Credit Agreement

Exhibit 10.1
------------


CREDIT AGREEMENT


Dated as of August 17, 2005


among


ACCO BRANDS CORPORATION,
ACCO BRANDS EUROPE LTD.,
FURLON HOLDING B.V.
(to be renamed ACCO NEDERLAND HOLDINGS B.V.)
as Borrowers


and


THE LENDERS and ISSUERS PARTY HERETO


and


CITICORP NORTH AMERICA, INC.
as Administrative Agent


and


ABN AMRO BANK, N.V.
as Syndication Agent


and


GOLDMAN SACHS CREDIT PARTNERS L.P.,


GENERAL ELECTRIC CAPITAL CORPORATION


and


HARRIS N.A.
as Co-Documentation Agents


and


CITIGROUP GLOBAL MARKETS, INC.


and


ABN AMRO INCORPORATED
as Joint Lead Arrangers and Joint Book-Running Managers


CAHILL GORDON & REINDEL LLP
80 PINE STREET
NEW YORK, NEW YORK 10005


TABLE OF CONTENTS


Page
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ARTICLE I


DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS


Section 1.1 Defined Terms................................................................................1 Section 1.2 Computation of Time Periods.................................................................42 Section 1.3 Accounting Terms and Principles.............................................................42 Section 1.4 Conversion of Currencies....................................................................43 Section 1.5 Certain Terms...............................................................................43


ARTICLE II


THE FACILITIES


Section 2.1 The Commitments.............................................................................44 Section 2.2 Borrowing Procedures........................................................................45 Section 2.3 Swing Loans.................................................................................47 Section 2.4 Letters of Credit...........................................................................49 Section 2.5 Reduction and Termination of the Commitments................................................54 Section 2.6 Repayment of Loans..........................................................................55 Section 2.7 Promissory Notes............................................................................57 Section 2.8 Optional Prepayments........................................................................58 Section 2.9 Mandatory Prepayments.......................................................................59 Section 2.10 Interest....................................................................................60 Section 2.11 Conversion/Continuation Option..............................................................61 Section 2.12 Fees........................................................................................62 Section 2.13 Payments and Computations...................................................................63 Section 2.14 Special Provisions Governing Eurocurrency Rate Loans........................................65 Section 2.15 Increased Costs.............................................................................67 Section 2.16 Capital Adequacy............................................................................68 Section 2.17 Taxes.......................................................................................68 Section 2.18 Substitution of Lenders; Change of Lending Office...........................................71 Section 2.19 Increase in Commitments.....................................................................72


ARTICLE III


CONDITIONS TO LOANS AND LETTERS OF CREDIT


Section 3.1 Conditions Precedent to Initial Loans.......................................................74 Section 3.2 Conditions Precedent to Each Loan and Letter of Credit......................................78 Section 3.3 Determinations of Initial Borrowing Conditions..............................................79


ARTICLE IV


REPRESENTATIONS AND WARRANTIES


Section 4.1 Corporate Existence; Compliance with Law....................................................80 Section 4.2 Corporate Power; Authorization; Enforceable Obligations.....................................81 Section 4.3 Ownership of Subsidiaries...................................................................82 Section 4.4 Financial Statements........................................................................82 Section 4.5 Material Adverse Effect.....................................................................83 Section 4.6 Solvency....................................................................................83 Section 4.7 Litigation..................................................................................83 Section 4.8 Taxes.......................................................................................83 Section 4.9 Full Disclosure.............................................................................83 Section 4.10 Margin Regulations..........................................................................84 Section 4.11 No Burdensome Restrictions..................................................................84 Section 4.12 Investment Company Act; Public Utility Holding Company Act..................................84 Section 4.13 Use of Proceeds.............................................................................84 Section 4.14 Insurance...................................................................................85 Section 4.15 Labor Matters...............................................................................85 Section 4.16 ERISA.......................................................................................85 Section 4.17 Environmental Matters.......................................................................85 Section 4.18 Intellectual Property.......................................................................87 Section 4.19 Title; Real Property........................................................................87 Section 4.20 Collateral Documents........................................................................87 Section 4.21 U.K. Pensions...............................................................................89 Section 4.22 Dutch Banking Act...........................................................................89


ARTICLE V


FINANCIAL COVENANTS


Section 5.1 Maximum Leverage Ratio......................................................................89 Section 5.2 Minimum Interest Coverage Ratio.............................................................90 Section 5.3 Maximum Capital Expenditures................................................................91


ARTICLE VI


REPORTING COVENANTS


Section 6.1 Financial Statements........................................................................92 Section 6.2 Default Notices.............................................................................93 Section 6.3 Litigation..................................................................................93 Section 6.4 Asset Sales.................................................................................94 Section 6.5 SEC Filings.................................................................................94 Section 6.6 Labor Relations.............................................................................94 Section 6.7 Insurance...................................................................................94 Section 6.8 ERISA Matters...............................................................................94 Section 6.9 Environmental Matters.......................................................................95 Section 6.10 UK Pension Matters..........................................................................96 Section 6.11 Know Your Customer Regulations..............................................................96 Section 6.12 Other Information...........................................................................97


ARTICLE VII


AFFIRMATIVE COVENANTS


Section 7.1 Preservation of Corporate Existence, Etc....................................................97 Section 7.2 Compliance with Laws, Etc...................................................................97 Section 7.3 Payment of Taxes, Etc.......................................................................97 Section 7.4 Maintenance of Insurance....................................................................97 Section 7.5 Access......................................................................................98 Section 7.6 Keeping of Books............................................................................98 Section 7.7 Maintenance of Properties, Etc .............................................................98 Section 7.8 Application of Proceeds.....................................................................99 Section 7.9 Environmental...............................................................................99 Section 7.10 Additional Collateral and Guaranties........................................................99 Section 7.11 Post-Closing Covenants.....................................................................101 Section 7.12 UK Pension Matters.........................................................................101 Section 7.13 Ratings....................................................................................102 Section 7.14 Dutch Banking Act..........................................................................102


ARTICLE VIII


NEGATIVE COVENANTS


Section 8.1 Indebtedness...............................................................................103 Section 8.2 Liens, Etc.................................................................................105 Section 8.3 Investments................................................................................106 Section 8.4 Sale of Assets.............................................................................108 Section 8.5 Restricted Payments........................................................................109 Section 8.6 Prepayment of Subordinated Debt............................................................111 Section 8.7 Restriction on Fundamental Changes.........................................................111 Section 8.8 Change in Nature of Business...............................................................111 Section 8.9 Transactions with Affiliates...............................................................111 Section 8.10 Limitations on Restrictions on Subsidiary Distributions; No New Negative Pledge............112 Section 8.11 Modification of Constituent Documents......................................................113 Section 8.12 Modification of Acquisition Documents......................................................113 Section 8.13 Modification of Debt Agreements............................................................114 Section 8.14 Accounting Changes; Fiscal Year............................................................114 Section 8.15 Margin Regulations.........................................................................114 Section 8.16 No Speculative Transactions................................................................114 Section 8.17 Designated Senior Debt.....................................................................114


ARTICLE IX


EVENTS OF DEFAULT


Section 9.1 Events of Default..........................................................................114 Section 9.2 Remedies...................................................................................117 Section 9.3 Actions in Respect of Letters of Credit....................................................117 Section 9.4 Rescission.................................................................................117 Section 9.5 Collection Allocation Mechanism............................................................118


ARTICLE X


THE ADMINISTRATIVE AGENT; THE AGENTS


Section 10.1 Authorization and Action...................................................................118 Section 10.2 Administrative Agent's Reliance, Etc.......................................................119 Section 10.3 Posting of Approved Electronic Communications..............................................120 Section 10.4 The Agents as Lenders......................................................................121 Section 10.5 Lender Credit Decision.....................................................................121 Section 10.6 Indemnification............................................................................121 Section 10.7 Successor Administrative Agent.............................................................122 Section 10.8 Concerning the Collateral and the Collateral Documents.....................................122 Section 10.9 Collateral Matters Relating to Related Obligations.........................................124 Section 10.10 Representation by Euro Term Lenders........................................................124 Section 10.11 German Security............................................................................124 Section 10.12 Parallel Debt (Covenant to pay the Administrative Agent)...................................125 Section 10.13 French Law Parallel Debt (Covenant to pay the Administrative Agent)........................125


ARTICLE XI


MISCELLANEOUS


Section 11.1 Amendments, Waivers, Etc...................................................................126 Section 11.2 Assignments and Participations.............................................................129 Section 11.3 Costs and Expenses.........................................................................131 Section 11.4 Indemnities................................................................................132 Section 11.5 Limitation of Liability....................................................................133 Section 11.6 Right of Set-off...........................................................................134 Section 11.7 Sharing of Payments, Etc...................................................................134 Section 11.8 Notices, Etc...............................................................................135 Section 11.9 No Waiver; Remedies........................................................................137 Section 11.10 Binding Effect.............................................................................137 Section 11.11 Governing Law..............................................................................137 Section 11.12 Submission to Jurisdiction; Service of Process.............................................137 Section 11.13 Waiver of Jury Trial.......................................................................138 Section 11.14 Marshaling; Payments Set Aside.............................................................139 Section 11.15 Section Titles.............................................................................139 Section 11.16 Execution in Counterparts..................................................................139 Section 11.17 Entire Agreement...........................................................................139 Section 11.18 Confidentiality............................................................................139 Section 11.19 Patriot Act................................................................................140


Schedules


Schedule I - Commitments Schedule II - Applicable Lending Offices and Addresses for Notices Schedule III - Initial Domestic Guarantors Schedule IV - Initial Foreign Guarantors Schedule V - Foreign Mortgaged Properties Schedule VI - Mandatory Costs Schedule VII - Specified Restructuring Transactions Schedule VIII - Existing Letters of Credit Schedule 3.1-1 - Foreign Collateral Documents: Secured Obligations Schedule 3.1(v) - Title Insurance Amounts Schedule 4.2 - Consents Schedule 4.3 - Ownership of Subsidiaries Schedule 4.19 - Real Property Schedule 7.11 - Post-Closing Documents Schedule 8.1 - Existing Indebtedness Schedule 8.2 - Existing Liens Schedule 8.3 - Existing Investments Exhibits


Exhibit A - Form of Assignment and Acceptance Exhibit B-1 - Form of Revolving Credit Note Exhibit B-2 - Form of Term Note Exhibit B-3 - Form of Swing Loan Note Exhibit C - Form of Notice of Borrowing Exhibit D - Form of Swing Loan Request Exhibit E - Form of Letter of Credit Request Exhibit F - Form of Notice of Conversion or Continuation Exhibit G - Form of Opinion of Counsel for the Domestic Loan Parties Exhibit H-1 - Form of Domestic Guaranty Exhibit H-2 - Form of U.K./Dutch Guaranty Exhibit H-3 - Form of Australian Guaranty Exhibit I - Form of Domestic Security Agreement Exhibit J - Form of Mortgage Exhibit K - Form of Exemption Certificate Exhibit L - Omitted Exhibit M - Form of Trust Agreement


CREDIT AGREEMENT, dated as of August 17, 2005, among ACCO BRANDS CORPORATION, a Delaware corporation (the "Company" or the "U.S. Borrower"), FURLON HOLDINGS B.V. (to be renamed ACCO NEDERLAND HOLDINGS B.V.), a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of The Netherlands (the "Dutch Borrower"), ACCO BRANDS EUROPE LTD., a limited company organized under the laws of England and Wales with registered number 5532999 (the "U.K. Borrower") and, together with the U.S. Borrower and the Dutch Borrower, the "Borrowers"), the Lenders (as defined below), the Issuers (as defined below) and CITICORP NORTH AMERICA, INC. ("Citicorp"), as administrative agent, collateral agent and trustee for the Lenders and the Issuers (in such capacities, the "Administrative Agent").


W I T N E S S E T H


WHEREAS, the Borrowers have requested that the Lenders and Issuers make available, for the purposes specified in this Agreement, credit facilities consisting of term loans, revolving credit advances and letters of credit; and


WHEREAS, the Lenders and Issuers are willing to make available to the Borrowers such credit facilities 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, INTERPRETATION AND ACCOUNTING TERMS


Section 1.1 Defined Terms


As used in this Agreement, the following terms have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):


"Acquired Dutch Guarantor" means GBC Nederland B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of The Netherlands.


"Acquisition Agreement" means the Agreement and Plan of Merger, dated as of March 15, 2005, by and among GBC, the Company, Acquisition Sub and the Seller.


"Acquisition Documents" means the Acquisition Agreement, together with the schedules thereto and the other Transaction Agreements (as defined in the Acquisition Agreement).


"Acquisition Sub" means Gemini Acquisition Sub, Inc., a Delaware corporate subsidiary of the Company.


"Administrative Agent" has the meaning specified in the preamble to this Agreement.


"Affected Lender" has the meaning specified in Section 2.18(a) (Substitution of Lenders; Change of Lending Office).


"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling or that is controlled by or is under common control with such Person and each Person that is the beneficial owner of 20% 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 the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.


"Agent Affiliate" has the meaning specified in Section 10.3(c) (Posting of Approved Electronic Communications).


"Agents" means the Administrative Agent, the Arrangers, the Documentation Agents and the Syndication Agent.


"Agreement" means this Credit Agreement.


"Agreement Currency" has the meaning specified in Section 11.12(d) (Submission to Jurisdiction; Service of Process).


"Alternative Currency" means any lawful currency other than Dollars that is freely transferable into Dollars.


"Applicable Lending Office" means, with respect to each Lender, (a) its U.S. Lending Office in the case of a Loan to the U.S. Borrower, (b) its U.K. Lending Office in the case of a Loan to the U.K. Borrower, and (c) its Dutch Lending Office in the case of a Loan to the Dutch Borrower.


"Applicable Margin" means:


(a) For U.S. Term Loans, with respect to (A) Base Rate Loans, a rate equal to 0.75% per annum and (B) Eurocurrency Rate Loans, a rate equal to 1.75% per annum; provided, that at any time following delivery to the Administrative Agent of the Financial Statements for the Fiscal Quarter ending on March 31, 2006 required to be delivered pursuant to Section 6.1(a) (Financial Statements), if the then applicable Leverage Ratio (determined on the last day of the most recent Fiscal Quarter for which Financial Statements have been delivered pursuant to Section 6.1(a) or (b) (Financial Statements)) is less than 3.50 to 1, then the Applicable Margin with respect to (A) Base Rate Loans, shall be equal to 0.50% and (B) with respect to Eurocurrency Rate Loans, shall be equal to 1.50%. Changes in the Applicable Margin resulting from a change in the Leverage Ratio on the last day of any subsequent Fiscal Quarter shall become effective as to all U.S. Term Loans upon delivery by the Company to the Administrative Agent of new Financial Statements pursuant to Section 6.1(a) or (b) (Financial Statements), as applicable. Notwithstanding anything to the contrary set forth in this Agreement (including the then effective Leverage Ratio), (i) if the Company shall fail to deliver such Financial Statements within any of the time periods specified in Section 6.1(a) or (b) (Financial Statements), the Applicable Margin from and including the first day following the date by which such Financial Statements were required to be delivered, to but not including the date the Company delivers to the Administrative Agent such Financial Statements shall equal the greatest possible Applicable Margin provided for by this definition and (ii) for so long as an Event of Default under clause (a), (b) or (f) of Section 9.1 (Events of Default) shall have occurred and is continuing then, at the option of the Requisite Class Lenders under the U.S. Term Loan Facility, the Applicable Margin shall equal the greatest possible Applicable Margin provided for by this clause (a); and


(b) For all Loans other than U.S. Term Loans:


(i) prior to the date on which the Administrative
Agent is in receipt of Financial Statements for the Fiscal
Quarter ending on March 31, 2006 required to be delivered
pursuant to Section 6.1(a) (Financial Statements), with
respect to (A) Swing Loans and Revolving Loans that are Base
Rate Loans, a rate equal to 1.00% per annum and (B) Sterling
Term Loans, Euro Term Loans and Revolving Loans that are
Eurocurrency Rate Loans, a rate equal to 2.00% per annum; and


(ii) following delivery of the financial statements
referred to in clause (i) above, a per annum rate equal to
the rate set forth below opposite the then applicable
Leverage Ratio (determined on the last day of the most recent
Fiscal Quarter for which Financial Statements have been
delivered pursuant to Section 6.1(a) or (b) (Financial
Statements)) set forth below:


----------------------------------------------------------- -------------- -----------------------
Base Rate Eurocurrency Rate
Leverage Ratio Loans Loans
----------------------------------------------------------- -------------- -----------------------
Greater than or equal to 4.25 to 1 1.00% 2.00%
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