance satisfactory to the
Lender:
(i) The Note duly executed by the Borrower;
(ii) The Stock Pledge Agreements duly executed by the Borrower
(together with stock certificates and stock powers, as appropriate, and, in the
case of the Australian Stock Pledge Agreement, transfers of shares in QMS
Australia duly executed in blank by the Borrower);
(iii) A true and complete copy of the Certificate of
Incorporation and By-laws of the Borrower, and certified copies of the
resolutions of the Board of Directors of the Borrower approving this Agreement,
the Stock Pledge Agreements, the Note and all other Loan Documents delivered on
the Closing Date, and of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement, the
Stock Pledge Agreements, the Note and such other Loan Documents;
(iv) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign this Agreement, the Stock Pledge Agreements and the
Note and other documents to be delivered hereunder to which it is a party;
(v) Favorable opinions of Hand ▇▇▇▇▇▇▇▇, LLC, as counsel for
the Borrower, De Brauw Blackstone Westbroek, as Dutch local counsel for the
Borrower, and Mallesons ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as Australian local counsel for the
Borrower, all in form and substance satisfactory to the Lender and its counsel;
(vi) Any document in the applicable jurisdiction necessary or
appropriate for the Lender to obtain or evidence the perfection and priority of
the Lender's first-priority security interest (or equitable interest, as the
case may be) in the Collateral; and
(vii) Such other documents and instruments (including, without
limitation, financial and other information) as the Lender shall reasonably
request.
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
Article 4
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants on and as of the date hereof and on the Closing Date as
follows:
(a) The Borrower is duly incorporated, validly existing and in good
standing under the laws of Delaware, has the corporate power and authority to
own its assets and to transact the business in which it is now engaged or
proposed to be engaged.
(b) The execution, delivery and performance by the Borrower of the Loan
Documents to which it is a party have been duly authorized by all necessary
corporate actions and do not and will not (i) contravene its charter or by-laws;
(ii) violate any provision of, or require any filing, registration, consent or
approval under, any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award having applicability to the Borrower; (iii)
result in a breach of or constitute a default or require any consent under any
material indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower or its Subsidiaries are a party or by which
they or their properties may be bound or affected (including, without
limitation, the existing facilities listed on SCHEDULE 4.1(F) and, if not repaid
in full and terminated at the Closing Date, the Foothill Credit Facility); or
(iv) cause the Borrower to be in default (with or without notice or lapse of
time or both) under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture, agreement,
lease or instrument.
(c) Each of the Loan Documents to which the Borrower is a party has
been duly executed and delivered and constitutes its legal, valid and binding
obligation enforceable against it in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Borrower of this Agreement,
the Stock Pledge Agreements, the Note or the other Loan Documents to which it is
a party.
(e) Set forth on SCHEDULE 4.1(E) is a complete and accurate list
showing, as of the date hereof, after giving effect to the share purchase
contemplated in the Subsidiaries Stock Purchase Agreement, all Subsidiaries of
the Borrower and, as to each such Subsidiary, the
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
jurisdiction of its incorporation, the number of shares of each class of capital
stock authorized, the number outstanding on the date hereof and the percentage
of the outstanding shares of each such class owned, directly or indirectly, by
the Borrower. None of the capital stock of any such Subsidiary is subject to any
outstanding option, warrant, right of conversion or purchase or any similar
right other than those of the Borrower and its Affiliates. All of the issued and
outstanding capital stock of each such Subsidiary has been validly issued, fully
paid and non-assessable and is owned by the Borrower (after giving effect to the
share purchase contemplated in the Subsidiaries Stock Purchase Agreement) free
and clear of all Liens other than Liens in favor of the Lender and its
Affiliates. Neither the Borrower nor any such Subsidiary is a party to, or has
knowledge of, any agreement restricting the transfer or hypothecation of any
shares of capital stock of any such Subsidiary, other than the Loan Documents.
The Borrower does not own or hold directly or indirectly, any capital stock or
equity security of, or any equity interest in, any Person other than such
Subsidiaries.
(f) There are no Liens of any nature whatsoever on the Collateral or
any properties of the Borrower, any of its Subsidiaries, QMS Australia or QMS
Europe other than those permitted by SECTION 5.2(A) (Negative Covenants) and, in
respect of QMS Australia and QMS Europe, those listed on SCHEDULE 4.1(F). The
Liens granted to the Lender pursuant to the Stock Pledge Agreements are fully
perfected first priority Liens in and to the Collateral.
(g) Both before and after giving effect to the Loan, the application of
the proceeds thereof in connection with SECTION 2.2 (Use of Proceeds) and the
payment of all estimated legal, accounting and other fees relating hereto and
thereto, (A) the value of the assets of the Borrower (both at fair value and at
present fair saleable value) will be greater than the total amount of its
liabilities (including, without limitation, contingent and unliquidated
liabilities), (B) the Borrower will be able to pay all of its liabilities as
they mature, (C) the Borrower's stockholders' equity shall be above twelve
million and eight hundred thousand Dollars ($12,800,000) and (D) the Borrower
will not have unreasonably small capital.
(h) All representations and warranties of the Borrower contained in the
Borrower Stock Purchase Agreement are true and correct.
(i) All representations and warranties of the Borrower contained in
this Agreement, the other Loan Documents, the Borrower Stock Purchase Agreement
and all certificates, documents and other information, including, without
limitation, financial information delivered by the Borrower to the Lender in
connection therewith, do not contain any untrue statement of material fact or
omit to state a material fact necessary in order to make the statements
contained therein not misleading.
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
Article 5
COVENANTS OF THE BORROWER
5.1 AFFIRMATIVE COVENANTS. So long as the Note shall remain unpaid
hereunder and until all the Obligations are paid in full, the Borrower shall,
unless the Lender shall otherwise consent in writing:
(a) CORPORATE MAINTENANCE. At all times maintain its corporate
existence and preserve and keep in full force and effect its rights, privileges
and franchises necessary or desirable to its business.
(b) COMPLIANCE WITH LAWS, ETC. Comply in all material respects with (i)
all applicable laws, rules, regulations and orders and (ii) all indentures, or
loan or credit agreements or any other agreement, lease or instrument to which
it is a party or by which it or its properties may be bound or affected.
(c) TAXES. Duly file all tax returns with respect to the Borrower and
its property which are required to be filed, duly pay all taxes shown thereon to
be due and payable by the Borrower, including all quarterly tax assessments.
(d) BOOKS AND RECORDS. Keep proper books of record and account in which
entries in conformity with GAAP consistently applied shall be made of all
dealings and transactions in relation to their businesses and activities.
(e) INSPECTION. Permit the Lender and its representatives at any time
to inspect the facilities, the location and condition of the Collateral and
other assets of the Borrower and the books and records thereof, to make copies
and extracts therefrom and to discuss its affairs, finances and accounts with
its officers, employees and independent auditors (and by this provision the
Borrower authorizes such independent auditors to discuss with the Lender and its
representatives such affairs, finances and accounts and to obtain all
information concerning the Borrower's business, and all financial and any other
information the Lender may require).
(f) REPORTING REQUIREMENTS. Furnish to the Lender:
(i) As soon as available, and in any event within ninety (90)
days after the Closing Date, an audited, pro forma consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as of the
Closing Date prepared in accordance with GAAP consistently applied, which
balance sheet gives effect to the transactions contemplated in the Subsidiaries
Stock Purchase Agreement, the transactions contemplated hereby, and the payment
or accrual of all fees and expenses related to the foregoing;
(ii) As soon as available, and in any event within thirty (30)
days after the end of each fiscal month, consolidated and consolidating
unaudited balance sheets of the Borrower and its subsidiaries as of the end of
such month and the related statements of income, stockholders' equity and cash
flow of the Borrower and its subsidiaries for the period commencing at the
beginning of the fiscal year and ending at the close of such fiscal month,
including comparative statements which reflect the same period(s) of the
previous fiscal year, certified by the chief financial officer of the Borrower;
(iii) As soon as available, and in any event within forty-five
(45) days after the end of each fiscal quarter, consolidated and consolidating
unaudited balance sheets of the Borrower and its subsidiaries as of the end of
such quarter and the related statements of income, stockholders' equity and cash
flow of the Borrower and its subsidiaries for the period commencing at the
beginning of the then current fiscal year and ending at the close of such
quarter, including comparative statements which reflect the same period(s) of
the previous fiscal year, certified by the chief financial officer of the
Borrower;
(iv) As soon as available and in any event within ninety (90)
days after the end of each fiscal year of the Borrower, a copy of the annual
report for such year for the Borrower containing financial statements for such
year and consolidated and consolidating balance sheets for the twelve month
period then ended, statements of income, stockholders' equity, cash flow and
changes in stockholders' equity of the Borrower for such fiscal year, together
with comparative information for the previous fiscal year, and copies of all
reports and management letters from independent certified public accountants to
the Borrower reasonably acceptable to the Lender, all certified by the chief
financial officer of the Borrower;
(v) As soon as possible and in any event within five (5) days
after the occurrence of each Default and Event of Default, continuing on the
date of such statement, a statement of the chief financial officer of the
Borrower setting forth details of such Default or Event of Default and the
action which the Borrower has taken and proposes to take with respect thereto;
(vi) Promptly upon the filing thereof or the mailing thereof
to the public shareholders or debt-holders of the Borrower generally, the
Borrower shall deliver to the Lender copies of all filings or reports made with
the U.S. Securities and Exchange Commission (or the governmental or
quasi-governmental entity or entities receiving substantially equivalent filings
in any relevant jurisdiction) by the Borrower or any of its subsidiaries and all
communications made by the Borrower to its shareholders generally; and
(vii) Such other information respecting the condition or
operations, financial or otherwise, of the Borrower as the Lender may from time
to time reasonably request.
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
(g) FURTHER ASSURANCES. Execute and deliver from time to time to the
Lender all such further documents and instruments and do all such other acts and
things as may be reasonably required by the Lender to enable the Lender to
exercise and enforce its rights hereunder and under the other documents referred
to herein and to perfect, continue the perfection of, preserve and protect its
lien on the Collateral.
(h) FOOTHILL CREDIT FACILITY. On or before the sixtieth (60th) day
following the Closing Date, the Foothill Credit Facility and all Liens granted
thereunder shall have been terminated in form and substance satisfactory to the
Lender or the Foothill Credit Facility shall have become a Permitted Credit
Facility and shall remain a Permitted Credit Facility.
5.2 NEGATIVE COVENANTS. So long as the Note shall remain unpaid
hereunder and until all the Obligations are paid in full, the Borrower will not
without the written consent of the Lender:
(a) Create or suffer to exist, any Lien upon or with respect to any of
its properties, whether now owned or hereafter acquired, or assign any right to
receive income, in each case to secure or provide for the payment of any Debt of
any person or entity, other than (i) purchase money liens or purchase money
security interests upon or in any personal property acquired or held by the
Borrower in the ordinary course of business to secure the purchase price of such
personal property or to secure Debt incurred solely for the purpose of financing
the acquisition of such personal property, (ii) Liens existing on such
properties at the time of its acquisition (other than any such Lien created in
contemplation of such acquisition), (iii) Customary Permitted Liens and (iv)
Liens in favor of the Lender or created to secure the obligations under the
Permitted Credit Facilities; PROVIDED, HOWEVER, that the aggregate principal
amount at any time outstanding of the Debt secured by the Liens referred to in
clauses (i) and (ii) above shall not exceed one million Dollars ($1,000,000);
PROVIDED, FURTHER, that the aggregate principal amount of all obligations owing
to ING Bank Corporate Investments B.V. (or its affiliates) under the ING credit
facilities listed in CLAUSE (I) of SCHEDULE 4.1(F) shall not exceed four million
Dollars ($4,000,000).
(b) Merge or consolidate with or into, or convey, transfer, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its assets (whether now owned or hereafter acquired)
to, acquire all or substantially all of the assets of, any Person or division of
any Person or materially change the nature or conduct of its business as
conducted on the date hereof.
(c) Sell, assign, pledge, grant any Lien on, transfer, dispose or
otherwise encumber the Collateral or any part thereof.
(d) Directly or indirectly create, incur, assume or otherwise become or
remain directly
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
or indirectly liable with respect to any Debt, except for such debts,
obligations and liabilities outstanding as of the date hereof and identified as
such on SCHEDULE 4.1(F) (other than any such liabilities under the Foothill
Credit Facility) and liabilities in respect of the Permitted Credit Facilities.
(e) Declare, pay or make any dividend or distribution on any shares of
capital stock of the Borrower or purchase, repurchase, redeem or otherwise
acquire for value any shares of any capital stock of the Borrower.
(f) Issue any new shares of capital stock or any other voting
securities.
(g) Default in the repayment of any material debt or performance of any
material obligation of the Borrower or any of its Subsidiaries.
(h) Except as expressly contemplated hereby, engage in any transaction
with an Affiliate (other than transactions involving only the Borrower, the
Lender and/or wholly owned subsidiaries thereof) on terms more favorable to such
Affiliate than would have been obtainable in an arm's-length dealing.
(i) Amend, modify or otherwise change any of the terms or provisions in
its articles/certificate of incorporation, its by-laws, any document setting
forth the designation, amount, relative rights, limitations and preferences of
any class or series of capital stock of the Borrower, and in each case, any
equivalent documents as in effect on the Closing Date.
(j) Change its accounting treatment and reporting practices or tax
reporting treatment, except as required by GAAP consistently applied or law and
disclosed to the Lender; PROVIDED, HOWEVER, that the Borrower may from time to
time, with the prior written consent of the Lender , change its accounting
treatment and reporting practices if it reasonably believes such change would be
appropriate to implement proposed changes in GAAP.
(k) Become an Affiliate of any Person other than the Lender.
(l) Enter into any agreement that would not permit the Borrower to (i)
comply fully with all of the provisions of this ARTICLE 5 or (ii) grant to the
Lender a perfected first-priority exclusive Lien on the Collateral.
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
Article 6
EVENTS OF DEFAULT
6.1 EVENTS OF DEFAULT. If any of the following Events of Default shall
occur and be continuing:
(a) The Borrower shall fail to pay any principal of the Note when the
same becomes due and payable and such non-payment continues for a period of more
than five (5) days; or
(b) The Borrower shall fail to pay any interest on the Note or any
other amount payable hereunder or under any of the other Loan Documents to which
it is a party when the same becomes due and payable and such non-payment
continues for a period of more than five (5) days; or
(c) Any representation or warranty made by the Borrower herein or in
the other Loan Documents to which it is a party or in any certificate agreement
or statement contemplated by or made and delivered to the Lender in connection
with this Agreement shall prove to have been incorrect in any material respect
when made; or
(d) The Borrower shall (i) fail to perform or observe any term,
covenant or agreement binding on such Person under SECTION 5.1(A) (Corporate
Maintenance) or SECTION 5.1(E) (Inspection), or SECTION 5.2 (Negative Covenants)
or (ii) default in the performance or compliance with any term contained in this
Agreement (other than as covered by paragraphs (a), (b) or (c) or clause (i) of
this paragraph (d) of this Section 6.1) or any default or event of default shall
occur under any of the other Loan Documents and such default or event of default
continues for a period of more than thirty (30) days after the occurrence
thereof; or
(e) The Borrower shall fail to pay any principal of or premium or
interest on any Debt (but excluding Debt evidenced by the Note) of the Borrower
that has an aggregate principal amount in excess of one million Dollar
($1,000,000), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt; or any such Debt shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment),
redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the stated
maturity thereof; or
(f) The Borrower shall generally not pay its debts as such debts become
due, or shall admit in writing their inability to pay its debts generally, or
shall make a general
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against the Borrower seeking to adjudicate it bankrupt or insolvent, or
seeking the liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of the Borrower or of its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for either of them or for any
substantial part of their property and, in the case of any such proceeding
instituted against either of them (but not instituted by either of them), either
such proceeding shall remain undismissed or unstayed for a period of 45 days, or
any of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, either of them or for any substantial
part of their property) shall occur; or the Borrower shall take any corporate
action to authorize any of the actions set forth above in this subsection (f);
or
(g) Any judgment or order for the payment of money in excess of five
hundred thousand Dollars ($500,000) shall be rendered against the Borrower and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of ten consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(h) Any default under, or Event of Default as defined in, any of the
Permitted Credit Facilities) shall have occurred and be continuing which has not
been waived in accordance with the terms of the Permitted Credit Facilities; or
(i) This Agreement, the Note or the Stock Pledge Agreements shall, at
any time after their respective execution and delivery and for any reason, cease
to be in full force and effect or shall be declared null and void and not
replaced by substantially similar instruments in form and substance reasonably
satisfactory to the Lender, or the validity or enforceability thereof or the
security interests (or equitable interests, as the case may be) granted
thereunder shall be contested by the Borrower, or the Borrower shall deny that
such person has any further liability or obligation under this Agreement, the
Note or the Stock Pledge Agreements, as the case may be;
then, and in any such event, the Lender may, by notice to the Borrower, declare
the Note, all interest thereon and all of the Obligations to be forthwith due
and payable, whereupon the Note, all such interest and all of the Obligations
shall become and be forthwith due and payable, without presentment, demand,
protest, or further notice of any kind, all of which are hereby expressly waived
by the Borrower; PROVIDED, HOWEVER, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the Federal
Bankruptcy Code, the Loan, the Note, all such interest and all the Obligations
shall automatically become and be due and payable, without presentment, demand,
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower. Notwithstanding any other rights the Lender may have under
applicable law and hereunder, the Borrower agrees that upon the occurrence and
during the continuance of an Event of Default, the Lender shall have the right
to apply (including by way of set-off) any of the property of the Borrower held
by the Lender or thereafter coming into the Lender's possession (including
account balances of the Borrower) to a reduction of the Obligations of the
Borrower.
Article 7
MISCELLANEOUS
7.1 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or the Note, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
7.2 NOTICES, ETC. All notices and other communications provided for
hereunder shall be in writing (including telecopier, telegraphic, telex or cable
communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to the Borrower, at its address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Chief Executive Officer, Fax: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to
Hand ▇▇▇▇▇▇▇▇, LLC, First ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Fax: (▇▇▇) ▇▇▇-▇▇▇▇; and if to the Lender, at
its address at 3-13, 2-Chome, ▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇,
Attention: General Manager of Finance Division, Fax: ▇▇▇-▇▇-▇-▇▇▇▇-▇▇▇▇, with a
copy to Weil, Gotshal & ▇▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Fax:
(▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.; or, as to each party, at such
other address as shall be designated by such party in a written notice to the
other party. All such notices and communications shall, when mailed, telecopied,
telegraphed, telexed or cabled, be effective when deposited in the mails,
telecopied, delivered to the telegraph company, confirmed by telex answerback or
redelivered to the cable company, respectively, except that notices to the
Lender pursuant to the provisions of ARTICLE 2 (Amount and Term of the Loan)
shall not be effective until received by the Lender.
7.3 NO WAIVER; REMEDIES. No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder or under the Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
7.4 COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
reasonable costs and expenses in connection with the preparation, execution,
delivery, administration, modification and amendment of this Agreement, the
Note, the Stock Pledge Agreements and the other Loan Documents, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Lender with respect thereto and with respect to advising the Lender as
to its rights and responsibilities under this Agreement. The Borrower further
agrees to pay after an Event of Default on demand all costs and expenses, if any
(including reasonable counsel fees and expenses), (i) in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise) of
this Agreement, the Note, the Stock Pledge Agreements and the other Loan
Documents, including, without limitation, reasonable counsel fees and expenses
in connection with the enforcement of rights under this SECTION 7.4; (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work out" or in any insolvency
or bankruptcy proceeding; and (iii) in commencing, defending or intervening in
any litigation or in filing a petition, complaint, motion or other pleadings in
any legal proceeding relating to the Obligations, the Collateral, the Borrower
and related to or arising out of the transactions contemplated hereby or by any
of the other Loan Documents. In addition, the Borrower shall pay any and all
stamp and other taxes (other than those taxes excluded pursuant to SECTION 2.9
(Taxes)) payable or determined to be payable in connection with the execution
and delivery of this Agreement, the Note, the Stock Pledge Agreements and the
other Loan Documents to be delivered hereunder, and agrees to save the Lender
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.
7.5 RIGHT OF SET-OFF. Upon the occurrence and during the continuance of
an Event of Default, the Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any Debt
at any time owing by the Lender to or for the credit or the account of the
Borrower against any and all of the Obligations of the Borrower now or hereafter
existing, whether or not the Lender shall have made any demand under this
Agreement, the Note or any other Loan Document and although such Obligations may
be unmatured. The Lender agrees promptly to notify the Borrower after any such
set-off and application, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Lender
under this SECTION 7.5 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Lender may have.
7.6 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Lender and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lender. The Lender may assign all or a portion of its rights and
obligations under this Agreement upon notice to the Borrower.
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Minolta Co., Ltd.
QMS, Inc.
7.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. One or more
counterparts of this Agreement (or portions hereof) may be delivered via
telecopier, with the intention that they shall have the same effect as an
original counterpart hereof (or such portions hereof). All signature pages need
not be on the same counterpart.
7.8 ENTIRE AGREEMENT; SEVERABILITY OF PROVISIONS. The Loan Documents
contain the entire agreement of the parties hereto and supersede all prior
agreements and understandings, oral and otherwise, among the parties hereto with
respect to the matters contained in the Loan Documents. If any provision of this
Agreement or the application thereof to any Person or circumstance is invalid or
unenforceable, or contravenes any law, regulation or document applicable to such
Person, such provision or application shall be deemed ineffective ab initio, but
the remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected thereby, and the provisions of
this Agreement shall be severable in any such instances.
7.9 INDEMNIFICATION. The Borrower agrees to indemnify the Lender and
its Affiliates and each of their respective stockholders, directors, officers,
agents, attorneys and employees, and the successors and assigns of the foregoing
(collectively, "INDEMNITEES"), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against any Indemnitee in any way relating to or
arising out of the Loan Documents or any related transactions (whether actual or
proposed), or any action taken or omitted by the Lender under the Loan
Documents; PROVIDED, HOWEVER, that the Borrower shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of such Indemnitee as determined in a final,
non-appealable judgment by a court of competent jurisdiction. The foregoing
agreements shall survive the making and repayment of the Loan.
7.10 GOVERNING LAW. This Agreement and the Note shall be governed by,
and construed in accordance with, the laws of the State of New York applicable
to agreements entered into and to be executed entirely within the State of New
York.
7.11 CONSENT TO JURISDICTION. The Borrower represents that it has no
immunity with respect to any action or proceeding brought in connection with
this Agreement or the other Loan Documents, and agrees that any legal or
equitable action or proceeding with respect to this Agreement, the Note or the
other Loan Documents to which it is a party or the enforcement thereof may be
brought in any Federal or State court of competent jurisdiction located in the
City of New York and, by execution and delivery of this
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Minolta Co., Ltd.
QMS, Inc.
Agreement, it accepts for itself and its property, generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts and any
related appellate court, irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement or the other Loan Documents, and
irrevocably waives any objection it may now or hereafter have as to the venue of
any such action or proceeding brought in such a court or that such court is an
inconvenient forum. The Borrower consents to the service of process out of any
of the aforementioned courts in any such action or proceeding by mailing of
copies thereof by registered mail, postage prepaid, such service to become
effective seven (7) Business Days after such mailing. Nothing herein shall
affect the Lender's right to serve process in any other manner prescribed by law
or the right to bring legal or equitable actions or proceedings in other
competent jurisdictions. Any judicial proceeding by the Borrower against the
Lender involving, directly or indirectly, any matter in any way arising out of,
related to or connected with this Agreement, the Note or the other Loan
Documents shall be brought only in a court located in the City of New York. EACH
OF BORROWER AND THE LENDER HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING BROUGHT BY THE BORROWER OR THE LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY.
Loan Agreement
Minolta Co., Ltd.
QMS, Inc.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
QMS, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and President
MINOLTA CO., LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director