EXHIBIT 10.6
EXECUTION COPY
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TWCC ACQUISITION CORP.
(to be merged with and into The Xxxxxxx Xxxxxx Company)
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CREDIT AGREEMENT
dated as of October 30, 1996
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$100,000,000
Credit Facility
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CHASE SECURITIES INC.,
as Advisor and as Arranger,
BT SECURITIES CORPORATION,
as Arranger,
BANKERS TRUST COMPANY,
as Syndication Agent,
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Documentation Agent,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.................................................... 1
1.1 Defined Terms............................................... 1
1.2 Other Definitional Provisions............................... 22
SECTION 2. TERM LOANS.................................................. 23
2.1 Term Loans.................................................. 23
2.2 Repayment of Term Loans..................................... 23
2.3 Use of Proceeds............................................. 23
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT
COMMITMENTS................................................. 23
3.1 Revolving Credit Commitments................................ 23
3.2 Commitment Fee.............................................. 24
3.3 Proceeds of Revolving Credit Loans.......................... 24
3.4 Swing Line Commitment....................................... 24
3.5 Issuance of Letters of Credit............................... 26
3.6 Participating Interests..................................... 26
3.7 Procedure for Opening Letters of Credit..................... 26
3.8 Payments in Respect of Letters of Credit.................... 27
3.9 Letter of Credit Fees....................................... 27
3.10 Letter of Credit Reserves................................... 28
3.11 Further Assurances.......................................... 29
3.12 Obligations Absolute........................................ 29
3.13 Assignments................................................. 30
3.14 Participations.............................................. 30
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS...................... 30
4.1 Procedure for Borrowing..................................... 30
4.2 Conversion and Continuation Options......................... 31
4.3 Changes of Commitment Amounts............................... 32
4.4 Optional and Mandatory Prepayments; Repayments of Term
Loans....................................................... 33
4.5 Interest Rates and Payment Dates............................ 36
4.6 Computation of Interest and Fees............................ 36
4.7 Certain Fees................................................ 37
4.8 Inability to Determine Interest Rate........................ 37
4.9 Pro Rata Treatment and Payments............................. 37
4.10 Illegality.................................................. 40
4.11 Requirements of Law......................................... 40
4.12 Indemnity................................................... 43
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4.13 Repayment of Loans; Evidence of Debt........................ 44
4.14 Replacement of Lenders...................................... 45
SECTION 5. REPRESENTATIONS AND WARRANTIES.............................. 45
5.1 Financial Condition......................................... 45
5.2 No Change................................................... 46
5.3 Corporate Existence; Compliance with Law.................... 47
5.4 Corporate Power; Authorization.............................. 47
5.5 Enforceable Obligations..................................... 48
5.6 No Legal Bar................................................ 48
5.7 No Material Litigation...................................... 49
5.8 Investment Company Act...................................... 49
5.9 Federal Regulation.......................................... 49
5.10 No Default.................................................. 49
5.11 Taxes....................................................... 49
5.12 Subsidiaries................................................ 50
5.13 Ownership of Property; Liens................................ 50
5.14 ERISA....................................................... 50
5.15 Collateral Documents........................................ 51
5.16 Copyrights, Patents, Permits, Trademarks and Licenses....... 52
5.17 Environmental Matters....................................... 52
5.18 Accuracy and Completeness of Information.................... 53
SECTION 6. CONDITIONS PRECEDENT........................................ 53
6.1 Conditions to Initial Loans and Letters of Credit........... 53
6.2 Conditions to All Loans and Letters of Credit............... 58
SECTION 7. AFFIRMATIVE COVENANTS....................................... 59
7.1 Financial Statements........................................ 59
7.2 Certificates; Other Information............................. 60
7.3 Payment of Obligations...................................... 62
7.4 Conduct of Business and Maintenance of Existence............ 62
7.5 Maintenance of Property; Insurance.......................... 62
7.6 Inspection of Property; Books and Records; Discussions...... 63
7.7 Notices..................................................... 63
7.8 Environmental Laws.......................................... 64
7.9 Additional Collateral....................................... 65
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SECTION 8. NEGATIVE COVENANTS.......................................... 67
8.1 Indebtedness................................................ 67
8.2 Limitation on Liens......................................... 70
8.3 Limitation on Contingent Obligations........................ 71
8.4 Prohibition of Fundamental Changes.......................... 72
8.5 Prohibition on Sale of Assets............................... 72
8.6 Limitation on Investments, Loans and Advances............... 73
8.7 Capital Expenditures........................................ 75
8.8 Consolidated EBITDA......................................... 75
8.9 Debt to EBITDA.............................................. 76
8.10 Interest Coverage........................................... 77
8.11 Limitation on Dividends..................................... 78
8.12 Transactions with Affiliates................................ 80
8.13 Prepayments and Amendments of Subordinated Debt and Equity.. 80
8.14 Limitation on Changes in Fiscal Year........................ 81
8.15 Limitation on Lines of Business............................. 81
SECTION 9. EVENTS OF DEFAULT........................................... 81
SECTION 10. THE ADMINISTRATIVE AGENT; THE ISSUING LENDER................ 84
10.1 Appointment................................................. 84
10.2 Delegation of Duties........................................ 85
10.3 Exculpatory Provisions...................................... 85
10.4 Reliance by Administrative Agent............................ 85
10.5 Notice of Default........................................... 86
10.6 Non-Reliance on Administrative Agent and Other Lenders...... 86
10.7 Indemnification............................................. 87
10.8 The Administrative Agent in its Individual Capacity......... 87
10.9 Successor Administrative Agent.............................. 87
10.10 Issuing Lender as Issuer of Letters of Credit............... 88
SECTION 11. MISCELLANEOUS............................................... 88
11.1 Amendments and Waivers...................................... 88
11.2 Notices..................................................... 90
11.3 No Waiver; Cumulative Remedies.............................. 91
11.4 Survival of Representations and Warranties.................. 91
11.5 Payment of Expenses and Taxes............................... 91
11.6 Successors and Assigns; Participations and Assignments...... 92
11.7 Adjustments; Set-off........................................ 96
11.8 Counterparts................................................ 97
11.9 Governing Law; No Third Party Rights........................ 97
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11.10 Submission to Jurisdiction; Waivers......................... 98
11.11 Releases.................................................... 98
11.12 Interest.................................................... 98
11.13 Special Indemnification..................................... 99
11.14 Permitted Payments and Transactions.........................100
SCHEDULES
Schedule I List of Addresses for Notices; Lending Offices; Commitment
Amounts
Schedule II List of Letters of Credit
Schedule 5.1(b) Capital Stock
Schedule 5.12 Subsidiaries
Schedule 5.13 Fee and Leased Properties
Schedule 5.15(b) UCC Filing Offices
Schedule 5.16 Trademarks and Copyrights
Schedule 8.1(a) Indebtedness to Remain Outstanding
Schedule 8.2(h) Existing Liens
Schedule 8.3(d) Existing Contingent Obligations
EXHIBITS
EXHIBIT A Form of Revolving Credit Note
EXHIBIT B Form of Term Loan Note
EXHIBIT C Form of Swing Line Note
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Company Security Agreement
EXHIBIT F-1 Form of Holdings Guarantee
EXHIBIT F-2 Form of Subsidiary Guarantee
EXHIBIT G-1 Form of Holdings Pledge Agreement
EXHIBIT G-2 Form of Company Pledge Agreement
EXHIBIT H Form of L/C Participation Certificate
EXHIBIT I Form of Swing Line Loan Participation Certificate
EXHIBIT J Form of Subsection 4.11(d)(2) Certificate
EXHIBIT K-1 Form of Opinion of Xxxxxx, Xxxx & Xxxxxxxx LLP
EXHIBIT K-2 Form of Opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
EXHIBIT L-1 Form of Company Closing Certificate
EXHIBIT L-2 Form of Subsidiaries Closing Certificate
EXHIBIT L-3 Form of Holdings Closing Certificate
EXHIBIT M Form of Mortgage Counterpart
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CREDIT AGREEMENT, dated as of October 30, 1996, among TWCC
ACQUISITION CORP., a Massachusetts corporation ("AcquisitionCo" or as
hereinafter defined to the extent provided in such definition, the "Company")
(to be merged with and into The Xxxxxxx Xxxxxx Company, a Massachusetts
corporation ("Carter's"), the several lenders from time to time parties hereto
(the "Lenders"), CHASE SECURITIES INC. ("CSI") and BT SECURITIES CORPORATION
("BTSC"), as arrangers (the "Arrangers"), CSI, as advisor to the Company in
connection with the Merger (as defined below) and the other transactions
contemplated hereby, BANKERS TRUST COMPANY, as syndication agent (in such
capacity, the "Syndication Agent"), XXXXXXX XXXXX CREDIT PARTNERS L.P. ("Xxxxxxx
Sachs"), as documentation agent (in such capacity, the "Documentation Agent")
and THE CHASE MANHATTAN BANK, a New York banking corporation, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, AcquisitionCo and Carter's have entered into an Agreement
and Plan of Merger dated as of September 18, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Merger Agreement"), pursuant to which
AcquisitionCo will be merged with and into Carter's (the "Merger"), Carter's
being the surviving corporation of the Merger, and (i) the shares of the Capital
Stock (as defined below) of Carter's outstanding immediately prior to the Merger
will be converted into and will represent the right to receive $202,500,000, as
such amount may be adjusted pursuant to the Merger Agreement (the "Merger
Consideration") and (ii) each outstanding share of common stock of AcquisitionCo
will be converted into one share of the common stock of the surviving
corporation; and
WHEREAS, in connection with the Merger, the Company has entered into
a Bridge Loan Agreement (as defined below) providing for $90,000,000 of Bridge
Subordinated Debt, the proceeds of which will be used to finance a portion of
the Merger; and
WHEREAS, prior to the Merger, AcquisitionCo, and thereafter,
Carter's (the "Company") have requested the Lenders to make loans and other
extensions of credit available to the Company to enable the Company to finance a
portion of the Merger and for the other purposes set forth herein;
NOW, THEREFORE, the Company, the Administrative Agent, the
Syndication Agent, the Documentation Agent and the Lenders agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms defined in
the caption hereto shall have the meanings set forth therein, and the following
terms have the following meanings:
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"Additional Mortgage": as defined in subsection 7.9(e).
"Affiliate": of any Person (a) any Person (other than a Subsidiary)
which, directly or indirectly, is in control of, is controlled by, or is
under common control with such Person, or (b) any Person who is a director
or officer (i) of such Person, (ii) of any Subsidiary of such Person or
(iii) of any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or indirect,
(x) to vote 25% or more of the securities having ordinary voting power for
the election of directors of such Person, whether by ownership of
securities, contract, proxy or otherwise, or (y) to direct or cause the
direction of the management and policies of such Person, whether by
ownership of securities, contract, proxy or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented or
modified from time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect
on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its principal office
in New York City (the Prime Rate not being intended to be the lowest rate
of interest charged by the Administrative Agent in connection with
extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a)
the product of (i) the Three-Month Secondary CD Rate and (ii) a fraction,
the numerator of which is one and the denominator of which is one minus
the C/D Reserve Percentage and (b) the C/D Assessment Rate; "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such
day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line
of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing
selected by it; and "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for the
day of such transactions received
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by the Administrative Agent from three federal funds brokers of recognized
standing selected by it. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective day
of such change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate, respectively.
"Alternate Base Rate Lending Office": as to each Lender, the office
of such Lender located within the United States which shall be making or
maintaining Alternate Base Rate Loans.
"Alternate Base Rate Loans": Loans at such time as they are made
and/or being maintained at a rate of interest based upon the Alternate
Base Rate.
"Applicable Cash Flow Percentage": for any fiscal year, 75%, which
percentage shall be reduced to 50% on or after the date that is the later
of (x) the last day of the 1997 fiscal year and (y) any date on which the
ratio of Consolidated Funded Indebtedness to Consolidated EBITDA
determined pursuant to subsection 8.9 is less than or equal to 3.75 to
1.00.
"Applicable Margin": for Term Loans, Revolving Credit Loans and
Swing Line Loans of the Types set forth below, the rate per annum set
forth under the relevant column heading opposite such Loans below:
Alternate
Base Rate Eurodollar
Loans Loans
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Term Loans: 2.00% 3.00%
Revolving Credit Loans: 1.50% 2.50%
Swing Line Loans: 1.50% Not applicable
"Arrangers": as defined in the Preamble hereto.
"Asset Sale": any sale, sale-leaseback, or other disposition by the
Company or any Subsidiary thereof of any of its property or assets,
including the stock of any Subsidiary of the Company, except sales and
dispositions permitted by subsections 8.5(a), (b), (c), (f) and (g).
"Assignee": as defined in subsection 11.6(c).
"Assignment and Acceptance": an assignment and acceptance
substantially in the form of Exhibit D.
"Available Revolving Credit Commitment": as to any Lender, at a
particular time, an amount equal to (a) the amount of such Lender's
Revolving Credit
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Commitment at such time less (b) the sum of (i) the aggregate unpaid
principal amount at such time of all Revolving Credit Loans made by such
Lender pursuant to subsection 3.1, (ii) such Lender's Revolving Credit
Commitment Percentage of the aggregate unpaid principal amount at such
time of all Swing Line Loans, provided that for purposes of calculating
the Revolving Credit Commitments pursuant to subsection 3.2 the amount
referred to in this clause (ii) shall be zero, (iii) such Lender's L/C
Participating Interest in the aggregate amount available to be drawn at
such time under all outstanding Letters of Credit issued by the Issuing
Lender and (iv) such Lender's Revolving Credit Commitment Percentage of
the aggregate outstanding amount of L/C Obligations; collectively, as to
all the Lenders, the "Available Revolving Credit Commitments".
"Bankruptcy Code": Title I of the Bankruptcy Reform Act of 1978, as
amended and codified at Title 11 of the United States Code.
"Board": the Board of Governors of the Federal Reserve System,
together with any successor.
"Borrowing Date": any Business Day specified in a notice pursuant to
(a) subsection 3.4 or 4.1 as a date on which the Company requests the
Swing Line Lender or the Lenders to make Loans hereunder or (b) subsection
3.5 as a date on which the Company requests the Issuing Lender to issue a
Letter of Credit hereunder.
"Bridge Loan Agreement": the Bridge Loan Agreement dated as of
October 30, 1996 among AcquisitionCo, Bankers Trust Company, as
administrative agent, and the lenders from time to time parties thereto,
as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms and the terms of this Agreement.
"Bridge Subordinated Debt": the subordinated bridge loans or
exchange notes of the Company outstanding from time to time pursuant to
the Bridge Loan Agreement or the Indenture contemplated thereby.
"Bridge Subordinated Debt Documents": the Bridge Loan Agreement and
the notes evidencing the Bridge Subordinated Debt.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"Capital Expenditures": for any period, all amounts which would, in
accordance with GAAP, be set forth as capital expenditures (exclusive of
any amount attributable to capitalized interest) on the consolidated
statement of cash flows or other similar statement of the Company and its
Subsidiaries for such period and shall in any event include expenditures
to acquire all or a portion of the Capital Stock or assets of any Person
(exclusive of expenses and fees incurred in connection with an acquisition
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and expenditures for the acquisition of cash or working capital) but shall
exclude any expenditures made with the proceeds of condemnation or eminent
domain proceedings affecting real property or with insurance proceeds;
provided that any Capital Expenditures financed with the proceeds of any
Indebtedness permitted hereunder (other than Indebtedness incurred
hereunder) shall be deemed to be a Capital Expenditure only in the period
in which, and by the amount which, any principal of such Indebtedness is
repaid.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Carter's": as defined in the Recitals hereto.
"Cash Equivalents": (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or
instrumentality thereof having maturities of not more than six months from
the date of acquisition, (b) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any Lender or with any
domestic commercial bank having capital and surplus in excess of
$300,000,000, (c) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (a)
and (b) entered into with any financial institution meeting the
qualifications specified in clause (b) above, and (d) commercial paper
issued by any Lender or the parent corporation of any Lender, and
commercial paper rated A-1 or the equivalent thereof by Standard & Poor's
Ratings Services or P-1 or the equivalent thereof by Xxxxx'x Investors
Service, Inc. and in each case maturing within six months after the date
of acquisition.
"C/D Assessment Rate": for any day the net annual assessment rate
(rounded upwards, if necessary, to the next 1/100 of 1%) determined by the
Administrative Agent to be payable on such day to the Federal Deposit
Insurance Corporation or any successor ("FDIC") for FDIC's insuring time
deposits made in Dollars at offices of the Administrative Agent in the
United States.
"C/D Reserve Percentage": for any day as applied to any Base CD
Rate, that percentage (expressed as a decimal) which is in effect on such
day, as prescribed by the Board for determining maximum reserve
requirement for a Depositary Institution (as defined in Regulation D of
the Board) in respect of new non-personal time deposits in Dollars having
a maturity of 30 days or more.
"Change in Law": with respect to any Lender, the adoption of, or
change in, any law, rule, regulation, policy, guideline or directive
(whether or not having the force of law) or any change in the
interpretation or application thereof by any
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Governmental Authority having jurisdiction over such Lender, in each case
after the Closing Date.
"Change of Control": shall be considered to have occurred if (i) at
any time prior to an IPO by the Company or Holdings, the Investors or any
of their Affiliates (provided that, for purposes of this definition only,
the reference to 25% in the definition of Affiliate contained in
subsection 1.1 shall be deemed to be 51%) or Subsidiaries, shall cease to
own, directly or indirectly, in the aggregate, at least 51% of the issued
and outstanding voting stock of Holdings, or Holdings shall cease to own
100% of the issued and outstanding voting stock of the Company, in each
case free and clear of all Liens (except, in the case of the Capital Stock
of the Company owned by Holdings, for Liens created by the Holdings Pledge
Agreement) and (ii) at any time after an IPO by the Company or Holdings,
if any Person (other than the Investors, any of their Affiliates or
Subsidiaries, any Person that is a member of the senior management of the
Company or Holdings, any entity the majority of the equity ownership
interests of which is owned by such senior management of the Company or
Holdings or any Person acting in the capacity of an underwriter), whether
singly or in concert with one or more Persons, shall, directly or
indirectly, have acquired, or acquire the power (x) to vote or direct the
voting of 30% or more, on a fully diluted basis, of the outstanding common
stock of the Company or of the common stock of Holdings or (y) to elect or
designate for election a majority of the Board of Directors of the Company
by voting power, contract or otherwise.
"Chase": The Chase Manhattan Bank, a New York banking corporation,
and its successors.
"Closing Date": the date (which shall be on or prior to November 30,
1996) on which the Lenders make their initial Loans or the Issuing Lender
issues the initial Letter of Credit.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Credit Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commercial L/C": a commercial documentary Letter of Credit under
which the Issuing Lender agrees to make payments in Dollars for the
account of the Company, on behalf of the Company or a Subsidiary thereof,
in respect of obligations of the Company or such Subsidiary in connection
with the purchase of goods or services in the ordinary course of business.
"Commitment": as to any Lender at any time, such Lender's Swing Line
Commitment, Term Loan Commitment and Revolving Credit Commitment;
collectively, as to all the Lenders, the "Commitments".
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"Commitment Percentage": as to any Lender at any time, its Term Loan
Commitment Percentage or its Revolving Credit Commitment Percentage, as
the context may require.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Company and which is treated as a single employer under Section 414 of the
Code.
"Company": as defined in the Recitals hereto.
"Company Pledge Agreement": the Pledge Agreement, substantially in
the form of Exhibit G-2, to be made by the Company in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as the same
may be amended, modified or supplemented from time to time.
"Company Preferred Stock": the fixed-rate preferred stock of the
Company to be issued on or before the Closing Date having an aggregate
liquidation value of $20,000,000 (net of an allocable fee not to exceed
$3,000,000).
"Company Security Agreement": the Company Security Agreement,
substantially in the form of Exhibit E, to be made by the Company in favor
of the Administrative Agent, for the ratable benefit of the Lenders, as
the same may be amended, modified or supplemented from time to time.
"Consolidated Current Assets": at a particular date, all amounts
which would, in conformity with GAAP, be included under current assets on
a consolidated balance sheet of the Company and its Subsidiaries as at
such date.
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be included under current
liabilities on a consolidated balance sheet of the Company and its
Subsidiaries as at such date, excluding the current portion of long-term
debt and the entire outstanding principal amount of the Revolving Credit
Loans.
"Consolidated EBITDA": for any period, the consolidated net income
of the Company and its Subsidiaries for such period, plus, without
duplication and to the extent reflected as a charge in the statement of
such consolidated net income for such period, the sum of (a) total income
tax expense (including the tax expense or benefit related to the Company
Preferred Stock), (b) interest expense, amortization or writeoff of debt
discount, debt issuance, warrant and other equity (including Company
Preferred Stock) issuance costs and commissions, discounts, redemption
premium and other fees and charges associated with the Loans, Standby
L/Cs, the Subordinated Debt or the acquisition or repayment of any debt
securities of the Company permitted hereunder, and net costs associated
with Interest Rate Agreements to which the
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Company is a party in respect of the Loans (including commitment fees and
other periodic bank charges), (c) costs of surety bonds, (d) depreciation
and amortization expense, (e) amortization of inventory write-up under APB
16, amortization of intangibles (including, but not limited to, goodwill
and costs of interest-rate caps, license agreements and the cost of
non-competition agreements) and organization costs, (f) non-cash
amortization of Financing Leases, (g) franchise taxes, (h) management fees
paid as contemplated by subsection 11.14(a) and charges related to
management fees prepaid in connection with the Merger, (i) all cash
dividend payments (and non-cash dividend expenses) on any series of
preferred stock (including the Company Preferred Stock), (j) any expenses
incurred in connection with the Merger including but not limited to
bonuses paid to management, seller's and Company's fees and expenses and
payments under the Long-Term Incentive Compensation and Management Equity
Participation Agreements, (k) expenses recorded in historical periods
through the Closing Date related to the Long-Term Incentive Compensation
Plan, Management Equity Participation Plan and Allocation of Class C
Common Stock, (l) any other write-downs, write-offs, minority interests
and other non-cash charges in determining such consolidated net income for
such period and (m) all extraordinary non-cash charges in determining such
consolidated net income for such period; provided that (i) the cumulative
effect of a change in accounting principles (effected either through
cumulative effect adjustment or a retroactive application) shall be
excluded, (ii) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded; (iii) the impact of foreign currency translations shall
be excluded; and (iv) all other extraordinary gains and losses shall be
excluded.
"Consolidated Funded Indebtedness": at a particular date, all
Indebtedness (other than Indebtedness described in clauses (b), (c), (d)
or (e) of the definition of "Indebtedness" included in this subsection
1.1) of the Company and its Subsidiaries determined on a consolidated
basis in accordance with GAAP at such date.
"Contingent Obligation": as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness, dividends
or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or
not contingent (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be
9
deemed to be an amount equal to the stated or determinable amount (based
on the maximum reasonably anticipated net liability in respect thereof as
determined by the Company in good faith) of the primary obligation or
portion thereof in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated net
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by the Company in good faith.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.
"Credit Documents": the collective reference to this Agreement, the
Notes, the Pledge Agreements, the Security Agreements and the Guarantees.
"Credit Parties": the collective reference to Holdings, the Company
and each Subsidiary of the Company which may from time to time be party to
a Credit Document.
"Default": any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Company other than a
Foreign Subsidiary.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any Governmental Authority or requirements of
law (including, without limitation, common law) regulating or imposing
liability or standards of conduct concerning environmental or public
health protection matters, including, without limitation, Hazardous
Materials, as now or may at any time hereafter be in effect.
"Environmental Permits": any and all permits, licenses,
registrations, notifications, exemptions and any other authorizations
required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having
10
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined by the Administrative Agent to be the arithmetic mean (rounded
to the nearest 1/100th of 1%) of the offered rates for deposits in Dollars
with a term comparable to such Interest Period that appears on the
Telerate British Bankers Assoc. Interest Settlement Rates Page (as defined
below) at approximately 11:00 A.M., London time, on the second full
Business Day preceding the first day of such Interest Period; provided,
however, that if there shall at any time no longer exist a Telerate
British Bankers Assoc. Interest Settlement Rates Page, "Eurodollar Base
Rate" shall mean, with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum equal to the rate at
which Chase is offered Dollar deposits at or about 10:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans are
then being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to
the amount of its Eurodollar Loan to be outstanding during such Interest
Period. "Telerate British Bankers Assoc. Interest Settlement Rates Page"
shall mean the display designated as Page 3750 on the Telerate System
Incorporated Service (or such other page as may replace such page on such
service for the purpose of displaying the rates at which Dollar deposits
are offered by leading banks in the London interbank deposit market).
"Eurodollar Lending Office": as to any Lender the office of such
Lender which shall be making or maintaining Eurodollar Loans.
"Eurodollar Loans": Loans at such time as they are made and/or being
maintained at a rate of interest based upon a Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
-----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Company, commencing
with the fiscal year ending on December 31, 1997, the excess of (a)
Consolidated EBITDA for such fiscal year over (b) the sum, without
duplication, of (i) the aggregate amount
11
actually paid by the Company and its Subsidiaries in cash during such
fiscal year on account of capital expenditures (other than capital
expenditures made with the proceeds of eminent domain or condemnation
proceedings to the extent such proceeds are not included in the
determination of Consolidated EBITDA for such fiscal year), (ii) the
aggregate amount of payments of principal in respect of any Indebtedness
during such fiscal year (other than any such payments of principal
pursuant to subsections 4.4(b)(i), (ii), (iii) and (iv) or any such
payments of principal in respect of any revolving credit facility to the
extent that there is not an equivalent reduction in such facility), (iii)
increases in working capital (calculated as Consolidated Current Assets at
the end of such fiscal year minus Consolidated Current Liabilities as at
the end of such fiscal year) of the Company and its Subsidiaries for such
fiscal year (excluding any increase in cash or Cash Equivalents above an
increase deemed in good faith by the Company to be necessary or desirable
for the operation of the business of the Company and its Subsidiaries),
(iv) cash interest expense (including fees paid in connection with Letters
of Credit and surety bonds and commitment fees and other periodic bank
charges) of the Company, (v) the amount of dividends actually paid in cash
by the Company to Holdings during such fiscal year to the extent not
deducted from revenues in determining consolidated net income of the
Company and its Subsidiaries for such fiscal year, in accordance with
subsection 8.11(c)(i), (ii), (iv) and (v), (vi) the amount of taxes
actually paid in cash by the Company and its Subsidiaries for such fiscal
year either during such fiscal year or within a normal payment period
thereof, (vii) the amount of cash actually paid to repurchase Capital
Stock of Holdings pursuant to subsection 8.11(c)(iii), (viii) to the
extent added to consolidated net income of the Company and its
Subsidiaries in calculating Consolidated EBITDA for such fiscal year, the
net cost of Interest Rate Agreements, franchise taxes and management fees,
(ix) the net income of any Subsidiary shall be excluded to the extent that
such amount is accounted for under the equity method to the extent cash
dividends are not paid or the declaration or payment of dividends is not
permitted without prior governmental approval (which has not been
obtained), and (x) the amount of cash actually paid by the Company in
connection with clauses (b) (without duplication) (g), (h), (i), (j), (k)
and (iii) and (iv) of clause (m) in the definition of Consolidated EBITDA.
"Existing Credit Agreement": the Second Amended and Restated Credit
Agreement, dated as of December 5, 1991, among The Xxxxxxx Xxxxxx Company
(for itself and as successor in interest to Xxxxxx Holdings Corp.), the
Lenders named therein, and The Bank of New York, as Agent and Issuing
Bank, as amended by Amendment Nos. 1, 2, 3, 4, 5 and 6 dated September 30,
1993, June 30, 1994, October 31, 1994, November 18, 1994, April 30, 1995,
and May 23, 1996, respectively, and all agreements and instruments related
thereto.
"Fee Property": as defined in subsection 5.13.
"Financing Lease": (a) any lease of property, real or personal, the
obligations under which are capitalized on a consolidated balance sheet of
the Company and its consolidated Subsidiaries, and (b) any other such
lease to the extent that the then
12
present value of any rental commitment thereunder should, in accordance
with GAAP, be capitalized on a balance sheet of the lessee.
"Foreign Subsidiary": any Subsidiary of the Company which is not
organized under the laws of the United States or any state thereof or the
District of Columbia. For purposes of subsections 8.1, 8.3 and 8.6,
Carter's de San Xxxxx, Inc., a Delaware corporation, shall be deemed to be
a Foreign Subsidiary except to the extent that any Indebtedness incurred
by it, any Guarantee made for its benefit or any investment, loan or
advance made to it are for the purpose of financing the acquisition or
construction of assets or the conduct of businesses (including its
existing business in the Dominican Republic) that are generally the
subject of liens perfected in accordance with a Subsidiary Security
Agreement or other Security Document reasonably satsfactory to the
Administrative Agent.
"GAAP": generally accepted accounting principles in the United
States in effect from time to time.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantees": the collective reference to the Holdings Guarantee,
the Subsidiary Guarantee and any guarantee which may from time to time be
executed and delivered by a Subsidiary of the Company pursuant to
subsection 7.9.
"Hazardous Materials": any hazardous materials, hazardous wastes,
hazardous pesticides or hazardous or toxic substances, and any other
material that may give rise to liability under any Environmental Law,
including, without limitation, asbestos, petroleum, any other petroleum
products (including gasoline, crude oil or any fraction thereof),
polychlorinated biphenyls and urea-formaldehyde insulation.
"Holdings": Xxxxxx Holdings, Inc., a Massachusetts corporation.
"Holdings Guarantee": the Holdings Guarantee substantially in the
form of Exhibit F-1, to be made by Holdings in favor of the Administrative
Agent, for the ratable benefit of the Lenders, as the same may be amended,
modified or supplemented from time to time.
"Holdings Pledge Agreement": the Pledge Agreement, substantially in
the form of Exhibit G-1, to be made by Holdings in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as the same
may be amended, modified or supplemented from time to time.
"Holdings Subordinated Debt": as defined in subsection 6.1(c)(ii).
13
"Indebtedness": of a Person, at a particular date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (b) the undrawn face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder and unpaid reimbursement
obligations with respect thereto, (c) all liabilities (other than Lease
Obligations) secured by any Lien on any property owned by such Person,
even though such Person has not assumed or become liable for the payment
thereof, (d) Financing Leases and (e) all indebtedness of such Person
arising under acceptance facilities; but excluding (i) trade and other
accounts payable and accrued expenses payable in the ordinary course of
business which are not overdue for a period of more than 90 days or, if
overdue for more than 90 days, as to which a dispute exists and adequate
reserves in conformity with GAAP have been established on the books of
such Person and (ii) letters of credit supporting the purchase of goods in
the ordinary course of business and expiring no more than six months from
the date of issuance.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Installment Payment Date": as defined in subsection 4.4(c).
"Interest Coverage Ratio": on the last day of any fiscal quarter of
the Company, the ratio of (a) Consolidated EBITDA for the period of four
fiscal quarters ending on such day (or, if shorter, the period commencing
on the first day of the first fiscal quarter commencing on or after the
Closing Date and ending on such day) to (b) cash interest expense
(excluding fees payable on account of Letters of Credit, and, to the
extent included in interest expense in accordance with GAAP, net costs
associated with Interest Rate Agreements to which the Company is party in
respect of the Loans and other periodic bank charges and amortization of
debt discount (including discount of liabilities and reserves established
under APB 16), costs of debt issuance and interest expense on customer
deposits) for such period net of interest income, in each case for or
during such period on a consolidated basis for the Company and its
Subsidiaries.
"Interest Payment Date": (a) as to Alternate Base Rate Loans, the
last day of each March, June, September and December, commencing on the
first such day to occur after any Alternate Base Rate Loans are made or
any Eurodollar Loans are converted to Alternate Base Rate Loans, (b) as to
any Eurodollar Loan in respect of which the Company has selected an
Interest Period of one, two or three months, the last day of such Interest
Period and (c) as to any Eurodollar Loan in respect of which the Company
has selected a longer Interest Period than the periods described in clause
(b), the last day of each March, June, September and December falling
within such Interest Period and the last day of such Interest Period.
14
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on, as the case may be,
the Borrowing Date or conversion date with respect to such
Eurodollar Loan and ending one, two, three or six months thereafter
(or, if and when available to all the relevant Lenders, nine or
twelve months thereafter) as selected by the Company in its notice
of borrowing as provided in subsection 4.1 or its notice of
conversion as provided in subsection 4.2; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter (or, if and when
available to all the relevant Lenders, nine or twelve months
thereafter) as selected by the Company by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect to such
Eurodollar Loan;
provided that the foregoing provisions relating to Interest Periods are
subject to the following:
(A) if any Interest Period would otherwise end on a day which
is not a Business Day, that Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension
would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately
preceding Business Day;
(B) any Interest Period that would otherwise extend beyond (i)
in the case of an Interest Period for a Term Loan, the final
Installment Payment Date listed on Schedule II for such Term Loan
shall end on such Installment Payment Date or, if such Installment
Payment Date shall not be a Business Day, on the next preceding
Business Day; and (ii) in the case of any Interest Period for a
Revolving Credit Loan, the Revolving Credit Termination Date shall
end on the Revolving Credit Termination Date, or if the Revolving
Credit Termination Date shall not be a Business Day, on the next
preceding Business Day;
(C) if the Company shall fail to give notice as provided above
in clause (b), it shall be deemed to have selected a conversion of a
Eurodollar Loan into an Alternate Base Rate Loan (which conversion
shall occur automatically and without need for compliance with the
conditions for conversion set forth in subsection 4.2);
(D) any Interest Period that begins on the last day of a
calendar month (or on a day for which there is no numerically
corresponding day in the
15
calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month; and
(E) the Company shall select Interest Periods so as not to
require a prepayment (to the extent practicable) or a scheduled
payment of a Eurodollar Loan during an Interest Period for such
Eurodollar Loan.
"Interest Rate Agreement": any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"Investcorp": Investcorp S.A., a Luxembourg corporation.
"Investors": Investcorp, certain Affiliates and the international
investors who are the initial holders of the Holdings Capital Stock.
"IPO": any sale by either the Company or Holdings through a public
offering of its common (or other voting) stock pursuant to an effective
registration statement (other than a registration statement on Form X-0,
X-0 or any successor or similar form) filed under the Securities Act of
1933, as amended.
"Issuing Lenders": Chase and any of its Affiliates, including The
Chase Manhattan Bank Delaware, as issuer of the Letters of Credit; with
respect to any Letter of Credit, the term "Issuing Lender" shall mean the
Issuing Lender with respect to such Letter of Credit.
"L/C Application": as defined in subsection 3.5(a).
"L/C Obligations": the obligations of the Company to reimburse the
Issuing Lender for any payments made by the Issuing Lender under any
Letter of Credit that have not been reimbursed by the Company pursuant to
subsection 3.8(a).
"L/C Participating Interest": an undivided participating interest in
the face amount of each issued and outstanding Letter of Credit and the
L/C Application relating thereto.
"L/C Participation Certificate": a certificate in substantially the
form of Exhibit I.
"Lease Obligations": of the Company and its Subsidiaries, as of the
date of any determination thereof, the rental commitments of the Company
and its Subsidiaries determined on a consolidated basis, if any, under
leases for real and/or personal property (net of rental commitments from
sub-leases thereof), excluding however, obligations under Financing
Leases.
"Leased Properties": as defined in subsection 5.13.
16
"Letters of Credit": the collective reference to the Commercial L/Cs
and the Standby L/Cs; individually, a "Letter of Credit".
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing
except for the filing of financing statements in connection with Lease
Obligations incurred by the Company or its Subsidiaries to the extent that
such financing statements relate to the property subject to such Lease
Obligations).
"Loans": the collective reference to the Swing Line Loans, the Term
Loans and the Revolving Credit Loans; individually, a "Loan".
"Merger": as defined in the Recitals hereto.
"Merger Agreement": as defined in the Recitals hereto.
"Merger Consideration": as defined in the Recitals hereto.
"Mortgages" as defined in subsection 7.9(d).
"Mortgaged Properties": the Real Property designated as "Mortgaged
Property" on Schedule 5.13.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds": the aggregate cash proceeds received by Holdings,
the Company or any Subsidiary of the Company in respect of:
(a) (i) any issuance or borrowing of any debt securities or
loans by the Company or any Subsidiary other than debt or loans
permitted to be incurred or borrowed pursuant to subsection 8.1
(except for the amount of Bridge Subordinated Debt or Permanent
Subordinated Debt to be applied to prepay the Loans pursuant to
subsection 8.1(d), which amount shall be "Net Proceeds") or (ii) any
issuance of Capital Stock (excluding any such issuance to any
Investor or any Affiliate thereof);
(b) any Asset Sale, excluding (i) any net proceeds received
upon any condemnation or exercise of rights of eminent domain to the
extent the same shall be deemed not to constitute Net Proceeds
pursuant to the proviso to
17
subsection 8.5(d) and (ii) any proceeds of insurance received upon
any casualty or loss;
(c) any cash received in respect of substantially like-kind
exchanges of property to the extent provided in the proviso to
subsection 8.5(e); and
(d) any cash payments received in respect of promissory notes
delivered to the Company or such Subsidiary in respect of an Asset
Sale;
in each case net of (without duplication) (A) the amount required to repay
any Indebtedness (other than the Loans) secured by a Lien on any assets of
the Company or a Subsidiary of the Company that are collateral for any
such debt securities or loans that are sold or otherwise disposed of in
connection with such Asset Sale, (B) the reasonable expenses (including
legal fees and brokers' and underwriters' commissions, lenders fees or
credit enhancement fees, in any case, paid to third parties or, to the
extent permitted hereby, Affiliates) incurred in effecting such issuance
or sale and (C) any taxes reasonably attributable to such sale and
reasonably estimated by the Company or such Subsidiary to be actually
payable.
"Non-Funding Lender": as defined in subsection 4.9(c).
"Notes": the collective reference to the Swing Line Note, the
Revolving Credit Notes and the Term Loan Notes; each of the Notes, a
"Note".
"Participants": as defined in subsection 11.6(b).
"Participating Lender": any Lender (other than the Issuing Lender)
with respect to its L/C Participating Interest in each Letter of Credit.
"Payment Sharing Notice": a written notice from the Company or any
Lender informing the Administrative Agent that an Event of Default has
occurred and is continuing and directing the Administrative Agent to
allocate payments thereafter received from or on behalf of the Company in
accordance with the provisions of subsection 4.9.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor.
"Permanent Subordinated Debt": (i) unsecured notes or debentures of
the Company, subordinated to the prior payment of the Loans and the other
obligations under the Credit Documents, that may be issued by the Company
after the Closing Date, provided that (a) unless otherwise agreed to by
the Supermajority Lenders, no part of the principal amount of any such
notes or debentures shall have a maturity date earlier than October 31,
2004, (b) unless otherwise agreed to by the Required Lenders, the
subordination provisions of which are as favorable to the Lenders as the
Exchange
18
Notes issued under, and as defined in, the Bridge Loan Agreement, the
other terms and conditions thereof (including, without limitation,
subordination, covenant and events of default provisions thereof but
excluding any call protection provisions) taken as a whole shall be at
least as favorable to the Company and the Lenders as the Exchange Notes
issued under, and as defined in, the Bridge Loan Agreement and the
non-default cash interest rate thereon shall not exceed 14% per annum and
the total non-default interest rate shall not exceed 16% per annum, (c) no
covenant contained in this Agreement or any of the other Credit Documents
would be violated on the proposed issuance date after giving effect to (I)
the issuance of such notes or debentures, (II) the payment of all issuance
costs, commissions, discounts, redemption premiums and other fees and
charges associated therewith, (III) the use of proceeds thereof and (IV)
the redemption, repayment, retirement and repurchase of all Indebtedness
of the Company and its Subsidiaries to be redeemed, repaid or repurchased
in connection therewith and (d) substantially final drafts of the
documentation governing any such notes or debentures, showing the terms
thereof, shall have been furnished to the Lenders at least 5 days prior to
the date of issuance of such notes or debentures and (ii) unsecured notes
or debentures of the Company, subordinated to the prior payment of the
Loans and the other obligations under the Credit Documents, that may be
issued by the Company to refinance previously issued Permanent
Subordinated Debt, provided that (a) unless otherwise agreed to by the
Required Lenders, the maturity date, interest rate, scheduled
amortization, final maturity and subordination provisions shall be at
least as favorable to the Company and the Lenders as such refinanced
Permanent Subordinated Debt and the other terms and conditions thereof
(including, without limitation the covenant and event of default
provisions thereof) taken as a whole shall be at least as favorable to the
Company and the Lenders as such refinanced Permanent Subordinated Debt and
(b) the conditions contained in clauses (i)(c) and (d) of this definition
shall be met.
"Permitted Liens": Liens permitted to exist under subsection 8.2.
"Person": an individual, partnership, corporation, business trust,
joint stock company, limited liability company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Phase I Environmental Site Assessments": the Phase I Environmental
Site Assessments for Xxxxxxx Xxxxxx Company Mill Nos. 2, 5, 6, 8, 9, 10,
11, 12, 15, 17, the Xxxxx Distribution Facility, the Hogansville
Distribution Facility and the Xxxxxxx Operations Facility prepared by
Strata Environmental in July and August 1996 and the Environmental Due
Diligence Memoranda on The Xxxxxxx Xxxxxx Company prepared by
Environmental Performance, Inc., dated August 23, 1996 and October 8,
1996.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
19
"Pledge Agreements": the collective reference to the Holdings Pledge
Agreement, the Company Pledge Agreement and any pledge agreement from time
to time executed and delivered by the Company providing for the pledge of
the Capital Stock of any Subsidiary pursuant to subsection 7.9.
"Real Property": each Fee Property and Leased Property listed on
Schedule 5.13.
"Refunded Swing Line Loans": as defined in subsection 3.4(b).
"Register": as defined in subsection 11.6(d).
"Related Document": any agreement, certificate, document or
instrument relating to a Letter of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization as such term is used in
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period
is waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
ss. 2615.
"Required Lenders": at a particular time, the holders of at least
51% of the sum of (i) the aggregate unpaid principal amount of the Term
Loans, if any, and (ii) the Revolving Credit Commitments or, if the
Revolving Credit Commitments are terminated, the aggregate unpaid
principal amount of the Revolving Credit Loans, and participations in
Swing Line Loans and the aggregate amount available to be drawn at such
time under all outstanding Letters of Credit and L/C Obligations. The Term
Loans and the Revolving Credit Commitments of any Non-Funding Lender shall
be disregarded in determining Required Lenders at any time.
"Requirement of Law": as to any Person, the Articles or Certificate
of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, order,
or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any
of its property, or to which such Person or any of its property is
subject.
"Responsible Officer": with respect to any Person, the president,
chief executive officer, the chief operating officer, the chief financial
officer, treasurer, controller or any vice president of such Person.
"Revolving Credit Commitment": as to any Lender, its obligations to
make Revolving Credit Loans to the Company pursuant to subsection 3.1, and
to purchase its L/C Participating Interest in any Letter of Credit, in an
aggregate amount not to
20
exceed the amount set forth under such Lender's name in Schedule I
opposite the caption "Revolving Credit Commitment" or in Schedule 1 to the
Assignment and Acceptance by which such Lender acquired its Revolving
Credit Commitment, as the same may be reduced from time to time pursuant
to subsection 4.3 or 4.4(b) or adjusted pursuant to subsection 11.6(c);
collectively, as to all the Lenders, the "Revolving Credit Commitments".
"Revolving Credit Commitment Percentage": as to any Lender at any
time, the percentage of the aggregate Revolving Credit Commitments then
constituted by such Lender's Revolving Credit Commitment.
"Revolving Credit Commitment Period": the period from and including
the Closing Date to but not including the Revolving Credit Termination
Date.
"Revolving Credit Loan" and "Revolving Credit Loans": as defined in
subsection 3.1(a).
"Revolving Credit Lender": any Lender with a Revolving Credit
Commitment.
"Revolving Credit Note": as defined in subsection 4.13(e).
"Revolving Credit Termination Date": the earlier of (a) October 31,
2001 and (b) such other earlier date as the Revolving Credit Commitments
shall terminate hereunder.
"Security Agreements": the collective reference to the Company
Security Agreement, the Subsidiary Security Agreement and any security
agreement which may from time to time be executed and delivered by a
Subsidiary of the Company pursuant to subsection 7.9.
"Security Documents": the collective reference to the Pledge
Agreements, the Security Agreements and the Mortgages.
"Sellers": as defined in the Recitals hereto.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Standby L/C": an irrevocable letter of credit under which the
Issuing Lender agrees to make payments in Dollars for the account of the
Company, on behalf of the Company or any Subsidiary thereof in respect of
obligations of the Company or such Subsidiary incurred pursuant to
contracts made or performances undertaken or to be undertaken or like
matters relating to contracts to which the Company or such Subsidiary is
or proposes to become a party in the ordinary course of the Company's or
such Subsidiary's business, including, without limiting the foregoing, for
insurance
21
purposes or in respect of advance payments or as bid or performance bonds
or for any other purpose for which a standby letter of credit might
customarily be issued.
"Subordinated Debt": collectively, the Bridge Subordinated Debt and
the Permanent Subordinated Debt.
"Subsection 4.11(d)(2) Certificate": as defined in subsection
4.11(d).
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock of each class
or other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, by such Person
or by one or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person. (A Subsidiary shall be deemed
wholly-owned by a Person who owns all of the voting shares of stock or
other interests of such Subsidiary having voting power under ordinary
circumstances to vote for directors or other managers of such corporation,
partnership or other entity, except for directors' qualifying shares.)
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Company.
"Subsidiary Guarantee": the Subsidiary Guarantee, substantially in
the form of Exhibit F-2, to be made by each Domestic Subsidiary of the
Company in favor of the Administrative Agent for the ratable benefit of
the Lenders, as the same may be amended, modified or supplemented from
time to time.
"Subsidiary Security Agreement": the Subsidiary Security Agreement,
in form and substance reasonably satisfactory to the Administrative Agent,
to be made by certain Domestic Subsidiaries of the Company in favor of the
Administrative Agent for the ratable benefit of the Lenders, as the same
may be amended, modified or supplemented from time to time.
"Supermajority Lenders": at a particular time, the holders of at
least 66-2/3% of the sum of (i) the aggregate unpaid principal amount of
the Term Loans, if any, and (ii) the Revolving Credit Commitments or, if
the Revolving Credit Commitments are terminated, the aggregate unpaid
principal amount of the Revolving Credit Loans, and participations in
Swing Line Loans and the aggregate amount available to be drawn at such
time under all outstanding Letters of Credit and L/C Obligations. The Term
Loans and the Revolving Credit Commitments of any Non-Funding Lender shall
be disregarded in determining Supermajority Lenders at any time.
"Swing Line Commitment": the Swing Line Lender's obligation to make
Swing Line Loans pursuant to subsection 3.4.
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"Swing Line Lender": Chase in its capacity as lender of the Swing
Line Loans.
"Swing Line Loan Participation Certificate": a certificate in
substantially the form of Exhibit I.
"Swing Line Loans": as defined in subsection 3.4(a).
"Swing Line Note": as defined in subsection 4.13(e).
"Term Loan" and "Term Loans": as defined in subsection 2.1.
"Term Loan Commitment": as to any Lender, its obligation to make a
Term Loan to the Company pursuant to subsection 2.1 in an aggregate amount
not to exceed the amount set forth under such Lender's name in Schedule I
opposite the caption "Term Loan Commitment" or in Schedule 1 to the
Assignment and Acceptance pursuant to which a Lender acquires its Term
Loan Commitment, as the same may be adjusted pursuant to subsection
11.6(c); collectively, as to all the Lenders, the "Term Loan Commitments".
"Term Loan Commitment Percentage": as to any Lender at any time, the
percentage of the aggregate Term Loan Commitments then constituted by such
Lender's Term Loan Commitment.
"Term Loan Note": as defined in subsection 4.13(e).
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an Alternate Base Rate Loan or
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, and any amendments thereof.
"United States": the United States of America.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, any other Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes, any other Credit Document and
any certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Company and its Subsidiaries not defined in subsection 1.1
and accounting terms partly defined in subsection 1.1 to the extent not defined,
shall have the respective meanings given
23
to them under GAAP. To the extent there are any changes in GAAP from the date of
this Agreement, the financial covenants set forth herein at the option of the
Company will either (i) continue to be determined in accordance with GAAP in
effect on the Closing Date, as applicable, or (ii) be adjusted or reset to
reflect such changes in GAAP, such adjustments or resets to be mutually agreed
to by the Company and the Administrative Agent.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to the singular and plural forms of such terms.
SECTION 2. TERM LOANS
2.1 Term Loans. Subject to the terms and conditions hereof, each
Lender severally agrees to make a loan in Dollars (individually, a "Term Loan";
and collectively, the "Term Loans") to the Company on the Closing Date, in an
aggregate principal amount equal to such Lender's Term Loan Commitment. The Term
Loans shall be made initially as Alternate Base Rate Loans.
2.2 Repayment of Term Loans. The Company shall repay the Term Loans
as provided in subsection 4.4(c).
2.3 Use of Proceeds. The proceeds of the Term Loans shall be used
(a) to finance a portion of the Merger Consideration and other payments pursuant
to the Merger Agreement and to pay fees, expenses and financing costs in
connection therewith, and (b) to refinance certain of the existing Indebtedness
of the Company and its Subsidiaries.
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
3.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to the extent of its Revolving
Credit Commitment to extend credit to the Company from time to time on any
Borrowing Date during the Revolving Credit Commitment Period (i) by purchasing
an L/C Participating Interest in each Letter of Credit issued by the Issuing
Lender and (ii) by making loans in Dollars (individually, such a Loan is a
"Revolving Credit Loan", and collectively such Loans are the "Revolving Credit
Loans") to the Company from time to time. Notwithstanding the above, in no event
shall any Revolving Credit Loans be made, or Letter of Credit be issued, if the
aggregate amount of the Revolving Credit Loans to be made or Letter of Credit to
be issued would, after giving effect to the use of proceeds, if any, thereof,
exceed the aggregate Available Revolving Credit
24
Commitments nor shall any Letter of Credit be issued if after giving effect
thereto the sum of the undrawn amount of all outstanding Letters of Credit and
the amount of all L/C Obligations would exceed $10,000,000. During the Revolving
Credit Commitment Period, the Company may use the Revolving Credit Commitments
by borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof, and/or by
having the Issuing Lender issue Letters of Credit, having such Letters of Credit
expire undrawn upon or if drawn upon, reimbursing the Issuing Lender for such
drawing, and having the Issuing Lender issue new Letters of Credit.
(b) The Revolving Credit Loans made on the Closing Date shall be
made initially as Alternate Base Rate Loans. Each borrowing of Revolving Credit
Loans pursuant to the Revolving Credit Commitments shall be in an aggregate
principal amount of the lesser of (i) $500,000 or a whole multiple of $100,000
in excess thereof in the case of Alternate Base Rate Loans, and $1,000,000 or a
whole multiple of $500,000 in excess thereof, in the case of Eurodollar Loans
and (ii) the Available Revolving Credit Commitments, except that any borrowing
of Revolving Credit Loans to be used solely to pay a like amount of Swing Line
Loans may be in the aggregate principal amount of such Swing Line Loans.
3.2 Commitment Fee. The Company agrees to pay to the Administrative
Agent for the account of each Lender (other than any Non-Funding Lender) a
commitment fee from and including the Closing Date to and including the
Revolving Credit Termination Date, computed at the rate of 1/2 of 1% per annum
on the average daily amount of the Available Revolving Credit Commitment of such
Lender during the period for which payment is made (whether or not the Company
shall have satisfied the applicable conditions to borrow or for issuance of a
Letter of Credit set forth in Section 6). Such commitment fee shall be payable
quarterly in arrears on the last day of each March, June, September and December
and on the Revolving Credit Termination Date, commencing on the first such date
to occur on or following the Closing Date (or, if earlier, the Revolving Credit
Termination Date).
3.3 Proceeds of Revolving Credit Loans. The Company shall use the
proceeds of Revolving Credit Loans (a) as set forth in subsection 2.3 and (b)
for general corporate purposes of the Company and its Subsidiaries.
3.4 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees, so long as the Administrative Agent has
not received notice that an Event of Default has occurred and is continuing, to
make swing line loans (individually, a "Swing Line Loan"; collectively, the
"Swing Line Loans") to the Company from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed $5,000,000, provided that no Swing Line Loan may be made if the
aggregate principal amount of the Swing Line Loans to be made would exceed the
aggregate Available Revolving Credit Commitments at such time. Amounts borrowed
by the Company under this subsection 3.4 may be repaid and, through but
excluding the Revolving Credit Termination Date, reborrowed. All Swing Line
Loans shall be made as Alternate Base Rate Loans and shall not be entitled to be
converted into Eurodollar Loans. The Company shall give the Swing Line Lender
irrevocable notice (which
25
notice must be received by the Swing Line Lender prior to 3:00 p.m., New York
City time) on the requested Borrowing Date specifying the amount of each
requested Swing Line Loan, which shall be in an aggregate minimum amount of
$250,000 or a whole multiple of $100,000 in excess thereof. The proceeds of each
Swing Line Loan will be made available by the Swing Line Lender to the Company
by crediting the account of the Company at the office of the Swing Line Lender
with such proceeds. The proceeds of Swing Line Loans may be used solely for the
purposes referred to in subsection 3.3.
(b) The Swing Line Lender at any time in its sole and absolute
discretion may, and on the fifteenth day (or if such day is not a Business Day,
the next Business Day) and last Business Day of each month shall, on behalf of
the Company (which hereby irrevocably directs the Swing Line Lender to act on
its behalf) request each Revolving Credit Lender, including the Swing Line
Lender, to make a Revolving Credit Loan in an amount equal to such Lender's
Revolving Credit Commitment Percentage of the amount of the Swing Line Loans
(the "Refunded Swing Line Loans") outstanding on the date such notice is given.
Unless any of the events described in paragraph (f) of Section 9 shall have
occurred (in which event the procedures of paragraph (c) of this subsection 3.4
shall apply) each such Lender shall make the proceeds of its Revolving Credit
Loan available to the Swing Line Lender for the account of the Swing Line Lender
at the Alternate Base Rate Lending Office of the Swing Line Lender prior to
12:00 noon (New York City time) in funds immediately available on the Business
Day next succeeding the date such notice is given. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the Refunded Swing
Line Loans.
(c) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (b) of this subsection 3.4 one of the events described in paragraph
(f) of Section 9 shall have occurred, each Revolving Credit Lender will, on the
date such Loan was to have been made, purchase an undivided participating
interest in the Refunded Swing Line Loan in an amount equal to its Revolving
Credit Commitment Percentage of such Refunded Swing Line Loan. Each such Lender
will immediately transfer to the Swing Line Lender in immediately available
funds, the amount of its participation and upon receipt thereof the Swing Line
Lender will deliver to such Lender a Swing Line Loan Participation Certificate
dated the date of receipt of such funds and in such amount.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's participating interest in a
Refunded Swing Line Loan, the Swing Line Lender receives any payment on account
thereof, the Swing Line Lender will distribute to such Lender its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's participating
interest was outstanding and funded) in like funds as received; provided,
however, that in the event that such payment received by the Swing Line Lender
is required to be returned, such Lender will return to the Swing Line Lender any
portion thereof previously distributed by the Swing Line Lender to it in like
funds as such payment is required to be returned by the Swing Line Lender.
26
(e) The obligation of each Revolving Credit Lender to purchase
participating interests pursuant to subsection 3.4(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, the Company or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of the Company; (iv) any breach of this Agreement by the Company or
any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
3.5 Issuance of Letters of Credit. (a) The Company may from time to
time request the Issuing Lender to issue a Standby L/C or a Commercial L/C by
delivering to the Administrative Agent at its address specified in subsection
11.2 a letter of credit application in the Issuing Lender's then customary form
(the "L/C Application") completed to the satisfaction of the Issuing Lender,
together with the proposed form of such Letter of Credit (which shall comply
with the applicable requirements of paragraph (b) below) and such other
certificates, documents and other papers and information as the Issuing Lender
may reasonably request; provided that if the Issuing Lender informs the Company
that it is for any reason unable to open such Letter of Credit, the Company may
request any Lender to open such Letter of Credit upon the same terms offered to
the Issuing Lender and each reference to the Issuing Lender for purposes of
subsections 3.5 through 3.14, 6.1 and 6.2 shall be deemed to be a reference to
such issuing Lender.
(b) Each Standby L/C and Commercial L/C issued hereunder shall,
among other things, (i) be in such form requested by the Company as shall be
acceptable to the Issuing Lender in its sole discretion and (ii) in the case of
each Standby L/C, have an expiry date occurring not later than 365 days after
the date of issuance of such Standby L/C and, in the case of each Commercial
L/C, have an expiry date occurring not later than 180 days after the date of
issuance of such Commercial L/C and, in all cases, may be automatically renewed
on its expiry date for an additional period equal to the initial term, but in no
case shall any Letter of Credit have an expiry date occurring later than the
Revolving Credit Termination Date. Each L/C Application and each Letter of
Credit shall be subject to the Uniform Customs and, to the extent not
inconsistent therewith, the laws of the State of New York.
3.6 Participating Interests. Effective in the case of each Standby
L/C and Commercial L/C (if applicable) as of the date of the opening thereof,
the Issuing Lender agrees to allot and does allot, to itself and each other
Revolving Credit Lender, and each such Lender severally and irrevocably agrees
to take and does take in such Letter of Credit and the related L/C Application
(if applicable), an L/C Participating Interest in a percentage equal to such
Lender's Revolving Credit Commitment Percentage.
3.7 Procedure for Opening Letters of Credit. The Issuing Lender will
notify each Lender after the end of each calendar month of any L/C Applications
received by the Issuing Lender from the Company during such month. Upon receipt
of any L/C Application from the Company, the Issuing Lender will process such
L/C Application, and the other
27
certificates, documents and other papers delivered to the Issuing Lender in
connection therewith, in accordance with its customary procedures and, subject
to the terms and conditions hereof, shall promptly open such Letter of Credit by
issuing the original of such Letter of Credit to the beneficiary thereof and by
furnishing a copy thereof to the Company and, after the end of the calendar
month in which such Letter of Credit was opened, to the other Lenders, provided
that no such Letter of Credit shall be issued if subsection 3.1 would be
violated thereby.
3.8 Payments in Respect of Letters of Credit. (a) The Company agrees
forthwith upon demand by the Issuing Lender and otherwise in accordance with the
terms of the L/C Application relating thereto, (i) to reimburse the Issuing
Lender for any payment made by the Issuing Lender under any Letter of Credit
issued for the account of the Company and (ii) to pay interest on any
unreimbursed portion of any such payment from the date of such payment until
reimbursement in full thereof at a rate per annum equal to (A) on or prior to
the date which is one Business Day after the day on which the Issuing Lender
demands reimbursement from the Company for such payment, the Alternate Base Rate
plus the Applicable Margin for the Revolving Credit Loans and (B) thereafter,
the Alternate Base Rate plus the Applicable Margin for the Revolving Credit
Loans plus 2%.
(b) In the event that the Issuing Lender makes a payment under any
Letter of Credit and is not reimbursed in full therefor forthwith upon demand of
the Issuing Lender, and otherwise in accordance with the terms of the L/C
Application relating to such Letter of Credit, the Issuing Lender will promptly
notify each other Revolving Credit Lender. Forthwith upon its receipt of any
such notice, each such other Lender will transfer to the Issuing Lender, in
immediately available funds, an amount equal to such other Lender's pro rata
share (based on its Revolving Credit Commitment) of the L/C Obligation arising
from such unreimbursed payment. Promptly, upon its receipt from such other
Lender of such amount, the Issuing Lender will complete, execute and deliver to
such other Lender an L/C Participation Certificate dated the date of such
receipt and in such amount.
(c) Whenever, at any time after the Issuing Lender has made a
payment under any Letter of Credit and has received from any other Revolving
Credit Lender such other Lender's pro rata share of the L/C Obligation arising
therefrom, the Issuing Lender receives any reimbursement on account of such L/C
Obligation or any payment of interest on account thereof, the Issuing Lender
will promptly distribute to such other Lender its pro rata share thereof in like
funds as received; provided, however, that in the event that the receipt by the
Issuing Lender of such reimbursement or such payment of interest (as the case
may be) is required to be returned, such other Lender will return to the Issuing
Lender any portion thereof previously distributed by the Issuing Lender to it in
like funds as such reimbursement or payment is required to be returned by the
Issuing Lender.
3.9 Letter of Credit Fees. (a) In lieu of any letter of credit
commissions and fees provided for in any L/C Application relating to Standby or
Commercial L/Cs (other than standard issuance, amendment and negotiation fees),
the Company agrees to pay the Administrative Agent, for the account of the
Issuing Lender and the Participating Lenders,
28
with respect to each Standby or Commercial L/C issued for the account of the
Company, a Standby or Commercial L/C fee, as the case may be, equal to the
Applicable Margin for Revolving Credit Loans which are Eurodollar Loans per
annum (of which the Issuing Lender shall retain for its own account, as the
issuing bank and not on account of its L/C Participating Interest therein, 1/4
of 1% per annum) on the daily average amount available to be drawn under each
Standby L/C in the case of a Standby L/C and on the maximum fee amount of each
Commercial L/C in the case of a Commercial L/C, in either case, payable, in
arrears, on the last day of each fiscal quarter of the Company. The
Administrative Agent will disburse any Standby or Commercial L/C fees received
pursuant to this subsection 3.9(a) to the respective Lenders promptly following
the receipt of any such fees in the case of a Standby L/C and, in the case of a
Commercial L/C, following the end of the calendar month in which such Commercial
L/C fees were received. Notwithstanding the foregoing, the Company agrees to pay
standard issuance, amendment and negotiation fees to the Issuing Lender.
(b) For purposes of any payment of fees required pursuant to this
subsection 3.9, the Administrative Agent agrees to provide to the Company a
statement of any such fees to be so paid; provided that the failure by the
Administrative Agent to provide the Company with any such invoice shall not
relieve the Company of its obligation to pay such fees.
3.10 Letter of Credit Reserves. (a) If any Change in Law shall
either (i) impose, modify, deem or make applicable any reserve, special deposit,
assessment or similar requirement against letters of credit issued by the
Issuing Lender or (ii) impose on the Issuing Lender any other condition
regarding this Agreement (with respect to Letters of Credit) or any Letter of
Credit, and the result of any event referred to in clause (i) or (ii) above
shall be to increase the cost of the Issuing Lender of issuing or maintaining
any Letter of Credit (which increase in cost shall be the result of the Issuing
Lender's reasonable allocation of the aggregate of such cost increases resulting
from such events), then, upon demand by the Issuing Lender, the Company shall
immediately pay to the Issuing Lender, from time to time as specified by the
Issuing Lender, additional amounts which shall be sufficient to compensate the
Issuing Lender for such increased cost, together with interest on each such
amount from the date demanded until payment in full thereof at a rate per annum
equal to the rate applicable to Alternate Base Rate Loans pursuant to subsection
4.5(b). The Company shall not be required to make any payments to the Issuing
Lender for any additional amounts pursuant to this subsection 3.10(a) unless the
Issuing Lender has given written notice to the Company of its intent to request
such payments prior to or within 60 days after the date on which the Issuing
Lender became entitled to claim such amounts. A certificate, setting forth in
reasonable detail the calculation of the amounts involved, submitted by the
Issuing Lender to the Company concurrently with any such demand by the Issuing
Lender, shall be conclusive, absent manifest error, as to the amount thereof.
(b) In the event that any Change in Law with respect to the Issuing
Lender shall, in the opinion of the Issuing Lender, require that any obligation
under any Letter of Credit be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
the Issuing Lender or any corporation
29
controlling the Issuing Lender, and such Change in Law shall have the effect of
reducing the rate of return on the Issuing Lender's or such corporation's
capital, as the case may be, as a consequence of the Issuing Lender's
obligations under such Letter of Credit to a level below that which the Issuing
Lender or such corporation, as the case may be, could have achieved but for such
Change in Law (taking into account the Issuing Lender's or such corporation's
policies, as the case may be, with respect to capital adequacy) by an amount
deemed by the Issuing Lender to be material, then from time to time following
notice by the Issuing Lender to the Company of such Change in Law, within 15
days after demand by the Issuing Lender, the Company shall pay to the Issuing
Lender such additional amount or amounts as will compensate the Issuing Lender
or such corporation, as the case may be, for such reduction. The Issuing Lender
agrees that, upon the occurrence of any event giving rise to the operation of
paragraph (a) or (b) of this subsection 3.10 with respect to the Issuing Lender,
it will, if requested by the Company and to the extent permitted by law or by
the relevant Governmental Authority, endeavor in good faith to avoid or minimize
the increase in costs or reduction in payments resulting from such event;
provided, however, that such avoidance or minimization can be made in such a
manner that the Issuing Lender, in its sole determination, suffers no economic,
legal or regulatory disadvantage. The Company shall not be required to make any
payments to the Issuing Lender for any additional amounts pursuant to this
subsection 3.10(b) unless the Issuing Lender has given written notice to the
Company of its intent to request such payments prior to or within 60 days after
the date on which the Issuing Lender became entitled to claim such amounts. A
certificate, in reasonable detail setting forth the calculation of the amounts
involved, submitted by the Issuing Lender to the Company concurrently with any
such demand by the Issuing Lender, shall be conclusive, absent manifest error,
as to the amount thereof.
(c) The Company and each Participating Lender agree that the
provisions of the foregoing paragraphs (a) and (b) shall apply equally to each
Participating Lender in respect of its L/C Participating Interest in such Letter
of Credit, as if the references in such paragraphs and provisions referred to,
where applicable, such Participating Lender or, in the case of paragraph (b),
any corporation controlling such Participating Lender.
3.11 Further Assurances. The Company hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender more fully to effect the
purposes of this Agreement and the issuance of Letters of Credit hereunder.
3.12 Obligations Absolute. The payment obligations of the Company
under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(i) the existence of any claim, set-off, defense or other right
which the Company or any of its Subsidiaries may have at any time against
any beneficiary, or any transferee, of any Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), the Issuing Lender, the Administrative Agent or
30
any Lender, or any other Person, whether in connection with this
Agreement, any Credit Document, the transactions contemplated herein, or
any unrelated transaction;
(ii) any statement or any other document presented under any Letter
of Credit proving to be forged, fraudulent or invalid or any statement
therein being untrue or inaccurate in any respect;
(iii) payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or certificate or other document which
does not comply with the terms of such Letter of Credit or is insufficient
in any respect, except where such payment constitutes gross negligence or
willful misconduct on the part of the Issuing Lender; or
(iv) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing, except for any such circumstances or
happening constituting gross negligence or willful misconduct on the part
of the Issuing Lender.
3.13 Assignments. No Participating Lender's participation in any
Letter of Credit or any of its rights or duties hereunder shall be subdivided,
assigned or transferred (other than in connection with a transfer of part or all
of such Participating Lender's Revolving Credit Commitment in accordance with
subsection 11.6(c)) without the prior written consent of the Issuing Lender,
which consent will not be unreasonably withheld. Such consent may be given or
withheld without the consent or agreement of any other Participating Lender.
Notwithstanding the foregoing, a Participating Lender may subparticipate its L/C
Participating Interest without obtaining the prior written consent of the
Issuing Lender.
3.14 Participations. The obligation of each Revolving Credit Lender
to purchase participating interests pursuant to subsection 3.6 shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Issuing Lender, the Company or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of the Company; (iv) any breach of this Agreement by the Company or
any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS
4.1 Procedure for Borrowing. (a) The Company may borrow under the
Commitments on any Business Day, provided that, with respect to any borrowing,
the Company shall give the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent prior to 12:00 noon (or, with
respect to Swing Line Loans, 3:00 p.m.), New York City time, (i) three Business
Days prior to the requested Borrowing Date if all or any part of the Loans are
to be Eurodollar Loans and (ii) one
31
Business Day prior to the requested Borrowing Date (or, in the case of Swing
Line Loans and, if the Closing Date occurs on the date this Agreement is
executed and delivered, Loans made on the Closing Date, on the requested
Borrowing Date) if the borrowing is to be solely of Alternate Base Rate Loans)
and specifying (A) the amount of the borrowing, (B) whether such Loans are
initially to be Eurodollar Loans or Alternate Base Rate Loans or a combination
thereof, (C) if the borrowing is to be entirely or partly Eurodollar Loans, the
length of the Interest Period for such Eurodollar Loans and (D) whether the Loan
is a Term Loan, a Swing Line Loan or a Revolving Credit Loan; provided, however,
that the Loans made on the Closing Date shall be made initially as Alternate
Base Rate Loans. Upon receipt of such notice the Administrative Agent shall
promptly notify each Lender. Not later than 12:00 noon, New York City time, on
the Borrowing Date specified in such notice, each Lender shall make available to
the Administrative Agent at the office of the Administrative Agent specified in
subsection 11.2 (or at such other location as the Administrative Agent may
direct) an amount in immediately available funds equal to the amount of the Loan
to be made by such Lender (except that proceeds of Swing Line Loans will be made
available to the Company in accordance with subsection 3.4(a)). Loan proceeds
received by the Administrative Agent hereunder shall promptly be made available
to the Company by the Administrative Agent's crediting the account of the
Company, at the office of the Administrative Agent specified in subsection 11.2,
with the aggregate amount actually received by the Administrative Agent from the
Lenders and in like funds as received by the Administrative Agent.
(b) Any borrowing of Eurodollar Loans hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, (i) the aggregate principal amount of all Eurodollar Loans having the
same Interest Period shall not be less than $1,000,000 or a whole multiple of
$500,000 in excess thereof and (ii) no more than sixteen Interest Periods shall
be in effect at any one time.
4.2 Conversion and Continuation Options. (a) Subject to subsection
4.12, the Company may elect from time to time to convert Eurodollar Loans into
Alternate Base Rate Loans by giving the Administrative Agent irrevocable notice
of such election, to be received by the Administrative Agent prior to 12:00
noon, New York City time, at least three Business Days prior to the proposed
conversion date. The Company may elect from time to time to convert all or a
portion of the Alternate Base Rate Loans (other than Swing Line Loans) then
outstanding to Eurodollar Loans by giving the Administrative Agent irrevocable
notice of such election, to be received by the Administrative Agent prior to
12:00 noon, New York City time, at least three Business Days prior to the
proposed conversion date, specifying the Interest Period selected therefor, and,
if no Default or Event of Default has occurred and is continuing, such
conversion shall be made on the requested conversion date or, if such requested
conversion date is not a Business Day, on the next succeeding Business Day. Upon
receipt of any notice pursuant to this subsection 4.2, the Administrative Agent
shall promptly notify each Lender thereof. All or any part of the outstanding
Loans (other than Swing Line Loans) may be converted as provided herein,
provided that partial conversions of Alternate Base Loans shall be in the
aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof and the aggregate principal amount of the resulting Eurodollar
32
Loans outstanding in respect of any one Interest Period shall be at least
$1,000,000 or a whole multiple of $500,000 in excess thereof.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such (i) when any Event of
Default has occurred and is continuing and the Administrative Agent or the
Required Lenders have, by written notice to the Company, determined that such a
continuation is not appropriate, (ii) if, after giving effect thereto,
subsection 4.1(b) would be contravened or (iii) after the date that is one month
prior to the Revolving Credit Termination Date (in the case of continuations of
Revolving Credit Loans) or the date of the final installment of principal of the
Term Loans.
(c) Notwithstanding anything in this Agreement to the contrary,
unless otherwise agreed to by Chase, no Loan shall be made as, converted to or
continued as a Eurodollar Loan during the period commencing on the Closing Date
and ending on the 33rd day following the Closing Date; provided that all or a
portion of the Loans made on the Closing Date may, at the Company's option,
subject to the other provisions of this Agreement, be converted to Eurodollar
Loans with an Interest Period of one month on or after the third day following
the Closing Date.
4.3 Changes of Commitment Amounts. (a) The Company shall have the
right, upon not less than five Business Days' notice to the Administrative
Agent, to terminate or from time to time to permanently reduce the Revolving
Credit Commitments, subject to the provisions of this subsection 4.3. To the
extent, if any, that the sum of the amount of the Revolving Credit Loans, Swing
Line Loans and L/C Obligations then outstanding and the amounts available to be
drawn under outstanding Letters of Credit exceeds the amount of the Revolving
Credit Commitments as then reduced, the Company shall be required to make a
prepayment equal to such excess amount, the proceeds of which shall be applied
first, to payment of the Swing Line Loans then outstanding, second, to payment
of the Revolving Credit Loans then outstanding, third, to payment of any L/C
Obligations then outstanding, and fourth, to cash collateralize any outstanding
Letters of Credit on terms reasonably satisfactory to the Administrative Agent.
Any such termination of the Revolving Credit Commitments shall be accompanied by
prepayment in full of the Revolving Credit Loans, Swing Line Loans and L/C
Obligations then outstanding and by cash collateralization of any outstanding
Letters of Credit on terms reasonably satisfactory to the Administrative Agent.
Upon termination of the Revolving Credit Commitments, any Letter of Credit then
outstanding which has been so cash collateralized shall no longer be considered
a "Letter of Credit" as defined in subsection 1.1 and any L/C Participating
Interests heretofore granted by the Issuing Lender to the Lenders in such Letter
of Credit shall be deemed terminated (subject to automatic reinstatement in the
event that such cash collateral is returned and the Issuing Lender is not fully
reimbursed for any such L/C Obligations) but the Letter of Credit fees payable
under subsection 3.9 shall continue to accrue to the Issuing Lender and the
Participating Lenders
33
(or, in the event of any such automatic reinstatement, as provided in subsection
3.9) with respect to such Letter of Credit until the expiry thereof.
(b) In the case of termination of the Revolving Credit Commitments,
interest accrued on the amount of any prepayment relating thereto and any unpaid
commitment fee accrued hereunder shall be paid on the date of such termination.
Any such partial reduction of the Revolving Credit Commitments shall be in an
amount of $1,000,000, or a whole multiple of $500,000 in excess thereof, and
shall, in each case, reduce permanently the amount of the Revolving Credit
Commitments then in effect.
4.4 Optional and Mandatory Prepayments; Repayments of Term Loans.
(a) Subject to subsection 4.12, the Company may at any time and from time to
time prepay Loans, in whole or in part, without premium or penalty, by
irrevocable notice to the Administrative Agent by 10:00 a.m., New York City
time, on the same Business Day (or, in the case of Swing Line Loans, by
irrevocable notice to the Administrative Agent by 12:00 noon, New York City
time, on the same Business Day) in the case of Alternate Base Rate Loans, and
three Business Days' irrevocable notice to the Administrative Agent in the case
of Eurodollar Loans, specifying the date and amount of prepayment and whether
the prepayment is of Revolving Credit Loans or Term Loans. Upon receipt of such
notice the Administrative Agent shall promptly notify each Lender thereof. If
such notice is given, the Company shall make such prepayment, and the payment
amount specified in such notice shall be due and payable, on the date specified
therein. Partial prepayments (i) of Term Loans shall be in an aggregate
principal amount equal to the lesser of (A) $1,000,000, or a whole multiple of
$500,000 in excess thereof and (B) the aggregate unpaid principal amount of the
Term Loans, and (ii) of Revolving Credit Loans shall be in an aggregate
principal amount equal to the lesser of (A) $500,000 or a whole multiple of
$500,000 in excess thereof and (B) the aggregate unpaid principal amount of the
Revolving Credit Loans, as the case may be. Prepayments of the Term Loans
pursuant to this subsection 4.4(a) shall be applied to the remaining
installments thereof ratably according to the amounts of such installments.
(b) (i) If, subsequent to the Closing Date, Holdings, the Company or
any of its Subsidiaries shall issue any equity in a primary public offering, 50%
of the Net Proceeds thereof (excluding amounts provided by the Investors or
their Affiliates or by management employees of such issuer) shall be promptly
applied toward the prepayment of the Term Loans; provided, that Net Proceeds of
any public issuance of equity shall be deemed to be Net Proceeds of such
issuance for purposes of this subsection 4.4(b)(i) only after deducting
therefrom the redemption or repurchase or cancellation of the Preferred Stock of
the Company held by Holdings (and the concurrent redemption or repurchase by
Holdings of the Holdings Subordinated Debt) and the redemption of up to 35% of
the Permanent Subordinated Debt under the "equity clawback" provision and, in
each case, the payment of any premium or penalties or accrued interest or
dividends with respect thereto.
(ii) If, subsequent to the Closing Date, the Company or any of its
Subsidiaries shall incur or permit the incurrence of any Indebtedness (other
than Indebtedness permitted pursuant to subsection 8.1 except to the extent
provided in subsection 8.1(d)(ii))
34
100% of the Net Proceeds thereof shall be promptly applied toward the prepayment
of the Loans and reduction of the Commitments as set forth in clause (v) of this
subsection 4.4(b).
(iii) If, subsequent to the Closing Date, the Company or any of its
Subsidiaries shall receive Net Proceeds from any Asset Sale, such Net Proceeds
shall be promptly applied toward the prepayment of the Loans and reduction of
the Commitments as set forth in clause (v) of this subsection 4.4(b); provided
that such Net Proceeds need not be applied to the prepayment of the Loans and
the reduction of the Commitments until the earlier of the date that the
aggregate amount of Net Proceeds received by the Company or any of its
Subsidiaries from any Asset Sales exceeds $2,000,000 (and has not yet been
applied to the prepayment of the Loans and the reduction of the Commitments
hereunder) and the date which is six months after the last application of Net
Proceeds pursuant to this subsection 4.4(b)(iii).
(iv) So long as any Term Loans are outstanding, if for any fiscal
year, commencing with its fiscal year ending December 31, 1997, there shall be
Excess Cash Flow for such fiscal year, (x) for the fiscal year ending December
31, 1997, 75% of such Excess Cash Flow and (y) for each such fiscal year after
the fiscal year ending December 31, 1997, a percentage of such Excess Cash Flow
for such fiscal year equal to the Applicable Cash Flow Percentage for such
fiscal year shall be applied toward prepayment of the Term Loans (applied to the
remaining installments thereof ratably according to the outstanding principal
amounts thereof until paid in full). Each such prepayment shall be made not
later than 120 days after the end of such fiscal year.
(v) Prepayments made pursuant to subsections 4.4(b)(i), (ii) and
(iii), and, only to the extent set forth therein, subsection 8.1(d) shall be
applied by the Company, first, to the prepayment of the Term Loans (applied to
the remaining installments thereof ratably according to the outstanding
principal amounts thereof until paid in full) and, second, to reduce permanently
the Revolving Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of, first, the Swing Line Loans,
second, the Revolving Credit Loans and, third, the L/C Obligations to the
extent, if any, that the sum of the aggregate outstanding principal amount of
Revolving Credit Loans, the aggregate outstanding principal amount of all Swing
Line Loans, the aggregate amount available to be drawn under all outstanding
Letters of Credit and the aggregate outstanding amount of all L/C Obligations,
in each case of all Lenders, exceeds the amount of the aggregate Revolving
Credit Commitments as so reduced, provided that if the aggregate principal
amount of Revolving Credit Loans, Swing Line Loans and L/C Obligations then
outstanding is less than the amount of such excess (because Letters of Credit
constitute a portion thereof), the Company shall, to the extent of the balance
of such excess, replace outstanding Letters of Credit and/or deposit an amount
in cash in a cash collateral account established for the benefit of the Lenders.
(vi) The Company shall give the Administrative Agent (which shall
promptly notify each Lender) at least one Business Day's notice of each
prepayment or mandatory reduction pursuant to this subsection 4.4(b) setting
forth the date and amount
35
thereof. Except as otherwise may be agreed by the Company and the Required
Lenders, and subject to Subsection 4.4(b)(v), any prepayment of Loans pursuant
to this subsection 4.4 shall be applied, first, to any Alternate Base Rate Loans
then outstanding and the balance of such prepayment, if any, to the Eurodollar
Loans then outstanding; provided that prepayments of Eurodollar Loans, if not on
the last day of the Interest Period with respect thereto, shall, at the
Company's option, be prepaid subject to the provisions of subsection 4.12 or the
amount of such prepayment (after application to any Alternate Base Rate Loans)
shall be deposited with the Administrative Agent as cash collateral for the
Loans on terms reasonably satisfactory to the Administrative Agent and
thereafter shall be applied in the order of the Interest Periods next ending
most closely to the date such prepayment is required to be made and on the last
day of each such Interest Period. After such application, unless an Event of
Default shall have occurred and be continuing, any remaining interest earned on
such cash collateral shall be paid to the Company.
(c) The Term Loans shall be repaid in 14 consecutive semi-annual
installments, in each case on the dates set forth below (each such day, an
"Installment Payment Date"), in each case, commencing on June 30, 1997, in an
aggregate amount with respect to the Term Loans equal to the amount specified
for each such Installment Payment Date.
Installment Payment Date Installment Amount
------------------------ ------------------
June 30, 1997 $ 500,000
December 31, 1997 $ 500,000
June 30, 1998 $ 500,000
December 31, 1998 $ 500,000
June 30, 1999 $ 500,000
December 31, 1999 $ 500,000
June 30, 2000 $ 500,000
December 31, 2000 $ 500,000
June 30, 2001 $ 3,000,000
December 31, 2001 $ 3,000,000
June 30, 2002 $ 7,500,000
December 31, 2002 $ 7,500,000
June 30, 2003 $12,500,000
October 31, 2003 $12,500,000
Amounts repaid on account of the Term Loans pursuant to this subsection 4.4 or
otherwise may not be reborrowed. Accrued interest on the amount of any
prepayments shall be paid on
36
the Interest Payment Date next succeeding the date of any partial prepayment and
on the date on such prepayment in the case of a prepayment in full of any Loans.
4.5 Interest Rates and Payment Dates. (a) Eurodollar Loans shall
bear interest for each day during each Interest Period applicable thereto,
commencing on (and including) the first day of such Interest Period to, but
excluding, the last day of such Interest Period, on the unpaid principal amount
thereof at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
(b) Alternate Base Rate Loans shall bear interest for the period
from and including the date such Loans are made to, but excluding, the maturity
date thereof, or to, but excluding, the conversion date if such Loans are
earlier converted into Eurodollar Loans on the unpaid principal amount thereof
at a rate per annum equal to the Alternate Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any of the
Loans or (ii) any interest payable thereon shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise) such Loan, if a Eurodollar
Loan, shall be converted into an Alternate Base Rate Loan at the end of the
then-current Interest Period for said Eurodollar Loan (which conversion shall
occur automatically and without need for compliance with the conditions for
conversion set forth in subsection 4.2), and any such overdue amount shall,
without limiting the rights of the Lenders under Section 9, bear interest (which
shall be payable on demand) at a rate per annum which is 2% plus the Alternate
Base Rate plus the Applicable Margin (or, in the case of a Eurodollar Loan, the
Eurodollar Rate for the Interest Period plus the Applicable Margin plus 2%, if
higher) from the date of such non-payment until paid in full (as well after as
before judgment).
(d) Except as otherwise expressly provided for in this subsection
4.5, interest shall be payable in arrears on each Interest Payment Date.
4.6 Computation of Interest and Fees. (a) Interest in respect of
Alternate Base Rate Loans, at any time that the Alternate Base Rate is
determined by reference to the Prime Rate, and all fees hereunder shall be
calculated on the basis of a 365 (or 366 as the case may be) day year for the
actual days elapsed. Interest in respect of Eurodollar Loans and in respect of
Alternate Base Rate Loans, at any time that the Alternate Base Rate is
determined by reference to the Base CD Rate or the Federal Funds Effective Rate,
shall be calculated on the basis of a 360 day year for the actual days elapsed.
The Administrative Agent shall as soon as practicable notify the Company and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change in the Alternate Base Rate is announced
or such change in the Eurocurrency Reserve Requirements becomes effective, as
the case may be. The Administrative Agent shall as soon as practicable notify
the Company and the Lenders of the effective date and the amount of each such
change.
37
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Company and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Company or any Lender, deliver
to the Company or such Lender a statement showing the quotations used by the
Administrative Agent in determining the Eurodollar Rate.
4.7 Certain Fees. The Company agrees to pay to the Administrative
Agent, for its own account, a non-refundable agent's fee in an amount previously
agreed to with the Administrative Agent, payable in advance on the Closing Date
and on the first day of each fiscal quarter of the Company thereafter.
4.8 Inability to Determine Interest Rate. In the event that the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that (a) by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period with respect
to (i) proposed Loans that the Company has requested be made as Eurodollar
Loans, (ii) any Eurodollar Loans that will result from the requested conversion
of all or part of the Alternate Base Rate Loans into Eurodollar Loans or (iii)
the continuation of any Eurodollar Loan as such for an additional Interest
Period, or (b) dollar deposits in the relevant amount and for the relevant
period with respect to any such Eurodollar Loan are not generally available to
the Lenders in their respective Eurodollar Lending Offices' interbank eurodollar
markets, the Administrative Agent shall forthwith give telecopy notice of such
determination, confirmed in writing, to the Company and the Lenders at least one
day prior to, as the case may be, the requested Borrowing Date, the conversion
date or the last day of such Interest Period. If such notice is given (i) any
requested Eurodollar Loans shall be made as Alternate Base Rate Loans, (ii) any
Alternate Base Rate Loans that were to have been converted to Eurodollar Loans
shall be continued as Alternate Base Rate Loans, and (iii) any outstanding
Eurodollar Loans shall be converted, on the last day of the then current
Interest Period applicable thereto, into Alternate Base Rate Loans. Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made and no Alternate Base Rate Loans shall be converted to
Eurodollar Loans.
4.9 Pro Rata Treatment and Payments. (a) Except to the extent
otherwise provided herein, each borrowing of Loans by the Company from the
Lenders and any reduction of the Commitments of the Lenders hereunder shall be
made pro rata according to the relevant Commitment Percentages of the Lenders
with respect to the Loans borrowed or the Commitments to be reduced.
(b) Whenever any payment received by the Administrative Agent under
this Agreement or any Note or any other Credit Document is insufficient to pay
in full all amounts then due and payable to the Administrative Agent and the
Lenders under this Agreement:
(i) If the Administrative Agent has not received a Payment Sharing
Notice (or, if the Administrative Agent has received a Payment Sharing
Notice but the Event
38
of Default specified in such Payment Sharing Notice has been cured or
waived in accordance with the provisions of this Agreement), such payment
shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the following order: First, to the
payment of fees and expenses due and payable to the Administrative Agent
under and in connection with this Agreement and the other Credit
Documents; Second, to the payment of all expenses due and payable under
subsection 11.5, ratably among the Lenders in accordance with the
aggregate amount of such payments owed to each such Lender; Third, to the
payment of fees due and payable under subsections 3.2 and 3.9, ratably
among the Lenders in accordance with the Commitment Percentage of each
Lender of the Commitment for which such payment is owed and, in the case
of the Issuing Lender, the amount retained by the Issuing Lender for its
own account pursuant to subsection 3.9; Fourth, to the payment of interest
then due and payable on the Loans and on the L/C Obligations, ratably in
accordance with the aggregate amount of interest owed to each such Lender;
and Fifth, to the payment of the principal amount of the Loans and the L/C
Obligations which is then due and payable, ratably among the Lenders in
accordance with the aggregate principal amount owed to each such Lender;
or
(ii) If the Administrative Agent has received a Payment Sharing
Notice which remains in effect, all payments received by the
Administrative Agent under this Agreement or any Note shall be distributed
by the Administrative Agent and applied by the Administrative Agent and
the Lenders in the following order: First, to the payment of all amounts
described in clauses "First" through "Third" of the foregoing clause (i),
in the order set forth therein; Second, to the payment of the interest
accrued on all Loans and L/C Obligations, regardless of whether any such
amount is then due and payable, ratably among the Lenders in accordance
with the aggregate accrued interest plus the aggregate principal amount of
all Loans and L/C Obligations then due and payable and owed to such
Lender; and Third, to the payment of the principal amount of all Loans and
L/C Obligations, regardless of whether any such amount is then due and
payable, ratably among the Lenders in accordance with the aggregate
principal amount owed to such Lender.
(c) If any Lender (a "Non-Funding Lender") has (x) failed to make a
Revolving Credit Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make such
Revolving Credit Loan or (y) given notice to the Company or the Administrative
Agent that it will not make, or that it has disaffirmed or repudiated any
obligation to make, any Revolving Credit Loan, in each case by reason of the
provisions of the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended, or otherwise, (i) any payment made on account of the principal
of the Revolving Credit Loans outstanding shall be made as follows:
(A) in the case of any such payment made on any date when and to the
extent that, in the determination of the Administrative Agent, the Company
would be able, under the terms and conditions hereof, to reborrow the
amount of such payment under the Commitments and to satisfy any applicable
conditions precedent set forth in
39
Section 6 to such reborrowing, such payment shall be made on account of
the outstanding Revolving Credit Loans held by the Lenders other than the
Non-Funding Lender pro rata according to the respective outstanding
principal amounts of the Revolving Credit Loans of such Lenders; and
(B) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Lenders pro rata according
to the respective outstanding principal amounts of such Revolving Credit
Loans; and
(ii) any payment made on account of interest on the Revolving Credit Loans shall
be made pro rata according to the respective amounts of accrued and unpaid
interest due and payable on the Revolving Credit Loans with respect to which
such payment is being made. The Company agrees to give the Administrative Agent
such assistance in making any determination pursuant to subparagraph (i)(A) of
this paragraph as the Administrative Agent may reasonably request. Any such
determination by the Administrative Agent shall be conclusive and binding on the
Lenders.
(d) All payments (including prepayments) to be made by the Company
on account of principal, interest and fees shall be made without set-off or
counterclaim and shall be made to the Administrative Agent, for the account of
the Lenders at the Administrative Agent's office located at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, in lawful money of the United States and in immediately
available funds. The Administrative Agent shall promptly distribute such
payments in accordance with the provisions of subsection 4.9(b) promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on Eurodollar Loans) would become due and payable on a day other than a Business
Day, such payment shall become due and payable on the next succeeding Business
Day and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day (and with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension), unless the result of such extension
would be to extend such payment into another calendar month in which event such
payment shall be made on the immediately preceding Business Day.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount which would constitute its Commitment Percentage of such borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent in
accordance with subsection 4.1 and the Administrative Agent may, in reliance
upon such assumption, make available to the Company a corresponding amount. If
such amount is not made available to the Administrative Agent by the required
time on the Borrowing Date therefor, such Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
40
Administrative Agent submitted to any Lender with respect to any amounts owing
under this subsection 4.9(e) shall be conclusive, absent manifest error. If such
Lender's Commitment Percentage of such borrowing is not in fact made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Alternate Base
Rate Loans hereunder, on demand, from the Company, without prejudice to any
rights which the Company or the Administrative Agent may have against such
Lender hereunder. Nothing contained in this subsection 4.9 shall relieve any
Lender which has failed to make available its ratable portion of any borrowing
hereunder from its obligation to do so in accordance with the terms hereof.
(f) The failure of any Lender to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on such Borrowing Date.
(g) All payments and optional prepayments (other than prepayments as
set forth in subsection 4.11 with respect to increased costs) of Eurodollar
Loans hereunder shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Loans with the same Interest Period shall not be less than $1,000,000
or a whole multiple of $500,000 in excess thereof.
4.10 Illegality. Notwithstanding any other provision herein, if any
Change in Law occurring after the date that any lender becomes a Lender party to
this Agreement, shall make it unlawful for such Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, the commitment of such
Lender hereunder to make Eurodollar Loans or to convert all or a portion of
Alternate Base Rate Loans into Eurodollar Loans shall forthwith be suspended
until such time, if any, as such illegality shall no longer exist and such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Alternate Base Rate Loans for the duration of the respective
Interest Periods (or, if permitted by applicable law, at the end of such
Interest Periods) and all payments of principal which would otherwise be applied
to such Eurodollar Loans shall be applied instead to such Lender's Alternate
Base Rate Loans. The Company hereby agrees to pay any Lender, promptly upon its
demand, any amounts payable pursuant to subsection 4.12 in connection with any
conversion in accordance with this subsection 4.10 (such Lender's notice of such
costs, as certified in reasonable detail as to such amounts to the Company
through the Administrative Agent, to be conclusive absent manifest error).
4.11 Requirements of Law. (a) In the event that any Change in Law or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority
occurring after the date that any lender becomes a Lender party to this
Agreement:
(i) does or shall subject any such Lender or its Eurodollar Lending
Office to any tax of any kind whatsoever with respect to this Agreement,
any Note or any
41
Eurodollar Loans made by it, or change the basis of taxation of payments
to such Lender or its Eurodollar Lending Office of principal, the
commitment fee, interest or any other amount payable hereunder (except for
(x) net income and franchise taxes imposed on the net income of such
Lender or its Eurodollar Lending Office by the jurisdiction under the laws
of which such Lender is organized or any political subdivision or taxing
authority thereof or therein, or by any jurisdiction in which such
Lender's Eurodollar Lending Office is located or any political subdivision
or taxing authority thereof or therein, including changes in the rate of
tax on the overall net income of such Lender or such Eurodollar Lending
Office, and (y) taxes resulting from the substitution of any such system
by another system of taxation, provided that the taxes payable by Lenders
subject to such other system of taxation are not generally charged to
borrowers from such Lenders having loans or advances bearing interest at a
rate similar to the Eurodollar Rate);
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender which are not otherwise
included in the determination of the Eurodollar Rate; or
(iii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender or
its Eurodollar Lending Office of making, converting, renewing or maintaining
advances or extensions of credit or to reduce any amount receivable hereunder,
in each case, in respect of its Eurodollar Loans, then, in any such case, the
Company shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such additional cost or reduced amount
receivable which such Lender deems to be material as determined by such Lender
with respect to such Eurodollar Loans, together with interest on each such
amount from the date demanded until payment in full thereof at a rate per annum
equal to the Alternate Base Rate plus 1%.
(b) In the event that any Change in Law occurring after the date
that any lender becomes a Lender party to this Agreement with respect to any
such Lender shall, in the opinion of such Lender, require that any Commitment of
such Lender be treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by such Lender or
any corporation controlling such Lender, and such Change in Law shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital, as the case may be, as a consequence of such Lender's obligations
hereunder to a level below that which such Lender or such corporation, as the
case may be, could have achieved but for such Change in Law (taking into account
such Lender's or such corporation's policies, as the case may be, with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time following notice by such Lender to the Company of such Change
in Law as provided in paragraph (c) of this subsection 4.11, within 15 days
after demand by such Lender, the Company shall pay to such
42
Lender such additional amount or amounts as will compensate such Lender or such
corporation, as the case may be, for such reduction.
(c) The Company shall not be required to make any payments to any
Lender for any additional amounts pursuant to this subsection 4.11 unless such
Lender has given written notice to the Company, through the Administrative
Agent, of its intent to request such payments prior to or within 60 days after
the date on which such Lender became entitled to claim such amounts. If any
Lender has notified the Company through the Administrative Agent of any
increased costs pursuant to paragraph (a) of this subsection 4.11, the Company
at any time thereafter may, upon at least three Business Days' notice to the
Administrative Agent (which shall promptly notify the Lenders thereof), and
subject to subsection 4.12, prepay (or convert into Alternate Base Rate Loans)
all (but not a part) of the Eurodollar Loans then outstanding. Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
paragraph (a) of this subsection 4.11 with respect to such Lender, it will, if
requested by the Company and to the extent permitted by law or by the relevant
Governmental Authority, endeavor in good faith to avoid or minimize the increase
in costs or reduction in payments resulting from such event (including, without
limitation, endeavoring to change its Eurodollar Lending Office); provided,
however, that such avoidance or minimization can be made in such a manner that
such Lender, in its sole determination, suffers no economic, legal or regulatory
disadvantage. If any Lender requests compensation from the Company under this
subsection 4.11, the Company may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender thereafter to make
or continue Loans of the Type with respect to which such compensation is
requested, or to convert Loans of any other Type into Loans of such Type, until
the Requirement of Law giving rise to such request ceases to be in effect,
provided that such suspension shall not affect the right of such Lender to
receive the compensation so requested.
(d) Each Lender (and in case of an Assignee on the date it becomes a
Lender) that is not a United States Person (as defined in Section 7701(a)(30) of
the Code) for federal income tax purposes either (1) in the case of a Lender
that is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (i)
represents to the Company (for the benefit of the Company and the Administrative
Agent) that under applicable law and treaties no taxes are required to be
withheld by the Company or the Administrative Agent with respect to any payments
to be made to such Lender in respect of the Loans or the L/C Participating
Interests, (ii) agrees to furnish to the Company, with a copy to the
Administrative Agent, either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such Lender claims entitlement to
complete exemption from U.S. federal withholding tax on all interest payments
hereunder) and (iii) agrees (for the benefit of the Company and the
Administrative Agent), to the extent it may lawfully do so at such times, to
provide the Company, with a copy to the Administrative Agent, a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any previously delivered form
and comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by such Lender, and to
comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption or (2) in the case of a Lender that is
not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (i)
represents to the
43
Company (for the benefit of the Company and the Administrative Agent) that it is
not a bank within the meaning of Section 881(c)(3)(A) of the Code, (ii) agrees
to furnish to the Company, with a copy to the Administrative Agent, (A) a
certificate substantially in the form of Exhibit J hereto (any such certificate,
a "Subsection 4.11(d)(2) Certificate") and (B) two accurate and complete
original signed copies of Internal Revenue Service Form W-8, certifying to such
Lender's legal entitlement at the Closing Date to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the Code with respect
to all payments to be made under this Agreement, and (iii) agrees, to the extent
legally entitled to do so, upon reasonable request by the Company, to provide to
the Company (for the benefit of the Company and the Administrative Agent) such
other forms as may be required in order to establish the legal entitlement of
such Lender to an exemption from withholding with respect to payments under this
Agreement. Notwithstanding any provision of this subsection 4.11 to the
contrary, the Company shall have no obligation to pay any amount to or for the
account of any Lender (or the Eurodollar Lending Office of any Lender) on
account of any taxes pursuant to this subsection 4.11, to the extent that such
amount results from (i) the failure of any Lender to comply with its obligations
pursuant to this subsection 4.11, (ii) any representation or warranty made or
deemed to be made by any Lender pursuant to this subsection 4.11(d) proving to
have been incorrect, false or misleading in any material respect when so made or
deemed to be made or (iii) any Change in Law or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority, the effect of which would be to
subject to any taxes any payment made pursuant to this Agreement to any Lender
making the representation and covenants set forth in subsection 4.11(d)(2),
which payment would not be subject to such taxes were such Lender eligible to
make and comply with, and actually made and complied with, the representation
and covenants set forth in subsection 4.11(d)(1) hereinabove.
(e) A certificate in reasonable detail as to any amounts submitted
by such Lender, through the Administrative Agent, to the Company, shall be
conclusive in the absence of manifest error. The covenants contained in this
subsection 4.11 shall survive the termination of this Agreement and repayment of
the Loans.
4.12 Indemnity. The Company agrees to indemnify each Lender and to
hold such Lender harmless from any loss or expense (but without duplication of
any amounts payable as default interest) which such Lender may sustain or incur
as a consequence of (a) default by the Company in payment of the principal
amount of or interest on any Eurodollar Loans of such Lender, including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to make or maintain its
Eurodollar Loans hereunder, (b) default by the Company in making a borrowing
after the Company has given a notice in accordance with subsection 4.1 or in
making a conversion of Alternate Base Rate Loans to Eurodollar Loans or in
continuing Eurodollar Loans as such, in either case, after the Company has given
notice in accordance with subsection 4.2, (c) default by the Company in making
any prepayment after the Company has given a notice in accordance with
subsection 4.4 or (d) a payment or prepayment of a Eurodollar Loan or conversion
(including without limitation, as a result of subsection 4.4 and/or a conversion
pursuant to subsection 4.10) of any Eurodollar Loan into an Alternate
44
Base Rate Loan, in either case on a day which is not the last day of an Interest
Period with respect thereto, including, but not limited to, any such loss or
expense arising from interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain its Eurodollar Loans hereunder (but
excluding loss of profit). This covenant shall survive termination of this
Agreement and repayment of the Loans.
4.13 Repayment of Loans; Evidence of Debt. (a) The Company hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the then unpaid principal amount of each Revolving Credit Loan
of such Lender on the Revolving Credit Termination Date, (ii) the principal
amount of the Term Loan of such Lender, in 14 consecutive installments, payable
on each Installment Payment Date (or the then unpaid principal amount of such
Term Loan, on the date that the Term Loans become due and payable pursuant to
Section 9), and (iii) the then unpaid principal amount of the Swing Line Loans
of the Swing Line Lender on the Revolving Credit Termination Date. The Company
hereby further agrees to pay interest on the unpaid principal amount of the
Loans from time to time outstanding from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in subsection 4.5.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Company to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan and Term Loan made
hereunder, the Type thereof and each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from the Company to each Lender hereunder and (iii) both the amount of
any sum received by the Administrative Agent hereunder from the Company and each
Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 4.13(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that the failure
of any Lender or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Company to repay (with applicable interest) the Loans made to such Company
by such Lender or to repay any other obligations in accordance with the terms of
this Agreement.
(e) The Company agrees that, upon the request to the Administrative
Agent by any Lender, the Company will execute and deliver to such Lender (i) a
promissory note of the Company evidencing the Revolving Credit Loans of such
Lender, substantially in the form of Exhibit A with appropriate insertions as to
date and principal amount (a "Revolving Credit Note"), and/or (ii) a promissory
note of the Company evidencing the Term Loan of such
45
Lender, substantially in the form of Exhibit B with appropriate insertions as to
date and principal amount (a "Term Loan Note"), and/or (iii) in the case of the
Swing Line Lender, a promissory note of the Company evidencing the Swing Line
Loans of the Swing Line Lender, substantially in the form of Exhibit C with
appropriate insertions as to date and principal amount (the "Swing Line Note").
4.14 Replacement of Lenders. In the event any Lender or the Issuing
Lender exercises its rights pursuant to subsection 4.10 or requests payments
pursuant to subsections 3.10 or 4.11, the Company may require, at the Company's
expense (including payment of any processing fees under subsection 11.6(e)) and
subject to subsection 4.12, such Lender or the Issuing Lender to assign, at par
plus accrued interest and fees, without recourse (in accordance with subsection
11.6) all of its interests, rights and obligations hereunder (including all of
its Commitments and the Loans and other amounts at the time owing to it
hereunder and its Notes and its interest in the Letters of Credit) to a bank,
financial institution or other entity specified by the Company, provided that
(i) such assignment shall not conflict with or violate any law, rule or
regulation or order of any court or other Governmental Authority, (ii) the
Company shall have received the written consent of the Administrative Agent,
which consent shall not unreasonably be withheld, to such assignment, (iii) the
Company shall have paid to the assigning Lender or the Issuing Lender all monies
other than principal, interest and fees accrued and owing hereunder to it
(including pursuant to subsections 3.10, 4.10, 4.11 and 4.12) and (iv) in the
case of a required assignment by the Issuing Lender, the Letters of Credit shall
be canceled and returned to the Issuing Lender.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans and to induce the Issuing Lender to issue, and the Participating
Lenders to participate in, the Letters of Credit, the Company hereby represents
and warrants to each Lender and the Administrative Agent, as of the Closing Date
and as of the making of any extension of credit hereunder:
5.1 Financial Condition. (a) The consolidated audited balance sheets
of the Company and its consolidated Subsidiaries as at January 1, 1994, December
31, 1994 and December 30, 1995 and the related consolidated statements of
operations and of cash flows for the fiscal year ended on each such date,
audited by Price Waterhouse LLP, copies of which have heretofore been furnished
to each Lender, present fairly in accordance with GAAP the consolidated
financial condition of the Company and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their consolidated
cash flows for the fiscal year then ended. All such financial statements have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants and as disclosed
therein). Neither the Company nor any of its consolidated Subsidiaries had, at
the date of each balance sheet referred to above, any material Contingent
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
material interest rate or
46
foreign currency swap or exchange transaction, which is not reflected in the
foregoing statements or in the notes thereto or expressly permitted to be
incurred hereunder.
(b) The unaudited consolidated balance sheet of the Company and its
consolidated Subsidiaries as at September 28, 1996, certified by a Responsible
Officer of the Company, copies of which have heretofore been furnished to each
Lender, present fairly in accordance with GAAP the financial position of the
Company and its consolidated Subsidiaries as at such dates. Such balance sheets,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP (except as approved by such Responsible Officer and
disclosed therein). The Company and its consolidated Subsidiaries did not have
at the dates of such balance sheets, any material Contingent Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency exchange transaction, which is not reflected in such
balance sheets or in the notes thereto. During the period from December 31, 1995
to the Closing Date, except as set forth in Schedule 5.1(b), no dividends or
other distributions have been declared, paid or made upon the Capital Stock of
the Company or any of its consolidated Subsidiaries nor has any of the Capital
Stock of the Company or any of its consolidated Subsidiaries been redeemed,
retired, purchased or otherwise acquired for value by the Company or any of its
consolidated Subsidiaries, respectively.
(c) The unaudited consolidated pro forma balance sheets of (i)
Holdings, (ii) AcquisitionCo and (iii) the Company and its consolidated
Subsidiaries, in each case, as of September 28, 1996, certified by a Responsible
Officer of Holdings, AcquisitionCo and the Company, respectively (the "Pro Forma
Balance Sheets"), copies of which have been furnished to each Lender, are the
unaudited balance sheets of Holdings, AcquisitionCo and the Company and its
consolidated Subsidiaries, respectively, adjusted in each case to give effect
(as if such events had occurred on such date) to (i) the Merger and each of the
transactions contemplated by the Merger Agreement, (ii) the incurrence of the
Loans and the issuance of the Letters of Credit to be incurred or issued, as the
case may be, on the Closing Date and (iv) the incurrence of the Bridge
Subordinated Debt and all other Indebtedness that the Company and its
consolidated Subsidiaries expect to incur, and the payment of all amounts the
Company and its consolidated Subsidiaries expect to pay, in connection with the
Merger. The Pro Forma Balance Sheets, together with the notes thereto, were
prepared based on good faith assumptions in accordance with GAAP and are based
on the best information available to Holdings, AcquisitionCo and the Company,
respectively, as of the date of delivery thereof, and reflect on a pro forma
basis the financial position of Holdings, AcquisitionCo and the Company and its
consolidated Subsidiaries, respectively, as of September 30, 1996, as adjusted,
as described above, assuming that the events specified in the preceding sentence
had actually occurred as of September 30, 1996.
5.2 No Change. Since December 31, 1995, (a) there has been no
change, and (as of the Closing Date only) no development or event which has had
or could reasonably be expected to have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole and
47
(b) no dividends or other distributions have been declared, paid or made upon
the Capital Stock of the Company nor has any of the Capital Stock of the Company
been redeemed, retired, repurchased or otherwise acquired for value by the
Company or any of its Subsidiaries, except as permitted by subsection 8.11 and
as set forth in Schedule 5.1(b).
5.3 Corporate Existence; Compliance with Law. Each of the Company
and its Subsidiaries (a) is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation, (b) has full corporate
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to use its
corporate name and to own, lease or otherwise hold its properties and assets and
to carry on its business as presently conducted other than such franchises,
licenses, permits, authorizations and approvals the lack of which, individually
or in the aggregate, would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, (c) is duly qualified and in
good standing to do business in each jurisdiction in which the nature of its
business or the ownership, leasing or holding of its properties makes such
qualification necessary, except such jurisdictions where the failure so to
qualify would not have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries, taken as a whole, and (d) except as disclosed in the Phase I
Environmental Assessments is in compliance with all applicable statutes, laws,
ordinances, rules, orders, permits and regulations of any governmental authority
or instrumentality, domestic or foreign (including, without limitation, those
related to Hazardous Materials and substances), except where noncompliance would
not have a material adverse effect on the business, assets, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries,
taken as a whole. Except as disclosed in the Phase I Environmental Assessments,
neither the Company nor any of its Subsidiaries has received any written
communication from a Governmental Authority that alleges that the Company or any
of its Subsidiaries is not in compliance, in all material respects, with all
material federal, state, local or foreign laws, ordinances, rules and
regulations.
5.4 Corporate Power; Authorization. Each of the Company and its
Subsidiaries has the corporate power and authority to make, deliver and perform
each of the Credit Documents to which it is a party, and the Company has the
corporate power and authority and legal right to borrow hereunder and to have
Letters of Credit issued for its account hereunder. Each of the Company and its
Subsidiaries has taken all necessary corporate action to authorize the
execution, delivery and performance of each of the Credit Documents to which it
is or will be a party and the Company has taken all necessary corporate action
to authorize the borrowings hereunder and the issuance of Letters of Credit for
its account hereunder. No consent or authorization of, or filing with, any
Person (including, without limitation, any Governmental Authority) is required
in connection with the execution, delivery or performance by the Company or any
of its Subsidiaries, or for the validity or enforceability against the Company
or any of its Subsidiaries, of any Credit Document except for consents,
authorizations and filings which have been obtained or made and are in full
force and effect and except (i) such consents, authorizations and filings, the
failure to obtain or perform (x) which would not have a material adverse effect
on the
48
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole and (y) which would not
adversely affect the validity or enforceability of any of the Credit Documents
or the rights or remedies of the Administrative Agent or the Lenders thereunder,
and (ii) such filings as are necessary to perfect the Liens of the Lenders
created pursuant to this Agreement and the Security Documents.
5.5 Enforceable Obligations. This Agreement and the Merger Agreement
have been, and each of the other Credit Documents and any other agreement to be
entered into by any Credit Party pursuant to the Merger Agreement will be duly
executed and delivered on behalf of such Credit Party that is party thereto. The
Merger Agreement has been duly executed and delivered (a) to the best knowledge
of AcquisitionCo, on behalf of Carter's and (b) on behalf of AcquisitionCo. This
Agreement and the Merger Agreement each constitutes, and each of the other
Credit Documents and any other agreement to be entered into by any Credit Party
pursuant to the Merger Agreement will constitute upon execution and delivery,
the legal, valid and binding obligation of such Credit Party, and is enforceable
against such Credit Party in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium, or similar
laws affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law). The Merger Agreement constitutes the legal, valid and binding obligation
of (a) to the best knowledge of AcquisitionCo, Carter's enforceable against
Carter's in accordance with its terms and (b) AcquisitionCo enforceable against
such Person in accordance with its terms, except, in each case, as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
5.6 No Legal Bar. The execution, delivery and performance of each
Credit Document, the incurrence or issuance of and use of the proceeds of the
Loans, the Bridge Subordinated Debt, any Permanent Subordinated Debt and of
drawings under the Letters of Credit and the transactions contemplated by the
Merger Agreement, the Credit Documents and the Bridge Subordinated Debt
Documents, (a) will not violate any Requirement of Law or any Contractual
Obligation applicable to or binding upon each of Holdings, AcquisitionCo and the
Company or any Subsidiary of the Company or any of their respective properties
or assets, in any manner which, individually or in the aggregate, (i) would have
a material adverse effect on the ability of Holdings, AcquisitionCo, the Company
or any such Subsidiary to perform its obligations under the Credit Documents,
the Merger Agreement, and any other agreement to be entered into pursuant to the
Merger Agreement, to which it is a party, (ii) would give rise to any liability
on the part of the Administrative Agent or any Lender, or (iii) would have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, and (b) will not result in the creation or imposition of any Lien on
any of its properties or assets pursuant to any Requirement of Law applicable to
it, as the case may be, or any of its Contractual Obligations, except for the
Liens arising under the Security Documents.
49
5.7 No Material Litigation. No litigation by, investigation known to
the Company by, or proceeding of, any Governmental Authority is pending against
the Company or any of its Subsidiaries (including after giving effect to the
Merger) with respect to the validity, binding effect or enforceability of any
Merger Document, any Credit Document, the Loans made hereunder, the use of
proceeds thereof, of the Bridge Subordinated Debt, any Permanent Subordinated
Debt or of any drawings under a Letter of Credit and the other transactions
contemplated hereby or by the Merger Agreement. No lawsuits, claims, proceedings
or investigations are pending or, to the best knowledge of the Company,
threatened as of the Closing Date against or affecting the Company or a
Subsidiary of the Company or any of their respective properties, assets,
operations or businesses (including after giving effect to the Merger), in which
there is a probability of an adverse determination, and is reasonably likely, if
adversely decided, to have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries, taken as a whole.
5.8 Investment Company Act. Neither the Company nor any Subsidiary
of the Company is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended).
5.9 Federal Regulation. No part of the proceeds of any of the Loans
or Subordinated Debt or any drawing under a Letter of Credit will be used for
any purpose which violates the provisions of Regulation G, T, U or X of the
Board. Neither the Company nor any of its Subsidiaries is engaged or will
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under said
Regulation U.
5.10 No Default. The Company and each of its Subsidiaries have
performed all material obligations required to be performed by them under their
respective Contractual Obligations (including after giving effect to the Merger)
and they are not (with or without the lapse of time or the giving of notice, or
both) in breach or default in any respect thereunder, except to the extent that
such breach or default would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole. Neither the Company nor any of
its Subsidiaries (including after giving effect to the Merger) is in default
under any material judgment, order or decree of any Governmental Authority,
domestic or foreign, applicable to it or any of its respective properties,
assets, operations or business, except to the extent that any such defaults
would not, in the aggregate, have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole.
5.11 Taxes. Except as set forth on Schedule 5.12, each of the
Company and its Subsidiaries (including after giving effect to the Merger) has
filed or caused to be filed all material tax returns which, to the knowledge of
the Company, are required to be filed and has
50
paid all taxes shown to be due and payable on said returns or on any assessments
made against it or any of its property and all other taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority
(other than any the amount of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves (or other
sufficient provisions) in conformity with GAAP have been provided on the books
of the Company or its Subsidiaries (including after giving effect to the
Merger), as the case may be); and no tax Lien has been filed, and, to the
knowledge of the Company, no written claim is being asserted, with respect to
any such tax, fee or other charges.
5.12 Subsidiaries. After giving effect to the consummation of the
Merger, the Subsidiaries of the Company, their jurisdiction of incorporation and
their approximate net book value shall be as set forth on Schedule 5.12. As of
the Closing Date, and at all times prior to any occurrence of an IPO pursuant to
which the Capital Stock of the Company is sold in a public offering, Holdings
owns no less than 100% of the issued and outstanding Capital Stock of the
Company.
5.13 Ownership of Property; Liens. As of the Closing Date and as of
the making of any extension of credit hereunder (subject to transfers and
dispositions of property permitted under subsection 8.5), each of the Company
and its Subsidiaries has good and valid title to all of its material assets
(other than real property or interests in real property) in each case free and
clear of all mortgages, liens, security interests or encumbrances of any nature
whatsoever except Permitted Liens. With respect to real property or interests in
real property, as of the Closing Date, each of the Company and its Subsidiaries
has (i) fee title to all of the real property listed on Schedule 5.13 under the
heading "Fee Properties" (each, a "Fee Property"), and (ii) good and valid title
to the leasehold estates in all of the real property leased by it and listed on
Schedule 5.13 under the heading "Leased Properties" (each, a "Leased Property"),
in each case free and clear of all mortgages, liens, security interests,
easements, covenants, rights-of-way and other similar restrictions of any nature
whatsoever, except (A) Permitted Liens, (B) any conditions that may be shown by
a current, accurate survey or physical inspection of any Fee Property or Leased
Property, (C) as to Leased Property, the terms and provisions of the respective
lease therefor, including, without limitation, the matters set forth on Schedule
5.13, and any matters affecting the fee title and any estate superior to the
leasehold estate related thereto, and (D) title defects, or leases or subleases
granted to others, which are not material to the Fee Properties or the Leased
Properties, as the case may be, taken as a whole. The Fee Properties and the
Leased Properties constitute, as of the Closing Date, all of the real property
owned in fee or leased by the Company and its Subsidiaries.
5.14 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan that would result
in a material liability to the Company, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code. Neither
the Company nor any Commonly Controlled Entity has: been involved in any
transaction that would cause the Company to be subject to material
51
liability with respect to a Plan to which the Company or any Commonly Controlled
Entity contributed or was obligated to contribute during the six-year period
ending on the date this representation is made or deemed made; or incurred any
material liability under Title IV of ERISA which would become or remain a
material liability of the Company after the Closing Date. No termination of a
Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan
has arisen, during such five-year period that would result in a material
liability to the Company. The present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits that would result in a material
liability to the Company. Neither the Company nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Company nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Company or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made, in either case that would result in a material liability to the
Company. To the knowledge of the Company, no such Multiemployer Plan is in
Reorganization or Insolvent. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Company and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount that would result in a
material liability to the Company.
5.15 Collateral Documents. (a) Upon execution and delivery thereof
by the parties thereto, each of the Pledge Agreements will be effective to
create in favor of the Administrative Agent, for the ratable benefit of the
Lenders, a legal, valid and enforceable security interest in the pledged stock
described therein and, when stock certificates representing or constituting the
pledged stock described in each of the Pledge Agreements are delivered to the
Administrative Agent, such security interest shall constitute a perfected first
lien on, and security interest in, all right, title and interest of the pledgor
party thereto in the pledged stock described therein.
(b) Upon execution and delivery thereof by the parties thereto, each
of the Security Agreements will be effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders, a legal, valid and
enforceable security interest in the collateral described therein and Uniform
Commercial Code financing statements have been filed in each of the
jurisdictions listed on Schedule 5.15(b), or arrangements have been made for
such filing in such jurisdictions, and upon such filing, and upon the taking of
possession by the Administrative Agent of any such collateral the security
interests in which may be perfected only by possession, such security interests
will, subject to the existence of Permitted Liens, constitute perfected first
priority liens on, and security interests in, all right, title and interest of
the debtor party thereto in the collateral described therein, except to the
extent that a
52
security interest cannot be perfected therein by the filing of a financing
statement or the taking of possession under the Uniform Commercial Code of the
relevant jurisdiction.
5.16 Copyrights, Patents, Permits, Trademarks and Licenses. Schedule
5.16 sets forth a true and complete list of all material trademarks (registered
or unregistered), trade names, service marks, patents, pending patent
applications and copyrights and applications therefor owned, used or filed by or
licensed to the Company and its Subsidiaries (after giving effect to the Merger)
and, with respect to registered trademarks (if any), contains a list of all
jurisdictions in which such trademarks are registered or applied for and all
registration and application numbers. Except as disclosed on Schedule 5.16, the
Company or a Subsidiary (after giving effect to the Merger) owns or has the
right to use, without payment to any other party, trademarks (registered or
unregistered), trade names, service marks, patents, pending patent applications
and copyrights and applications therefor referred to in such Schedule. Except as
set forth on Schedule 5.16, to the best knowledge of the Company, no claims are
pending by any Person with respect to the ownership, validity, enforceability or
the Company's or any Subsidiary's use of any such trademarks (registered or
unregistered), trade names, service marks, patents, pending patent applications
and copyrights, or applications therefor, challenging or questioning the
validity or effectiveness of any of the foregoing, in any jurisdiction, domestic
or foreign.
5.17 Environmental Matters. Except (x) as set forth in the Phase I
Environmental Assessment, or (y) insofar as any exceptions to the following,
individually or in the aggregate, could not reasonably be expected to result in
a material adverse effect on the business, assets, conditions (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole:
(a) to the best knowledge of the Company, the properties owned,
leased, or otherwise operated by the Company or any of its Subsidiaries do
not contain, and have not previously contained, in, on or under,
including, without limitation, the soil and groundwater thereunder, any
Hazardous Materials in amounts or concentrations that constitute or
constituted a violation of, or could reasonably give rise to liability
under, Environmental Laws;
(b) to the best knowledge of the Company, the properties owned or
leased, or otherwise operated by the Company or any of its Subsidiaries
and all operations and facilities at such properties are in compliance
with all Environmental Laws, and there is no contamination or violation of
any Environmental Law which could interfere with the continued operation
of, or impair the fair saleable value of, such property;
(c) neither the Company nor any of its Subsidiaries has received or
is aware of any written complaint, notice of violation, alleged violation,
or notice of investigation or of potential liability under Environmental
Laws with regard to the Company or its Subsidiaries, nor does the Company
or any of its Subsidiaries have knowledge that any such action is being
contemplated, considered or threatened;
53
(d) to the best knowledge of the Company, Hazardous Materials have
not been generated, treated, stored or disposed of at, on or under any
properties presently or formerly owned, leased, or otherwise operated by
the Company or any of its Subsidiaries, nor have any Hazardous Materials
been transported from any such property, or come to be located at any
other property, in violation of or in a manner that could reasonably give
rise to liability under any Environmental Laws; and
(e) there are no governmental administrative actions or judicial
proceedings pending or, to the best knowledge of the Company and its
Subsidiaries, threatened under any Environmental Law to which the Company
or any of its Subsidiaries is a party, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements, other than permits
authorizing operations by the Company or any of its Subsidiaries,
outstanding under any Environmental Law.
5.18 Accuracy and Completeness of Information. The factual
statements contained in the financial statements referred to in subsection
5.1(a), the Credit Documents (including the schedules thereto), the Merger
Agreement and any other certificates or documents furnished or to be furnished
to the Administrative Agent or the Lenders from time to time in connection with
this Agreement, taken as a whole, do not and will not, to the best knowledge of
the Company, as of the date when made, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which the same were made, all except as otherwise qualified herein or therein,
such knowledge qualification being given only with respect to factual statements
made by Persons other than the Company or any of its Subsidiaries.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Loans and Letters of Credit. The
obligation of each Lender to make its Loans, and the obligation of the Issuing
Lender to issue any Letter of Credit, on the Closing Date are subject to the
satisfaction, or waiver by such Lender, immediately prior to or concurrently
with the making of such Loans or the issuance of such Letters of Credit, as the
case may be, of the following conditions:
(a) Agreement; Notes. The Administrative Agent shall have received
(i) a counterpart of this Agreement for each Lender duly executed and
delivered by a duly authorized officer of the Company, (ii) for the
account of each Revolving Credit Lender requesting the same pursuant to
subsection 4.13, a Revolving Credit Note of the Company conforming to the
requirements hereof and executed by a duly authorized officer of the
Company, (iii) for the account of each Term Loan Lender requesting the
same pursuant to subsection 4.13, a Term Loan Note, conforming to the
requirements hereof and
54
executed by a duly authorized officer of the Company, and (iv) for the
account of Chase, a Swing Line Note, conforming to the requirements hereof
and executed by a duly authorized officer of the Company. The
Administrative Agent shall have received a copy of the Merger Agreement.
(b) Merger. The Merger shall have been consummated pursuant to the
Merger Agreement with all fees, costs and expenses incurred in connection
therewith not to exceed approximately $22,000,000, all of the conditions
precedent set forth in Articles 9 and 10 of the Merger Agreement shall
have been satisfied or waived by Carter's, and no material provision of
the Merger Agreement shall have been amended, supplemented, waived or
otherwise modified by the Company without the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld.
(c) Capitalization; Capital Structure (i) The Company shall have
been capitalized by Holdings with at least $80,000,000 (net of an
allocable fee not to exceed $3,000,000) in cash from the issuance of its
Capital Stock, of which at least $60,000,000 shall be in the form of
Common Stock (having material terms satisfactory to the Arrangers) and
$20,000,000 (net of an allocable fee not to exceed $3,000,000) in the form
of preferred stock with material terms reasonably satisfactory to the
Agents.
(ii) (x) Holdings shall have been capitalized by the Investors
with at least $80,000,000, of which at least $60,000,000 shall be in cash
from the issuance of its Capital Stock and; (y) Holdings shall have issued
unsecured subordinated indebtedness (the "Holdings Subordinated Debt") to
the Investors in an aggregate principal amount of $20,000,000 (having
material terms reasonably satisfactory to the Agents).
(iii) After giving effect to the transactions contemplated
herein, Holdings shall have no material indebtedness other than the
Holdings Subordinated Debt.
(iv) The Bridge Loan Agreement shall have been executed and
delivered by the parties thereto (and the October 25, 1996 draft thereof,
subject to changes agreed upon by the Administrative Agent, shall be in
form and substance satisfactory to the Lenders) shall be in full force and
effect and none of the provisions thereof shall have been amended, waived,
supplemented or otherwise modified without the prior written consent of
the Administrative Agent; and the Company shall have issued the Bridge
Subordinated Debt in a principal amount of at least $90,000,000.
(v) The terms and conditions, and documentation, of any
material Indebtedness and all equity securities of the Company or any of
its Subsidiaries to be outstanding at or after the Closing Date, the
certificate of incorporation, by-laws, other governing documents and the
corporate and capital structure of the Company and its Subsidiaries, in
each case after giving effect to the consummation of the Merger, shall be
in form and substance satisfactory to the Agents.
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The execution and delivery of this Agreement by the Lenders and the Agents
shall be deemed to evidence the satisfaction of the Lenders and the Agents
with such of the matters referenced and in clauses (i) through (v) of this
paragraph (c) as shall have been disclosed and made available to the
Agents prior to the date hereof.
(d) Financial Statements. (i) The Lenders shall have received
audited consolidated financial statements of the Company for its three
most recently completed fiscal years, which financial statements shall
have been prepared in accordance with GAAP.
(ii) The Lenders shall have received unaudited interim
consolidated financial statements of the Company for each fiscal month and
each quarterly period ended during the portion of the 1996 fiscal year
through September 30, 1996 and such financial statements shall not reflect
any material adverse change in the consolidated financial condition of the
Company as reflected in the financial statements or projections previously
delivered to the Lenders.
(iii) The Lenders shall have received satisfactory pro forma
balance sheets of Holdings and, on a consolidated basis, of the Company
and its Subsidiaries as of the Closing Date reflecting and giving effect
to the transactions contemplated hereby.
(e) Fees. The Agents, the Advisor, the Arrangers and the Lenders
shall have received all fees, expenses and other consideration presented
for payment required to be paid or delivered on or before the Closing
Date.
(f) Lien Searches. The Administrative Agent shall have received the
results of a search of Uniform Commercial Code, tax and judgment filings
made with respect to each of the Company and its Subsidiaries in the
jurisdictions set forth on Schedule 5.15(b), together with copies of
financing statements disclosed by such searches and such searches shall
disclose no Liens on any assets encumbered by any Security Document,
except for Liens permitted hereunder or, if unpermitted Liens are
disclosed, the Administrative Agent shall have received satisfactory
evidence of the release of such Liens.
(g) Environmental Reports. The Administrative Agent shall have
received, with copies for each Lender, if requested, the Phase I
Environmental Assessments which shall be in form and substance
satisfactory to the Agents (the execution and delivery of this Agreement
by the Lenders and the Administrative Agent being deemed to evidence the
satisfaction of the Administrative Agent with such of the above-referenced
reports as shall have been disclosed and made available to the
Administrative Agent prior to the date hereof along with letters from the
firms preparing such reports entitling the Administrative Agent and each
Lender to rely on such reports as if prepared for and addressed to each of
them).
56
(h) Holdings Pledge Agreement. The Administrative Agent shall have
received the Holdings Pledge Agreement executed and delivered by a duly
authorized officer of Holdings, together with stock certificates
representing at least 100% of all issued and outstanding shares of Capital
Stock of the Company, and undated stock powers for each certificate,
executed in blank and delivered by a duly authorized officer of Holdings
and the acknowledgment and consent of the Company thereunder, in the form
annexed to the Holdings Pledge Agreement.
(i) Company Pledge Agreement. The Administrative Agent shall have
received the Company Pledge Agreement executed and delivered by a duly
authorized officer of the Company, together with stock certificates
representing 100% of all issued and outstanding shares of Capital Stock of
each of the Domestic Subsidiaries of the Company and 65% of the voting
Capital Stock of the Foreign Subsidiaries of the Company, and undated
stock powers for each certificate, executed in blank and delivered by a
duly authorized officer of the Company and the acknowledgment and consent
of the issuer thereunder, in the form annexed to the Company Pledge
Agreement.
(j) Company Security Agreement. The Administrative Agent shall have
received the Company Security Agreement, executed and delivered by a duly
authorized officer of the Company.
(k) Holdings Guarantee. The Administrative Agent shall have received
the Holdings Guarantee, executed and delivered by a duly authorized
officer of Holdings.
(l) Subsidiary Guarantee. The Administrative Agent shall have
received a Subsidiary Guarantee, executed and delivered by a duly
authorized officer of each of the Domestic Subsidiaries of the Company.
(m) Legal Opinion. The Administrative Agent shall have received,
dated the Closing Date and addressed to the Administrative Agent and the
Lenders, an opinion of (i) Xxxxxx, Xxxx & Xxxxxxxx LLP, counsel to the
Credit Parties, in substantially the form of Exhibit K-1, with such
changes thereto as may be approved by the Administrative Agent and its
counsel and (ii) Xxxxx, Xxxxxxx and Xxxxxxxxx, LLP, counsel to the Credit
Parties, in substantially the form of Exhibit K-2, with such changes
thereto as may be approved by the Administrative Agent and its counsel.
(n) Closing Certificate. The Administrative Agent shall have
received a Closing Certificate of each Credit Party dated the Closing
Date, in substantially the form of Exhibits X-0, X-0 xxx X-0,
respectively, with appropriate insertions and attachments, in form and
substance satisfactory to the Administrative Agent and its counsel,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary of the Company, Holdings and the Subsidiaries of the
Company, respectively.
57
(o) Consents, Authorizations and Filings, etc. Except for the
financing statements contemplated by the Company Security Agreement, all
consents, authorizations and filings, if any, required in connection with
the execution, delivery and performance by the Credit Parties, and the
validity and enforceability against the Credit Parties, of the Credit
Documents to which any of them is a party, shall have been obtained or
made, and such consents, authorizations and filings shall be in full force
and effect, except such consents, authorizations and filings, the failure
to obtain which would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole.
(p) Insurance. The Administrative Agent shall have received (i) a
schedule describing all insurance maintained by the Company and its
Subsidiaries pursuant to subsection 7.5, and (ii) binders (or other
customary evidence as to the obtaining and maintenance by the Company of
such insurance) for each policy set forth on such schedule insuring
against casualty and other usual and customary risks.
(q) Existing Credit Agreements; Indebtedness. (i) On the Closing
Date, the commitments under the Existing Credit Agreement shall have been
terminated, all loans thereunder shall have been repaid in full, together
with interest thereon, all letters of credit issued thereunder shall have
been terminated or incorporated hereunder as, or supported hereunder by,
Letters of Credit, and all other amounts owing pursuant to the Existing
Credit Agreement shall have been repaid in full, and the Administrative
Agent shall have received evidence in form, scope and substance reasonably
satisfactory to it that the matters set forth in this subsection 6.1(r)
have been satisfied at such time.
(ii) On the Closing Date, the creditors under the Existing Credit
Agreement shall have terminated and released all Liens on the capital
stock of and assets owned by the Company and its Subsidiaries, and the
Administrative Agent shall have received all such releases as may have
been requested by the Administrative Agent, which releases shall be in
form and substance reasonably satisfactory to the Administrative Agent.
(r) Other Agreements. The Administrative Agent shall have received
each additional document or instrument reasonably requested by the
Required Lenders.
(s) Litigation. On the Closing Date, there shall be no actions,
suits or proceedings pending or threatened against any Credit Party (a)
with respect to this Agreement or any other Credit Document or the
transactions contemplated hereby or thereby (including the Merger) which
would be reasonably expected to have a material adverse effect on the
rights or remedies of the Lenders under the Credit Documents or (b) which
the Administrative Agent or the Required Lenders shall determine could
reasonably be expected to have a material adverse effect on the rights or
remedies of the Lenders hereunder or under any other Credit Document or on
the ability of any
58
Credit Party to perform its respective obligations to the Lenders
hereunder or under any other Credit Document.
(t) Approvals. On the Closing Date, all necessary governmental
approvals and all necessary authorizations, consents, approvals or waivers
of other third parties in connection with the transactions contemplated by
the Credit Documents and the Merger Agreement shall have been obtained and
remain in effect (except where the failure to do so would not reasonably
be expected to have a material adverse effect on (x) the business,
operations, property, condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole, or (y) (I) the validity or
enforceability of this Agreement, any of the Notes or the other Credit
Documents or (II) the rights or remedies of the Administrative Agent or
the Lenders hereunder or thereunder), and all applicable waiting periods
shall have expired without any action being taken by any competent
authority which restrains or prevents such transactions or imposes
materially adverse conditions upon the consummation of such transactions.
6.2 Conditions to All Loans and Letters of Credit. The obligation of
each Lender to make any Loan (other than any Revolving Credit Loan the proceeds
of which are to be used to repay Refunded Swing Line Loans) and the obligation
of the Issuing Lender to issue any Letter of Credit is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Representations and Warranties. Each of the representations and
warranties made in or pursuant to Section 5 or which are contained in any
other Credit Document shall be true and correct in all material respects
on and as of the date of such Loan or of the issuance of such Letter of
Credit as if made on and as of such date (unless stated to relate to a
specific earlier date, in which case, such representations and warranties
shall be true and correct in all material respects as of such earlier
date).
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such Borrowing Date or after
giving effect to such Loan to be made or such Letter of Credit to be
issued on such Borrowing Date.
(c) Certificate. The Administrative Agent shall have received, with
a copy for each Lender, a certificate of a Responsible Officer of the
Company to the effect that the applicable statements contained in
paragraphs (a) and (b) above are true and correct as at the Borrowing
Date.
Each borrowing by the Company hereunder and the issuance of each Letter of
Credit by the Issuing Lender hereunder shall constitute a representation and
warranty by the Company as of the date of such borrowing or issuance that the
conditions in clauses (a) and (b) and of this subsection 6.2 have been
satisfied.
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SECTION 7. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or L/C Obligation remains outstanding and unpaid, any
amount (unless cash in an amount equal to such amount has been deposited to a
cash collateral account established by the Administrative Agent) remains
available to be drawn under any Letter of Credit or any other amount is owing to
any Lender or the Administrative Agent hereunder or under any of the other
Credit Documents, it shall, and, in the case of the agreements contained in
subsections 7.3 through 7.6, and 7.8 through 7.10, the Company shall cause each
of its Subsidiaries to:
7.1 Financial Statements. Furnish to the Administrative Agent (with
sufficient copies for each Lender which the Administrative Agent shall promptly
furnish to each Lender):
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Company, a copy of the consolidated balance
sheet of the Company and its consolidated Subsidiaries as at the end of
such fiscal year and the related consolidated statements of stockholders'
equity and cash flows and the consolidated statements of income of the
Company and its Subsidiaries for such fiscal year, setting forth in each
case in comparative form the figures for the previous year and, in the
case of the consolidated balance sheet referred to above, reported on,
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, or qualification
which would affect the computation of financial covenants, by independent
certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Company, the unaudited consolidated balance sheet of the
Company and its Subsidiaries as at the end of each such quarter and the
related unaudited consolidated statements of income and cash flows of the
Company and its Subsidiaries for such quarterly period and the portion of
the fiscal year of the Company through such date, setting forth in each
case in comparative form the figures for the corresponding quarter in, and
year to date portion of, the previous year, and the figures for such
periods in the budget prepared by the Company and furnished to the
Administrative Agent, certified by the chief financial officer, controller
or treasurer of the Company as being fairly stated in all material
respects;
(c) as soon as practicable, and in any event within 35 days after
the end of each calendar month of each year, commencing with the first
full month ended following the Closing Date, the unaudited consolidated
balance sheet of the Company and its Subsidiaries as at the end of such
month and the related unaudited consolidated statement of income of the
Company and its Subsidiaries for such month and for the portion of the
fiscal year of the Company through such date in the form and detail
similar to those customarily prepared by management of the Company for
internal use,
60
setting forth in each case in comparative form the consolidated figures
for the corresponding month of, and year to date portion of, the previous
year and the figures for such periods in the budget prepared by the
Company and furnished to the Administrative Agent, certified by the chief
financial officer, controller or treasurer of the Company as being fairly
stated in all material respects;
(d) as soon as available, but in any event not later than (i) 60
days after the beginning of the 1997 fiscal year and (ii) 30 days after
the beginning of each fiscal year of the Company thereafter to which such
budget relates, a preliminary consolidated operating budget for the
Company and its Subsidiaries taken as a whole; and as soon as available,
any material revision to or any final revision of any such preliminary
annual operating budget or any such consolidated operating budget; and
(e) concurrently with the delivery of financial statements pursuant
to subsection 7.1(a) or (b), a certificate of the chief financial officer
of the Company setting forth, in reasonable detail, the computations of
Consolidated EBITDA as of the last day of the fiscal period covered by
such financial statements, Capital Expenditures as of such last day, the
ratio of Consolidated Funded Indebtedness to Consolidated EBITDA as of
such last day, and the Interest Coverage Ratio as of such last day;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and (except in the case of
the statements referred to in paragraphs (c) and (d) of this subsection 7.1) in
accordance with GAAP.
7.2 Certificates; Other Information. Furnish to the Administrative
Agent (with sufficient copies for each Lender which the Administrative Agent
shall promptly deliver to each Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in subsection 7.1(a), a letter from the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary to express their opinion
on such financial statements no knowledge was obtained of any Default or
Event of Default under subsections 4.4(b)(i), (ii) and (iii), 8.1, 8.3,
and 8.6 through 8.11, except as specified in such letter;
(b) within 15 days of the delivery of the financial statements
referred to in subsections 7.1(a) and (b) (except that the certificate
referred to in clause (iii) below shall be delivered concurrently with
such financial statements), a certificate of the chief financial officer
of the Company stating that, to the best of such officer's knowledge,
during such period (i) no Subsidiary has been formed or acquired (or, if
any such Subsidiary has been formed or acquired, the Company has complied
with the requirements of subsection 7.9 with respect thereto), (ii)
neither the Company nor any of its Subsidiaries has changed its name, its
principal place of business, its chief executive office or the location of
any material item of tangible Collateral without
61
complying with the requirements of this Agreement and the Security
Documents with respect thereto, (iii) each of the Company and its
Subsidiaries has observed or performed all of its respective covenants and
other agreements, and satisfied every material condition, contained in
this Agreement, the Notes and the other Credit Documents to be observed,
performed or satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate, (iv) showing in detail as of the end of the related fiscal
period the figures and calculations supporting such statement in respect
of clause (e) of subsection 8.1, clauses (b) and (e) of subsection 8.3 and
subsections 8.7 through 8.12 and any other calculations reasonably
requested by the Administrative Agent with respect to the quantitative
aspects of the other covenants contained herein, and (v) if not specified
in the financial statements delivered pursuant to subsection 7.1,
specifying the aggregate amount of interest paid or accrued by the Company
and its Subsidiaries, and the aggregate amount of depreciation, depletion
and amortization charged on the books of the Company and its Subsidiaries,
during such accounting period;
(c) promptly upon receipt thereof, copies of all final reports
submitted to the Company or to any of its Subsidiaries by independent
certified public accountants in connection with each annual, interim or
special audit of the books of the Company or any of its Subsidiaries made
by such accountants, including, without limitation, any final comment
letter submitted by such accountants to management in connection with
their annual audit;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available
to the public generally by the Company or any of its Subsidiaries, if any,
and all regular and periodic reports and all final registration statements
and final prospectuses, if any, filed by the Company or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any Governmental Authority succeeding to any of its
functions;
(e) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), and within 45 days following
each calendar month with respect to which the financial statements
referred to in subsection 7.1(c) are required to be delivered, a
management summary describing and analyzing the performance of the Company
and its Subsidiaries during the periods covered by such financial
statements;
(f) within 45 days after the end of each fiscal quarter, a summary
of all Asset Sales during such fiscal quarter including the amount of all
Net Proceeds from such Asset Sales not previously applied to prepayments
of the Loans and reductions of the Commitments pursuant to the proviso to
subsection 4.4(b)(iii); and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
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7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all its
obligations and liabilities of whatever nature, except (a) when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company or any of its Subsidiaries, as the case may
be, (b) for delinquent obligations which do not have a material adverse effect
on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole and (c) for
trade and other accounts payable in the ordinary course of business which are
not overdue for a period of more than 90 days or, if overdue for more than 90
days, as to which a dispute exists and adequate reserves in conformity with GAAP
have been established on the books of the Company or any of its Subsidiaries, as
the case may be.
7.4 Conduct of Business and Maintenance of Existence. Continue to
engage in businesses of the same general type as now conducted by it (after
giving effect to the Merger), and preserve, renew and keep in full force and
effect its corporate existence and take all reasonable action to maintain all
material rights, material privileges, franchises, copyrights, patents,
trademarks and trade names necessary or desirable in the normal conduct of its
business except for rights, privileges, franchises, copyrights, patents,
trademarks and tradenames the loss of which would not in the aggregate have a
material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole, and except as otherwise permitted by subsections 8.4 and 8.5; and
comply with all applicable Requirements of Law except to the extent that the
failure to comply therewith would not, in the aggregate, have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
7.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition (ordinary wear
and tear excepted); and
(b) Maintain with financially sound and reputable insurance
companies insurance on all its property in at least such amounts and with only
such deductibles as are usually maintained by, and against at least such risks
(but including, in any event, public liability insurance) as are usually insured
against in the same general area by, companies engaged in the same or a similar
business, and furnish to each Lender, (i) annually, a schedule disclosing (in a
manner substantially similar to that used in the schedule provided pursuant to
subsection 6.1(q)) all insurance against products liability risk maintained by
the Company and its Subsidiaries pursuant to this subsection 7.5(b) or otherwise
and (ii) upon written request of any Lender, full information as to the
insurance carried; provided that the Company may implement programs of self
insurance in the ordinary course of business and in accordance with industry
standards for a company of similar size so long as reserves are maintained in
accordance with GAAP for the liabilities associated therewith.
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7.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
which permit financial statements to be prepared in conformity with GAAP and all
Requirements of Law; and permit representatives of any Lender upon reasonable
notice (but no more frequently than monthly unless a Default or Event of Default
shall have occurred and be continuing), to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be requested upon reasonable
notice, and to discuss the business, operations, assets and financial and other
condition of the Company and its Subsidiaries with officers and employees
thereof and with their independent certified public accountants.
7.7 Notices. Promptly give notice to the Administrative Agent and
each Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any instrument or
other agreement, guarantee or collateral document of the Company or any of
its Subsidiaries which default or event of default has not been waived and
would have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole, or any other default or event of default
under any such instrument, agreement, guarantee or other collateral
document which, but for the proviso to clause (e) of Section 9, would have
constituted a Default or Event of Default under this Agreement, or (ii)
litigation, investigation or proceeding which may exist at any time
between the Company or any of its Subsidiaries and any Governmental
Authority, or receipt of any notice of any environmental claim or
assessment against the Company or any of its Subsidiaries by any
Governmental Authority, which in any such case would have a material
adverse effect on the business, assets, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries taken as a
whole;
(c) of any litigation or proceeding against the Company or any of
its Subsidiaries (i) in which more than $2,000,000 of the amount claimed
is not covered by insurance or (ii) in which injunctive or similar relief
is sought which if obtained would have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole;
(d) of the following events, as soon as practicable after, and in
any event within 30 days after, the Company knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan which Reportable Event could reasonably result in material liability
to the Company and its Subsidiaries taken as a whole, or (ii) the
institution of proceedings or the taking of any other action by PBGC, the
Company or any Commonly Controlled Entity to terminate, withdraw or
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partially withdraw from any Plan and, with respect to a Multiemployer
Plan, the Reorganization or Insolvency of such Plan, in each of the
foregoing cases which could reasonably result in material liability to the
Company and its Subsidiaries taken as a whole, and in addition to such
notice, deliver to the Administrative Agent and each Lender whichever of
the following may be applicable: (A) a certificate of a Responsible
Officer of the Company setting forth details as to such Reportable Event
and the action that the Company or such Commonly Controlled Entity
proposes to take with respect thereto, together with a copy of any notice
of such Reportable Event that may be required to be filed with PBGC, or
(B) any notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be terminated, as
the case may be;
(e) concurrently with the delivery of the information delivered
pursuant to subsection 7.2(f) and each prepayment required pursuant to
subsection 4.4(b)(iii), of any Asset Sale or substantially like-kind
exchange of real property by the Company or any of its Subsidiaries; and
(f) of a material adverse change known to the Company or its
Subsidiaries in the business, assets, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries taken as a
whole.
Each notice pursuant to this subsection 7.7 shall be accompanied by a statement
of a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and (in the cases of clauses (a) through (d)) stating what
action the Company proposes to take with respect thereto.
7.8 Environmental Laws. (a)(i) Comply with all Environmental Laws
applicable to it, and obtain, comply with and maintain any and all Environmental
Permits necessary for its operations as conducted and as planned; and (ii) take
reasonable efforts to ensure that all of its tenants, subtenants, contractors,
subcontractors, and invitees comply with all Environmental Laws, and obtain,
comply with and maintain any and all Environmental Permits, applicable to any of
them insofar as any failure to so comply, obtain or maintain could adversely
affect the Borrower or any of its Subsidiaries. Noncompliance by the Borrower or
any of its Subsidiaries with any applicable Environmental Law or Environmental
Permit shall be deemed not to constitute a breach of this 7.8(a); provided that,
upon learning of any such noncompliance, the Borrower and its Subsidiaries shall
promptly undertake reasonable efforts to achieve compliance, and provided
further that, in any case, such noncompliance, and any other noncompliance with
Environmental Law, individually or in the aggregate, could not reasonably be
expected to give rise to a Material Adverse Effect.
(b) Comply in a timely manner with all orders and lawful directives
regarding Environmental Laws issued to the Borrower or any of its Subsidiaries
by any Governmental Authority, other than such orders and lawful directives as
to which an appeal or other challenge has been timely and properly taken in good
faith and the pendency of any and all
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such appeals and other challenges could not reasonably be expected to give rise
to a Material Adverse Effect.
(c) Maintain, update as appropriate, and implement in all material
respects an environmental program reasonably designed to (i) ensure that the
Borrower, its Subsidiaries, any of their respective operations (including,
without limitation, disposal), and any properties owned, leased or operated by
any of them, attain and remain in substantial compliance with all applicable
Environmental Laws; (ii) reasonably and prudently manage any liabilities or
potential liabilities that the Borrower, any of the other Loan Parties, any of
their respective operations (including, without limitation, disposal), and any
properties owned or leased by any of them, may have under all applicable
Environmental Laws; and (iii) ensure that the Borrower and its Subsidiaries
undertake reasonable efforts to identify, and reasonably evaluate, issues of
compliance with and liability under Environmental Laws prior to acquiring,
directly or indirectly, any ownership or leasehold interest in real property, or
other interest in any real property that could give rise to Borrower or any of
its Subsidiaries being subjected to liability under any Environmental Law as a
result of such acquisition.
7.9 Additional Collateral. (a) Subject to subsection 7.9(e), with
respect to any assets acquired after the Closing Date by the Company or any of
its Domestic Subsidiaries that are intended to be subject to the Lien created by
any of the Security Documents but which are not so subject (other than (y) any
assets described in paragraph (b) or (c) of this subsection and (z) immaterial
assets), promptly (and in any event within 30 days after the acquisition
thereof): (i) execute and deliver to the Administrative Agent such amendments to
the relevant Security Documents or such other documents as the Administrative
Agent shall deem necessary or advisable to grant to the Administrative Agent,
for the benefit of the Lenders, a Lien on such assets, and (ii) take all actions
necessary or advisable to cause such Lien to be duly perfected to the extent
required by such Security Document in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be reasonably requested by the
Administrative Agent.
(b) With respect to any Person that is or becomes a Subsidiary
(other than any Foreign Subsidiary) that has material assets, promptly upon the
request of the Administrative Agent: (i) execute and deliver to the
Administrative Agent, for the benefit of the Lenders, a new pledge agreement or
such amendments to the relevant Pledge Agreement as the Administrative Agent
shall deem necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a Lien on the Capital Stock of such Subsidiary which is
owned by the Company or any of its Subsidiaries, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers executed and delivered in blank by a duly authorized
officer of the Company or such Subsidiary, as the case may be, and (iii) cause
such new Subsidiary (A) to become a party to a subsidiary guarantee and a
subsidiary security agreement, in each case pursuant to documentation which is
in form and substance reasonably satisfactory to the Administrative Agent, and
(B) to take all actions necessary or advisable to cause the Lien created by the
subsidiary security agreement to be duly perfected to the extent required by
such security agreement in accordance with all applicable Requirements of Law,
including, without limitation, the filing
66
of financing statements in such jurisdictions as may be reasonably requested by
the Administrative Agent.
(c) With respect to any Person that is or becomes a Foreign
Subsidiary and that has material assets, promptly upon the request of the
Administrative Agent: (i) execute and deliver to the Administrative Agent a new
pledge agreement or such amendments to the relevant Pledge Agreement as the
Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a Lien on the Capital
Stock of such Subsidiary which is owned by the Company or any of its
Subsidiaries (provided that in no event shall more than 65% of the Capital Stock
of any such Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent any certificates representing such Capital Stock, together
with undated stock powers executed and delivered in blank by a duly authorized
officer of the Company or such Subsidiary, as the case may be, and take or cause
to be taken all such other actions under the law of the jurisdiction of
organization of such Foreign Subsidiary as may be necessary or advisable to
perfect such Lien on such Capital Stock, and if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters described in clauses (i) and (ii) immediately preceding, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) Within 60 days of the Closing Date, the Administrative Agent
shall have received (i) fully executed counterparts of deeds of trust, leasehold
deeds of trust, mortgages, leasehold mortgages and similar documents in each
case in form and substance reasonably satisfactory to the Administrative Agent
and substantially in the form of Exhibit M (each a "Mortgage" and collectively,
the "Mortgages") covering all the Mortgaged Properties, and arrangements
reasonably satisfactory to the Administrative Agent shall be in place to provide
that counterparts of such Mortgages shall be promptly recorded upon execution in
all places to the extent necessary or desirable, in the judgment of the
Administrative Agent, effectively to create a valid and enforceable first
priority Lien, subject only to Permitted Liens, on each Mortgaged Property in
favor of the Administrative Agent (or such other trustee as may be required or
desired under local law) for the benefit of the Lenders, (ii) a lender's title
insurance policy, paid for by the Borrower, issued by a nationally recognized
title insurance company, together with such endorsements, coinsurance and
reinsurance as may be reasonably requested by the Administrative Agent, in form
and substance reasonably acceptable to the Agent, insuring each Mortgage as a
first lien on the relevant Mortgaged Property and subject only to Liens
expressly agreed to by the Administrative Agent and (iii) such other documents
(including without limitation, current ALTA/ASCM surveys of any parcel of Real
Property made in accordance with ALTA/ASCM standards, including Table A, Items
Nos. 1-4 and 6- 13) as are reasonably required by the Administrative Agent.
(e) Upon the request of the Administrative Agent or the Required
Lenders, the Company will, and will cause its Domestic Subsidiaries to, grant to
the Administrative Agent, within 60 days of such request, security interests and
mortgages (an "Additional Mortgage") in such owned Real Property of the Company
and its Domestic Subsidiaries as are acquired after the Closing Date by the
Company or such Subsidiary and that, together with any
67
improvements thereon, individually have a value of at least $1,000,000, as
additional security for the obligations of the Credit Parties under any Credit
Document. Such Mortgages shall be granted pursuant to documentation reasonably
satisfactory in form and substance to the Administrative Agent and shall
constitute valid and enforceable perfected Liens subject only to Permitted Liens
and such other Liens reasonably acceptable to the Administrative Agent. The
Additional Mortgages or instruments related thereto shall be duly recorded or
filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the Administrative Agent
required to be granted pursuant to the Additional Mortgages and all taxes, fees
and other charges payable in connection therewith shall be paid in full. If
requested by the Administrative Agent or the Required Lenders, the Company shall
provide a lender's title policy with respect to each such Additional Mortgage
conforming to the requirements of subsection 7.9(d).
SECTION 8. NEGATIVE COVENANTS
The Company hereby agrees that it shall not, and the Company shall
not permit any of its Subsidiaries to, directly or indirectly so long as the
Commitments remain in effect or any Loan, Note or L/C Obligation remains
outstanding and unpaid, any amount (unless cash in an amount equal to such
amount has been deposited to a cash collateral account established by the
Administrative Agent) remains available to be drawn under any Letter of Credit
or any other amount is owing to any Lender or the Administrative Agent hereunder
or under any other Credit Document (it being understood that each of the
permitted exceptions to each of the covenants in this Section 8 is in addition
to, and not overlapping with, any other of such permitted exceptions except to
the extent expressly provided):
8.1 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) the Indebtedness outstanding on the Closing Date and reflected
on Schedule 8.1(a), but excluding the refinancing of any such
Indebtedness;
(b) Indebtedness consisting of the Loans and in connection with the
Letters of Credit and this Agreement;
(c) Indebtedness (i) of the Company to any Subsidiary, (ii) of any
Domestic Subsidiary to the Company or any other Subsidiary and (iii) of
any Foreign Subsidiary to the Company or any other Subsidiary in an
aggregate principal amount at any time outstanding not to exceed
$10,000,000 less the sum of (A) the amount of any Indebtedness outstanding
pursuant to subsection 8.1(g), (B) the amount of any guarantees of
obligations of Foreign Subsidiaries pursuant to subsection 8.3(c)(ii) and
(C) the amount of any investments made in a Foreign Subsidiary pursuant to
subsection 8.6(b)(iii), provided that such $10,000,000 amount may be
increased by up to $25,000,000 (subject to reduction as provided herein)
the proceeds of which incremental amount shall be used for (x) Capital
Expenditures (which shall be subject to subsection 8.7) for the
acquisition of production plants and/or production assets and
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(y) for production related costs (including, without limitation, costs
related to personnel and inventory) provided further that such
Indebtedness referred to in this clause (c), if to the Company or any
Domestic Subsidiary, is evidenced by a promissory note or promissory notes
which has or have been pledged to the Administrative Agent on terms and
conditions satisfactory to the Administrative Agent;
(d) Indebtedness of the Company in respect of:
(i) up to $90,000,000 principal amount of Bridge Subordinated
Debt issued on the Closing Date, and additional principal amount of
Bridge Subordinated Debt issued in lieu of cash interest on the
outstanding Bridge Subordinated Debt and otherwise as contemplated
by the Bridge Loan Agreement upon exchange of Bridge Subordinated
Debt into exchange notes;
(ii) any Permanent Subordinated Debt not to exceed
$110,000,000, the proceeds (net of any fees and expenses in
connection therewith) of which are used, to the extent available, as
follows:
(A) first, such net proceeds shall be applied to prepay,
redeem, retire or repurchase the outstanding principal amount
of the Bridge Subordinated Debt;
(B) second, any net proceeds in excess of the amount
applied pursuant to clause (A) shall be applied to the
prepayment, in an aggregate amount not to exceed $5,000,000,
of the Term Loans and reduction of the Commitments in
accordance with subsection 4.4(b)(v);
(C) third, the difference between (x) $100,000,000 and
(y) the net proceeds applied pursuant to clauses (A) and (B)
shall be applied to the prepayment of the outstanding
Revolving Credit Loans, if any, without any reduction of the
Commitments (but not otherwise required to be applied to
Indebtedness under this Agreement); and
(D) fourth, if the aggregate net proceeds of such
Permanent Subordinated Debt exceeds $100,000,000, (x) 50% of
such proceeds in excess of $100,000,000 shall be applied to
the prepayment of the Term Loans and reduction of the
Commitments in accordance with subsection 4.4(b)(v) and (y)
50% of such proceeds shall be applied to the prepayment of
outstanding Revolving Credit Loans, if any, without any
reduction of the Commitments (but not otherwise required to be
applied to Indebtedness under this Agreement); and
(iii) any refinancing of the Permanent Subordinated Debt
contemplated in the definition thereof.
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(e) Indebtedness of the Company and its Subsidiaries for industrial
revenue bonds or other similar governmental and municipal bonds, for the
deferred purchase price of newly acquired property and to finance
equipment of the Company and its Subsidiaries (pursuant to purchase money
mortgages or otherwise and whether owed to the seller or a third party)
used in the ordinary course of business (provided such financing is
entered into within 180 days of the acquisition of such property) of the
Company and its Subsidiaries in an amount (based on the remaining balance
of the obligations therefor on the books of the Company and its
Subsidiaries) which shall not exceed $10,000,000 in the aggregate at any
one time outstanding and Indebtedness of the Company and its Subsidiaries
in respect of Financing Leases to the extent subsections 8.7 and 8.10
would not be contravened;
(f) Indebtedness of the Company and its Domestic Subsidiaries in an
aggregate principal amount at any one time outstanding not in excess of
$10,000,000;
(g) Indebtedness of Foreign Subsidiaries in an aggregate principal
amount at any time outstanding not in excess of the equivalent at the date
of each incurrence thereof of $10,000,000, as reduced by amounts pursuant
to ss.8.1(c)(iii), ss.8.3(c)(ii) and ss.8.6(b)(iii), provided that such
$10,000,000 amount may be increased by up to $25,000,000 (subject to
reduction as provided herein) the proceeds of which incremental amount
shall be used for (i) Capital Expenditures (which shall be subject to
subsection 8.7) for the acquisition of production plants and/or production
assets and (ii) for production related costs (including, without
limitation, costs related to personnel and inventory);
(h) Indebtedness in respect of letters of credit (other than Letters
of Credit issued hereunder) in an aggregate principal amount equal to
$5,000,000;
(i) (i) Indebtedness assumed in connection with acquisitions
permitted by subsection 8.7 (so long as such Indebtedness was not incurred
in anticipation of such acquisitions), (ii) Indebtedness of newly acquired
Subsidiaries acquired in such acquisitions (so long as such Indebtedness
was not incurred in anticipation of such acquisition) and (iii)
Indebtedness owed to the seller in any acquisition permitted by subsection
8.7 constituting part of the purchase price thereof, all of which
Indebtedness permitted by this subsection 8.1(i) shall not exceed in the
aggregate at any time $5,000,000;
(j) Indebtedness in connection with workmen's compensation
obligations and general liability exposure of the Company and its
Subsidiaries; and
(k) Additional unsecured subordinated indebtedness of the Company
and its Subsidiaries provided that (i) such Indebtedness shall not exceed
$10,000,000 in aggregate principal amount at any time outstanding plus any
additional principal amount of such Indebtedness issued in lieu of cash
interest on such outstanding Indebtedness, (ii) no part of the principal
amount of such Indebtedness shall have a
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maturity date earlier than the one-year anniversary of the final
Installment Payment Date and (iii) the non-default interest rate thereon
shall not exceed 12% per annum.
8.2 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets, income or profits, whether now owned
or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges not
yet delinquent or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or such Subsidiary, as the case may
be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations which are not yet due or
which are bonded or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or such Subsidiary, as the case may
be, in accordance with GAAP;
(c) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business;
(e) easements (including, without limitation, reciprocal easement
agreements), rights-of-way, building, zoning and similar restrictions,
utility agreements, covenants, reservations, restrictions, encroachments,
changes, and other similar encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of business,
which do not in the aggregate materially detract from the aggregate value
of the properties of the Company and its Subsidiaries, taken as a whole,
or in the aggregate materially interfere with or adversely affect in any
material respect the ordinary conduct of the business of the Company and
its Subsidiaries on the properties subject thereto, taken as a whole;
(f) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Credit Documents and bankers' liens arising by operation
of law;
(g) Liens on property of the Company or any of its Subsidiaries
created solely for the purpose of securing Indebtedness permitted by
subsection 8.1(e), 8.1(g) (it being understood that such Liens shall
attach only to the property of the Foreign Subsidiaries) or subsection
8.1(i)(i) or (ii) (so long as such Lien was not incurred in anticipation
of the related acquisition), representing or incurred to finance,
refinance or
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refund the purchase price of property, provided that no such Lien incurred
in connection with Indebtedness pursuant to subsection 8.1(e) and
8.1(i)(i) or (ii) shall extend to or cover other property of the Company
or such Subsidiary other than the respective property so acquired, and the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed the original purchase price of such property;
(h) Liens existing on the Closing Date after giving effect to the
consummation of the Merger and described in subsection 5.13 or Schedule
8.2(h), provided that no such Lien shall extend to or cover other property
of the Company or the respective Subsidiary other than the respective
property so encumbered, and the principal amount of Indebtedness secured
by any such Lien shall at no time exceed the original principal amount of
the Indebtedness so secured.
(i) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of the Commercial L/Cs;
(j) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matter of record that have been placed by any
developer, landlord or other third party on property over which the
Company or any Subsidiary of the Company has easement rights or on any
Leased Property and subordination or similar agreements relating thereto
and (ii) any condemnation or eminent domain proceedings affecting any real
property;
(k) Liens in connection with workmen's compensation obligations and
general liability exposure of the Company and its Subsidiaries; and
(l) Liens on goods (and Proceeds thereof) securing reimbursement
obligations in respect of commercial letters of credit issued in
accordance with the terms of this Agreement.
8.3 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligation except:
(a) the Guarantees;
(b) other guarantees by the Company incurred in the ordinary course
of business for an aggregate amount not to exceed $2,000,000 at any one
time;
(c) guarantees by the Company or any Domestic Subsidiary (i) of
obligations of its Domestic Subsidiaries and (ii) of obligations of its
Foreign Subsidiaries in an aggregate principal amount not to exceed
$10,000,000, as reduced by amounts outstanding in accordance with
subsections 8.1(c)(iii), 8.1(g) or 8.6(b)(iii), provided that such
$10,000,000 amount may be increased by up to $25,000,000 (subject to
reduction as provided herein) the proceeds of which incremental amount
shall be used for (x) Capital Expenditures (which shall be subject to
subsection 8.7) for the
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acquisition of production plants and/or production assets and (y) for
production related costs (including, without limitation, costs related to
personnel and inventory);
(d) Contingent Obligations existing on the Closing Date and
described in Schedule 8.3(d);
(e) guarantees of obligations to third parties in connection with
relocation of employees of the Company or any of its Subsidiaries, in an
amount which, together with all loans and advances made pursuant to
subsection 8.6(f), shall not exceed $2,000,000 at any time outstanding;
(f) Contingent Obligations in connection with workmen's compensation
obligations and general liability exposure of the Company and its
Subsidiaries; and
(g) subordinated guarantees in respect of the Subordinated Debt
issued by Subsidiaries of the Company which have also issued Guarantees,
provided such subordinated guarantees are subordinated to the Guarantees
on the same basis as the Subordinated Debt is subordinated to the Loans.
8.4 Prohibition of Fundamental Changes. Enter into any merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or engage in any type of business other
than of the same general type now conducted by it, except (a) for the
transactions otherwise permitted pursuant to clause (b) of subsection 8.5, (b)
any Subsidiary of the Company may be merged with and into the Company or a
wholly-owned Domestic Subsidiary of the Company, (c) Subsidiaries with a net
book value not greater than $100,000 may be dissolved and (d) any Subsidiary may
otherwise be dissolved provided that upon dissolution, the assets of such
Subsidiary are transferred to the Company or a wholly-owned Subsidiary of the
Company on the terms and subject to the conditions set forth in subsection
8.5(b).
8.5 Prohibition on Sale of Assets. Convey, sell, lease (other than a
sublease of real property), assign, transfer or otherwise dispose of (including
through a transaction of merger or consolidation of any Subsidiary of the
Company) any of its property, business or assets (including, without limitation,
other payments and receivables but excluding leasehold interests), whether now
owned or hereafter acquired, except:
(a) for sales or other dispositions of inventory in the ordinary
course of business;
(b) that any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation
or otherwise) to, or merge with and into, the Company or a wholly-owned
Subsidiary of the Company and any Subsidiary of the Company may sell or
otherwise dispose of, or part with control of any or all of, the stock of
any Subsidiary to a wholly-owned Subsidiary of the Company, provided that
no such transaction may be effected if it would result in the
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transfer of any assets of, or any stock of, a Subsidiary to, or the merger
with and into, another Subsidiary all of the Capital Stock of which owned
by the Company or any Subsidiary has not been pledged to the
Administrative Agent and which has not guaranteed the obligations of the
Company, for the benefit of the Lenders, under the Notes and this
Agreement, and granted liens or security interests in favor of the
Administrative Agent, for the benefit of the Lenders, on substantially all
of its assets to secure such guarantee, pursuant to a guarantee, security
agreement and other documentation reasonably satisfactory to the
Administrative Agent;
(c) leases of Fee Properties and other real property owned in fee;
(d) any condemnation or eminent domain proceedings affecting any
real property, provided, however, that the parties hereto agree that the
net proceeds received in connection with such proceeding shall be deemed
not to constitute "Net Proceeds" if such net proceeds are reinvested in
new or existing properties within eighteen months;
(e) substantially like-kind exchanges of real property provided that
any cash received by the Company or any Subsidiary of the Company in
connection with such an exchange (net of all costs and expenses incurred
in connection with such transaction or with the commencement of operation
of real property received in such exchange) shall be deemed to be Net
Proceeds and shall be applied as provided for herein;
(f) for the sale or other disposition of any property that, in the
reasonable judgment of the Company has become uneconomic, obsolete or worn
out, and which in each case is disposed of in the ordinary course of
business; and
(g) for the sale or other disposition of any property the aggregate
amount of the net proceeds received in respect of which shall not exceed
$5,000,000.
8.6 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of, or make any other investment in
(including, without limitation, any acquisition of all or any substantial
portion of the assets, and any acquisition of a business or a product line, of
other companies, other than the acquisition of inventory in the ordinary course
of business), any Person (except to the extent permitted by Section 8.7),
except:
(a) the Company may make loans or advances to any Subsidiary, and
any Subsidiary may make loans or advances to the Company or any other
Subsidiary, to the extent in each case the Indebtedness created thereby is
permitted by subsection 8.1(c);
(b) (i) any Subsidiary may make investments in the Company (by way
of capital contribution or otherwise), (ii) the Company and any Subsidiary
may make investments in, or create, any wholly-owned Domestic Subsidiary
(by way of capital
74
contribution or otherwise) or make investments permitted by subsection
8.5(b), provided that, in any such case, the requirements of subsection
7.9 are satisfied and (iii) the Company and any Subsidiary may make
investments in, or create, any wholly-owned Foreign Subsidiary (by way of
capital contribution or otherwise) or make investments permitted by
subsection 8.5(b), provided that (x) the requirements of subsection 7.9
are satisfied and (y) the aggregate amount of all investments in such
Foreign Subsidiaries shall not exceed (I) $10,000,000 (net of any
dividends or distributions, or repayments or payments of interest by such
Foreign Subsidiaries to the Company or any Domestic Subsidiary), minus
(II) the amount of any Indebtedness of any Foreign Subsidiary at any such
time outstanding in accordance with subsection 8.1(c)(iii), 8.1(g) or
8.3(c)(ii), provided that such $10,000,000 amount may be increased by up
to $25,000,000 (subject to reduction as provided herein) the proceeds of
which incremental amount shall be used for (A) Capital Expenditures (which
shall be subject to subsection 8.7) for the acquisition of production
plants and/or production assets and (B) for production related costs
(including, without limitation, costs related to personnel and inventory);
(c) the Company and its Subsidiaries may invest in, acquire and hold
Cash Equivalents;
(d) the Company or any of its Subsidiaries may make payroll advances
in the ordinary course of business;
(e) the Company or any of its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms (provided that nothing in this clause (e) shall prevent the Company
or any Subsidiary from offering such concessionary trade terms, or from
receiving such investments, in connection with the bankruptcy or
reorganization of their respective suppliers or customers or the
settlement of disputes with such customers or suppliers arising in the
ordinary course of business, as management deems reasonable in the
circumstances); and
(f) the Company or any of its Subsidiaries may make travel and
entertainment advances and relocation and other loans to officers and
employees of the Company or any such Subsidiary, provided that the
aggregate principal amount of all such loans and advances outstanding at
any one time, together with the guarantees of such loans and advances made
pursuant to subsection 8.3(e), shall not exceed $5,000,000 at any one time
outstanding.
For the purposes of this subsection 8.6, the payment by the Company
of expenses and operating costs of any Subsidiary incurred in the ordinary
course of its business shall not be considered to be a loan, advance or other
investment of the Company in such Subsidiary and shall be permitted under this
Agreement.
75
8.7 Capital Expenditures. Make or commit to make any Capital
Expenditures (including acquisitions of companies engaged primarily in
businesses similar to the businesses in which the Company and its Subsidiaries
are engaged), except that the Company and its Subsidiaries may make or commit to
make Capital Expenditures not exceeding the amount set forth below (the "Base
Amount") for each of the fiscal years or periods of the Company (or other
period) set forth below:
Fiscal Year
or Period Base Amount
--------- -----------
Closing Date $19,300,000
through end of
fiscal year 1997
1998 $11,500,000
1999 $12,800,000
2000 $13,000,000
2001 $13,700,000
2002 $14,100,000
January 1, 2003 to $14,500,000
October 31, 2003
provided, however, that for any fiscal year commencing with the 1997 fiscal year
of the Company the Base Amount set forth above may be increased by a maximum of
$5,000,000 for any such fiscal year by carrying over to any such fiscal year any
portion of the Base Amount (as increased) not spent in the immediately preceding
fiscal year; provided, further, that, notwithstanding anything to the contrary
herein, additional Capital Expenditures may be made with net proceeds received
in property sales or dispositions under subsection 8.5(g).
8.8 Consolidated EBITDA. At the last day of any fiscal quarter set
forth below, commencing with the first fiscal quarter of the 1997 fiscal year of
the Company, permit Consolidated EBITDA for the period of four fiscal quarters
ending on such day to be less than the amount set forth opposite such fiscal
quarter below:
Fiscal Year Fiscal Quarter Amount
----------- -------------- ------
1997 First $28,000,000
Second $28,000,000
Third $28,500,000
Fourth $29,000,000
1998 First $29,000,000
Second $30,000,000
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Fiscal Year Fiscal Quarter Amount
----------- -------------- ------
Third $31,000,000
Fourth $32,000,000
1999 First $32,000,000
Second $33,000,000
Third $34,000,000
Fourth $37,000,000
2000 First $37,000,000
Second $38,000,000
Third $39,000,000
Fourth $42,000,000
2001 First $42,000,000
Second $43,000,000
Third $44,000,000
Fourth $45,000,000
2002 First $45,000,000
Second $46,000,000
Third $47,000,000
Fourth $50,000,000
2003 First $50,000,000
Second $51,000,000
Third $52,000,000
8.9 Debt to EBITDA. At the last day of any fiscal quarter set forth
below, commencing with the first fiscal quarter of the 1997 fiscal year of the
Company, permit the ratio of Consolidated Funded Indebtedness as of such day to
Consolidated EBITDA for the period of four fiscal quarters ending on such day to
be greater than the ratio set forth below for such fiscal quarter; provided
that, with respect to any acquisition permitted by subsection 8.7, the last four
fiscal quarters of Consolidated EBITDA (as may be adjusted for post acquisition
cost savings reasonably agreed to by the Company and the Administrative Agent)
of the acquired company shall be added for the purposes of calculating this
ratio:
Fiscal Year Fiscal Quarter Ratio
----------- -------------- -----
1997 First 5.75 to 1.00
Second 5.75 to 1.00
Third 5.75 to 1.00
Fourth 5.75 to 1.00
1998 First 5.75 to 1.00
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Fiscal Year Fiscal Quarter Ratio
----------- -------------- -----
Second 5.75 to 1.00
Third 5.50 to 1.00
Fourth 5.00 to 1.00
1999 First 5.00 to 1.00
Second 5.00 to 1.00
Third 4.75 to 1.00
Fourth 4.50 to 1.00
2000 First 4.50 to 1.00
Second 4.50 to 1.00
Third 4.00 to 1.00
Fourth 4.00 to 1.00
2001 First 4.00 to 1.00
Second 4.00 to 1.00
Third 4.00 to 1.00
Fourth 3.50 to 1.00
2002 First 3.50 to 1.00
Second 3.50 to 1.00
Third 3.50 to 1.00
Fourth 3.25 to 1.00
2003 First 3.25 to 1.00
Second 3.25 to 1.00
Third 3.25 to 1.00
8.10 Interest Coverage. At the last day of any fiscal quarter set
forth below, permit the Interest Coverage Ratio to be less than the ratio set
forth below for such fiscal quarter:
Interest
Coverage
Fiscal Year Fiscal Quarter Ratio
----------- -------------- -----
1997 First 1.50 to 1.00
Second 1.50 to 1.00
Third 1.60 to 1.00
Fourth 1.60 to 1.00
1998 First 1.60 to 1.00
Second 1.60 to 1.00
Third 1.75 to 1.00
Fourth 1.75 to 1.00
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Interest
Coverage
Fiscal Year Fiscal Quarter Ratio
----------- -------------- -----
1999 First 1.75 to 1.00
Second 1.75 to 1.00
Third 2.00 to 1.00
Fourth 2.00 to 1.00
2000 First 2.00 to 1.00
Second 2.00 to 1.00
Third 2.25 to 1.00
Fourth 2.25 to 1.00
2001 First 2.25 to 1.00
Second 2.25 to 1.00
Third 2.50 to 1.00
Fourth 2.50 to 1.00
2002 First 2.50 to 1.00
Second 2.50 to 1.00
Third 2.75 to 1.00
Fourth 2.75 to 1.00
2003 First 2.75 to 1.00
Second 2.75 to 1.00
Third 3.00 to 1.00
8.11 Limitation on Dividends. Declare any dividends on any shares of
any class of stock, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, retirement or
other acquisition of any shares of any class of stock, or any warrants or
options to purchase such stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of the Company or any of its
Subsidiaries; except that:
(a) Subsidiaries may pay dividends to the Company or to Domestic
Subsidiaries which are directly or indirectly wholly-owned by the Company;
(b) the Company may pay or make dividends or distributions to any
holder of its capital stock in the form of additional shares of Capital
Stock of the same class and type, provided such shares of Capital Stock
paid, dividended or distributed to Holdings are pledged to the
Administrative Agent for the benefit of the Lenders; and
(c) the Company may pay dividends or make other distributions:
(i) to Holdings in amounts equal to the amounts required for
Holdings to pay franchise taxes and other fees required to maintain
its
79
corporate existence and provide for other operating costs of up to
$500,000 per fiscal year;
(ii) to Holdings in amounts equal to amounts required for
Holdings to pay Federal, state and local income taxes to the extent
such income taxes are attributable to the income of the Company and
its Subsidiaries;
(iii) to Holdings in amounts equal to amounts expended by
Holdings to repurchase Capital Stock of Holdings owned by former
employees of the Company or its Subsidiaries or their assigns,
estates and heirs, provided that the aggregate amount paid, loaned
or advanced to Holdings pursuant to this clause (iii) shall not, in
the aggregate, exceed $5,000,000 per fiscal year of the Company, up
to a maximum aggregate amount of $10,000,000 during the term of this
Agreement, plus any amounts contributed by Holdings to the Company
as a result of resales of such repurchased shares of Capital Stock;
and
(iv) so long as, after giving effect thereto, no Default or
Event of Default has occurred and is continuing and the most recent
financial statements required to be delivered pursuant to subsection
7.1(b), have been delivered, the Company may pay scheduled cash
dividends on the Company Preferred Stock to enable Holdings to pay
interest at a non-default rate per annum not in excess of 14% to the
holders of the Holdings Subordinated Debt in respect of the
six-month period ended on such day (or accrued deferred interest in
respect of any prior period), provided that within 20 days Holdings
uses such dividends to pay current or accrued cash dividends or
interest on the Holdings Subordinated Debt; and
(v) if the Company is prohibited from paying cash dividends
pursuant to subsection 8.11(c)(iv) because of the occurrence of a
Default or Event of Default, the Company may pay the cash dividends
which it would have otherwise paid on its preferred stock to
Holdings on a prior date on any succeeding date to enable Holdings
to pay interest at a non-default rate per annum not in excess of 14%
to the holders of the Holdings Subordinated Debt
in respect of any prior period (or accrued deferred interest in
respect of any prior period), provided that (A) so long as, after
giving effect thereto, no Default or Event of Default has occurred
and is continuing (including compliance with the Interest Coverage
Ratio set forth in subsection 8.10 on a pro forma basis assuming
such dividends that are proposed to be paid at such time pursuant to
this clause (v) but were not paid under clause (iv) of this
subsection 8.11(c) had been paid on the last day of the most
recently ended fiscal quarter of the Company (for purposes of
calculating compliance with the Interest Coverage Ratio pursuant to
this subsection 8.11(c)(v) only, the denominator of the Interest
Coverage Ratio shall include the amount of such dividends paid in
cash by the Company to Holdings pursuant to this subsection
8.11(c)(v))), (B) the financial statements required to be delivered
in respect of
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such fiscal quarter have been delivered pursuant to subsection
7.1(b) and (C) within 20 days Holdings uses such dividends to pay
current or accrued interest on the Holdings Subordinated Debt.
8.12 Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate except for transactions
which are otherwise permitted under this Agreement and which are in the ordinary
course of the Company's or a Subsidiary's business and which are upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
would obtain in a hypothetical comparable arm's length transaction with a Person
not an Affiliate, provided, however, that nothing in this subsection 8.12 shall
prohibit the Company or its Subsidiaries from engaging in the following
transactions: (x) the performance of the Company's or any Subsidiary's
obligations under any employment contract, collective bargaining agreement,
employee benefit plan, related trust agreement or any other similar arrangement
heretofore or hereafter entered into in the ordinary course of business, (y)
payment of compensation to employees, officers, directors or consultants in the
ordinary course of business, and (z) maintenance of benefit programs or
arrangements for employees, officers or directors, including, without
limitation, vacation plans, health and life insurance plans, deferred
compensation plans, and retirement or savings plans and similar plans, in each
case, in the ordinary course of business.
8.13 Prepayments and Amendments of Subordinated Debt and Equity. (a)
Optionally prepay, retire, redeem, purchase, defease or exchange, or make any
mandatory prepayment of any Subordinated Debt (other than (x) redemption of the
Bridge Subordinated Debt with proceeds of the Permanent Subordinated Debt, (y)
any refinancing of the Permanent Subordinated Debt contemplated in the
definition thereof and (z) any redemption of Subordinated Debt with the proceeds
of the issuance of Capital Stock to the extent permitted by subsection 4.4(b))
or pay any interest on Subordinated Debt in cash if such interest may be paid by
the issuance of additional Subordinated Debt or (b) amend, supplement or
otherwise modify any documentation governing any Subordinated Debt (other than
(i) amendments to such Subordinated Debt which reduce the interest rate or
extend the maturity thereof, (ii) waivers of compliance by the Company with any
of the terms or conditions of such Subordinated Debt (except those which by
their terms run to the benefit of the Lenders) and (iii) any amendment,
supplement or modification described in clause (i) of Section 9(k)).
8.14 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Company to end on a day other than the Saturday in December or January
closest to the last day of December in any calendar year.
8.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Company or any Subsidiary is engaged on the date of this Agreement (or which
are directly related thereto).
81
SECTION 9. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following events:
(a) The Company shall fail to (i) pay any principal of any Note when
due in accordance with the terms hereof or thereof or to reimburse the
Issuing Lender in accordance with subsection 3.8 or (ii) pay any interest
on any Loan or any other amount payable hereunder within five days after
any such interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Credit
Party in any Credit Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or performance of
any agreement contained in subsection 7.7(a) or 7.9 or Section 8 of this
Agreement or Holdings shall default in the observance or performance of
any agreement contained in Section 5 of the Holdings Pledge Agreement or
the Company shall default in the observance or performance of any
agreement contained in subsections 5(a), (h) through (k) and (o) of the
Company Security Agreement or Holdings shall default in the observance or
performance of any agreement contained in Section 10 of the Holdings
Guarantee, or, with respect to any Subsidiary which becomes a Credit Party
after the Closing Date, the Company or such Subsidiary shall default in
the observance or performance of the corresponding provisions of the
pledge agreement, guarantee and security agreement to which it is a party;
or
(d) Any Credit Party shall default in the observance or performance
of any other agreement contained in any Credit Document and such default
shall continue unremedied for a period of 30 days; or
(e) The Company or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on or other amounts in respect of any
Indebtedness (other than the Loans, the L/C Obligations and any
inter-company debt) or Interest Rate Agreement or in the payment of any
Contingent Obligation, beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness, Interest Rate
Agreement or Contingent Obligation was created; or (ii) default in the
observance or performance of any other agreement or condition relating to
any such Indebtedness, Interest Rate Agreement or Contingent Obligation or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of
such Contingent Obligation (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated
maturity, any applicable grace period having expired, or such Contingent
Obligation to become payable, any
82
applicable grace period having expired; in each case, provided that the
aggregate principal amount of all such Indebtedness, Interest Rate
Agreements and Contingent Obligations under which a default exists or
which would then become due or payable equals or exceeds $5,000,000; or
(f) (i) The Company or any of its Subsidiaries or Holdings shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Company or
any of its Subsidiaries or Holdings shall make a general assignment for
the benefit of its creditors; or (ii) there shall be commenced against the
Company or any of its Subsidiaries or Holdings any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Company
or any of its Subsidiaries or Holdings any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) the Company or any of its
Subsidiaries or Holdings shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) the Company or
any of its Subsidiaries or Holdings shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Company or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan, and such event or condition, together with all other
such events or
83
conditions, relating to a Plan, if any, would be reasonably likely to
subject the Company or any of its Subsidiaries to any tax, penalty or
other liabilities in the aggregate material in relation to the business,
assets, condition (financial or otherwise) or results of the Company and
its Subsidiaries taken as a whole; or
(h) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $5,000,000 or more and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within the time required by the terms of such
judgment; or
(i) Any Credit Document shall cease, for any reason, to be in full
force and effect or any Credit Party or any of its Subsidiaries shall so
assert in writing, or any Pledge Agreement, or Security Agreement shall
cease to be effective to grant a perfected Lien on the collateral
described therein with the priority purported to be created thereby (other
than as a result of any action or inaction on the part of the
Administrative Agent or the Lenders), subject to such exceptions as may be
permitted therein, and in the case of any Security Agreement such
condition shall continue unremedied for 30 days after notice thereof to
the Company by the Administrative Agent or any Lender; or
(j) There shall have occurred a Change in Control; or
(k) (i) There shall have occurred any amendment, supplement or other
modification of the Bridge Subordinated Debt Documents or the Bridge
Subordinated Debt, or any other Subordinated Debt or the documents
governing such Subordinated Debt, which in any such case shall not have
been consented to in advance in writing by the Administrative Agent and
the Required Lenders, except (A) as otherwise expressly permitted by
subsection 8.13 or (B) to the extent such amendment, supplement or
modification gives effect to any prepayment, retirement or redemption of
Subordinated Debt expressly permitted by this Agreement or (ii) the
subordination provisions of any Bridge Subordinated Debt Document or any
document governing any Subordinated Debt shall cease, for any reason, to
be valid or any Credit Party or any of its Subsidiaries shall so assert in
writing; or
(l) Holdings shall at any time engage in any business or activity
other than the owning of Capital Stock of the Company and any actions
reasonably incidental thereto;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Company,
automatically (i) the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes shall immediately become due and payable, and (ii) all
obligations of the Company in respect of the Letters of Credit, although
contingent and unmatured, shall become immediately due and payable and the
Issuing
84
Lender's obligations to issue the Letters of Credit shall immediately terminate
and (b) if such event is any other Event of Default, so long as any such Event
of Default shall be continuing, either or both of the following actions may be
taken: (i) with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Company, declare the Commitments and the Issuing
Lender's obligations to issue the Letters of Credit to be terminated forthwith,
whereupon the Commitments and such obligations shall immediately terminate; and
(ii) with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice of default to the Company, (A) declare all or a portion of the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable, and (B) declare all or a portion of
the obligations of the Company in respect of the Letters of Credit, although
contingent and unmatured, to be due and payable forthwith, whereupon the same
shall immediately become due and payable and/or demand that the Company
discharge any or all of the obligations supported by the Letters of Credit by
paying or prepaying any amount due or to become due in respect of such
obligations. All payments under this Section 9 on account of undrawn Letters of
Credit shall be made by the Company directly to a cash collateral account
established by the Administrative Agent for such purpose for application to the
Company's reimbursement obligations under subsection 3.8 as drafts are presented
under the Letters of Credit, with the balance, if any, to be applied to the
Company's obligations under this Agreement and the Notes as the Administrative
Agent shall determine with the approval of the Required Lenders. Except as
expressly provided above in this Section 10, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT; THE ISSUING LENDER
10.1 Appointment. Each Lender hereby irrevocably designates and
appoints Chase as the Administrative Agent, Bankers Trust Company as the
Syndication Agent, and Xxxxxxx Xxxxx Credit Partners L.P. as the Documentation
Agent under this Agreement and irrevocably authorizes Chase as Administrative
Agent, Bankers Trust Company as Syndication Agent, and Xxxxxxx Xxxxx Credit
Partners L.P. as Documentation Agent for such Lender, to take such action on its
behalf under the provisions of the Credit Documents and to exercise such powers
and perform such duties as are expressly delegated to the Administrative Agent,
the Syndication Agent, and the Documentation Agent by the terms of the Credit
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent, the Syndication Agent, and the Documentation Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into the Credit Documents or otherwise exist against the Administrative Agent,
the Syndication Agent, and the Documentation Agent.
85
10.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and each of the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care, except as otherwise
provided in subsection 10.3.
10.3 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with the Credit Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Credit Party or any
officer thereof contained in the Credit Documents or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, the Credit Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of the Credit Documents or for any failure of any Credit Party to perform its
obligations thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, any Credit
Document, or to inspect the properties, books or records of any Credit Party.
10.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, entries maintained in the Register, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Credit Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, where a higher percentage of the Lenders is expressly required hereunder,
such Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any Credit Document in accordance with a request
of the Required Lenders (unless a higher percentage of Lenders is expressly
required), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
10.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder
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unless the Administrative Agent has received written notice from a Lender or the
Company or any other Credit Party referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall promptly give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of the
Credit Parties, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of Holdings, AcquisitionCo and the Company and
its Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under the Credit Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of Holdings, AcquisitionCo
and the Company and its Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Credit Parties which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Credit Parties and without limiting the obligation of the Credit Parties to
do so), ratably according to the respective amounts of their respective
Commitments (or, to the extent such Commitments have been terminated, according
to the respective outstanding principal amounts of the Loans and the L/C
Obligations and the respective obligations, whether as Issuing Lender or a
Participating Lender, under the Letter of Credit), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following
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the payment of the Loans) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of the Credit
Documents or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection 10.7 shall survive the repayment of the Loans and all other amounts
payable hereunder.
10.8 The Administrative Agent in its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with Holdings, the Company and its
Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, the Administrative Agent shall have the same rights and powers,
duties and liabilities under the Credit Documents as any Lender and may exercise
the same as though it were not the Administrative Agent and the terms "Lender"
and "Lenders" shall include the Administrative Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under the Credit
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders which successor agent shall, so long as no Event
of Default has occurred and is continuing, be approved by the Company, which
shall not unreasonably withhold its approval, whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Agent under the
Credit Documents.
10.10 Issuing Lender as Issuer of Letters of Credit. Each Lender
which is a holder of a Revolving Credit Commitment (collectively "Revolving
Credit Lenders") hereby acknowledges that the provisions of this Section 10
shall apply to the Issuing Lender, in its capacity as issuer of the Letters of
Credit, in the same manner as such provisions are expressly stated to apply to
the Administrative Agent, except that obligations to indemnify the Issuing
Lender shall be ratable among the Revolving Credit Lenders in accordance with
their respective Revolving Credit Commitments (or, if the Revolving Credit
Commitments have been terminated, the outstanding principal amount of their
respective Revolving Credit Loans and L/C Obligations and their respective
participating interests in the outstanding Letters of Credit).
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SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Except as otherwise expressly set forth
in this Agreement, no Credit Document nor any terms thereof may be amended,
supplemented, waived or modified except in accordance with the provisions of
this subsection 11.1. With the written consent of the Required Lenders, the
Administrative Agent and the respective Credit Parties or their Subsidiaries
may, from time to time, enter into written amendments, supplements or
modifications hereto for the purpose of adding any provisions to any Credit
Document to which they are parties or changing in any manner the rights of the
Lenders or of any such Credit Party or its Subsidiaries thereunder or waiving,
on such terms and conditions as the Administrative Agent may specify in such
instrument, any of the requirements of any such Credit Document or any Default
or Event of Default and its consequences; provided, however, that:
(a) no such waiver and no such amendment, supplement or modification
shall release collateral not required or permitted by any Credit Document
to be released and which, in the aggregate with all other collateral
released pursuant to this clause (a) (other than collateral released
pursuant to the proviso to this clause (a)) during the calendar year in
which such proposed release would be effected and the immediately
preceding calendar year, has fair market value on the proposed date of
release in excess of 20% of the fair market value of all collateral
(including any Guarantee) on such date without the written consent of the
Supermajority Lenders; provided that, notwithstanding the foregoing, this
clause (a) shall not be applicable to and no consent shall be required for
(i) releases of collateral in connection with any Asset Sales permitted by
subsection 8.5 as in effect on the Closing Date, (ii) releases of
collateral in accordance with subsection 11.11 or (iii) upon the
reincorporation of the Company or any Subsidiary in a new jurisdiction or
the creation of a new Subsidiary of the Company, any release of collateral
in connection with the transfer of such released collateral to such
reincorporated entity or new Subsidiary in compliance with subsection 8.4,
provided that the Administrative Agent, in its sole discretion, determines
that such release and transfer, together with any grant and perfection of
a new Lien therein in favor of the Administrative Agent, will cause no
material impairment of the value of the collateral taken as a whole, after
giving effect to such release and transfer;
(b) no such waiver and no such amendment, supplement or modification
shall extend the final maturity date of any Note or the scheduled payment
date of any installment of any Loan, or reduce the rate or extend the time
of payment of interest thereon, or change the method of calculating
interest thereon, or reduce any fee payable to the Lenders hereunder, or
reduce the principal amount thereof, or change the amount of any Lender's
Commitment or Commitment Percentage, or amend, modify or waive any
provision of subsection 4.9(b) or this subsection 11.1 or reduce the
percentage specified in the definition of Required Lenders or reduce the
percentage specified in the definition of Supermajority Lenders or consent
to the assignment or transfer by any Credit Party of any of its rights and
obligations under any Credit
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Document, in each case, without the prior written consent of each Lender
directly affected thereby;
(c) no such waiver and no such amendment, supplement or modification
affecting the then Administrative Agent or Issuing Lender shall amend,
modify or waive any provision of Section 10 without the written consent of
such Administrative Agent and Issuing Lender;
(d) without the consent of each of the Lenders which are Revolving
Credit Lenders only, each of the Lenders which are holders of the Term
Loan Notes may amend this Agreement and the Term Loan Notes to extend the
maturities of the installments of the Term Loans, and without the consent
of each of the Lenders which are holders of the Term Loans only, the
Revolving Credit Lenders may amend this Agreement and the Revolving Credit
Notes to extend the Revolving Credit Termination Date; and
(e) no such waiver, and no such amendment, supplement or
modification shall amend, modify or waive the prepayment requirements
specified in subsection 4.4(b)(i), (ii) and (iii) or the order of
application of prepayments specified in subsection 4.4(a) or 4.4(b)(v)
without the written consent of the holders of at least 51% of each of (i)
the aggregate unpaid principal amount of the Term Loans, if any, and (ii)
the Revolving Credit Commitments or, if the Revolving Credit Commitments
are terminated, the aggregate unpaid principal amount of the Revolving
Credit Loans (the Term Loans and the Revolving Credit Commitments of any
Non-Funding Lender to be disregarded in determining such percentage at any
time);
any such waiver and any such amendment, supplement or modification described in
this subsection 11.1 shall apply equally to each of the Lenders and shall be
binding upon each Credit Party and its Subsidiaries, the Lenders, the Agents and
the Issuing Lender and all future holders of the Notes and the Loans. Any
extension of a Letter of Credit by the Issuing Lender shall be treated hereunder
as a new Letter of Credit. In the case of any waiver, the Credit Parties, the
Lenders, the Agents and Issuing Lender shall be restored to their former
position and rights hereunder and under the outstanding Notes, and any Default
or Event of Default waived shall be deemed to be cured and not continuing; but
no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex, if one is listed), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when sent, confirmation of receipt received, or,
in the case of telex notice, when sent, answerback received, addressed as
follows in the case of the Company, the Administrative Agent, and as set forth
in Schedule I in the
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case of any Lender, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:
The Company: The Xxxxxxx Xxxxxx Company
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
With a copy to: Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
The Administrative Agent: The Chase Manhattan Bank
0000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Xx.
Telecopy: (000) 000-0000
With a copy to: Chase Securities Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
With a copy to: The Chase Manhattan Bank Agent Bank
Services
0 Xxxxx Xxxxxxxxx Xxxxx, 0xx floor
New York, New York 10081
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsections 3.4, 3.5, 4.1, 4.2, 4.3 and 4.4 shall not
be effective until received and provided that the failure to provide the copies
of notices to the Company provided for in this subsection 11.2 shall not result
in any liability to the Administrative Agent.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights,
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remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Letters of Credit and the Notes.
11.5 Payment of Expenses and Taxes. The Company agrees (a) to pay or
reimburse the Agents, the Advisor and the Arrangers for all their reasonable
out-of-pocket costs and expenses incurred in connection with the development,
negotiation, preparation and execution of the Credit Documents and any other
documents prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of one counsel to the Agents, the Advisor and
the Arrangers (b) to pay or reimburse all of the reasonable expenses, including
without limitation, reasonable fees and expenses of counsel, incurred by the
Administrative Agent in connection with the administration of the Facilities or
in connection with any amendments, waivers, work-outs or restructurings in
respect thereof, (c) to pay or reimburse the Agents, the Advisor, the Arrangers
and each Lender for all their costs and expenses incurred in connection with,
and to pay, indemnify, and hold the Agents, the Advisor, the Arrangers and each
Lender harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever arising out of or in connection
with, the enforcement or preservation of any rights under any Credit Document
and any such other documents, including, without limitation, reasonable fees and
disbursements of counsel to the Agents, the Advisor, the Arrangers and each
Lender incurred in connection with the foregoing and in connection with advising
the Administrative Agent with respect to its rights and responsibilities under
this Agreement and the documentation relating thereto, (d) to pay, indemnify,
and to hold the Administrative Agent and each Lender harmless from any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes (other
than withholding taxes), if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation of any
of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, any Credit
Document and any such other documents, and (e) to pay, indemnify, and hold the
Agents, the Arrangers, the Advisor, the Issuing Bank and each Lender and their
respective Affiliates, officers, directors and trustees harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including, without limitation, reasonable fees and
disbursements of counsel) which may be incurred by or asserted against the
Agents, the Arrangers, the Advisor, the Issuing Bank or the Lenders or such
Affiliates, officers, directors or trustees (x) arising out of or in connection
with any investigation, litigation or proceeding related to this Agreement, the
other Credit Documents, the proceeds of the Loans or the Subordinated Debt and
the transactions contemplated by or in respect of such use of proceeds, or any
of the other transactions contemplated hereby, whether or not the Agents, the
Arrangers, the Advisor, the Issuing Bank
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or any of the Lenders or such Affiliates, officers, directors or trustees is a
party thereto, including, without limitation, any of the foregoing relating to
the violation of, noncompliance with or liability under, any Environmental Law
applicable to the Company, any of its Subsidiaries or any of the facilities and
properties owned, leased or operated by the Company or any of its Subsidiaries,
or (y) without limiting the generality of the foregoing, by reason of or in
connection with the execution and delivery or transfer of, or payment or failure
to make payments under, Letters of Credit (it being agreed that nothing in this
subsection 11.5(d)(y) is intended to limit the Company's obligations pursuant to
subsection 3.8) (all the foregoing, collectively, the "indemnified
liabilities"), provided that the Company shall have no obligation hereunder with
respect to indemnified liabilities of the Agents, the Arrangers, the Advisor,
the Issuing Bank or any Lender or any of their respective Affiliates, officers,
directors and trustees arising from (i) the gross negligence or willful
misconduct of the person seeking indemnification or (ii) legal proceedings
commenced against the Agents, the Arrangers, the Advisor, the Issuing Bank or
Lender by any security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its capacity as
such or (iii) legal proceedings commenced against the Agents, the Arrangers, the
Advisor, the Issuing Bank or any such Lender by any Transferee (as defined in
subsection 11.6). Without limiting the foregoing, and to the extent permitted by
applicable law, the Company agrees not to assert, and hereby waives (and shall
cause the Subsidiaries not to assert and to waive) all rights for contribution
or any other rights of recovery with respect to all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, under or related to
Environmental Laws, that any of them might have by statute or otherwise against
the Agents, the Arrangers, the Advisor, the Issuing Lender or any Lender. The
agreements in this subsection 11.5 shall survive repayment of the Loans and all
other amounts payable hereunder.
11.6 Successors and Assigns; Participations and Assignments. (a)
This Agreement shall be binding upon and inure to the benefit of the Company,
the Lenders, the Agents, all future holders of the Notes and the Loans, and
their respective successors and assigns, except that the Company may not assign
or transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
or lending business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("Participants") participating interests in
any Loan owing to such Lender, any participating interest in the Letters of
Credit of such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder. In the event of any such
sale by a Lender of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement and Holdings, the Company and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Credit Documents. The Company agrees that if amounts outstanding under
this Agreement and the Notes are due and unpaid, or shall have been declared or
shall
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have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement or any Note; provided, that such right of
setoff shall be subject to the obligation of such Participant to share with the
Lenders, and the Lenders agree to share with such Participant, as provided in
subsection 11.7. The Company also agrees that each Participant shall be entitled
to the benefits of subsections 3.10, 4.11 and 4.12 with respect to its
participation in the Letters of Credit and in the Commitments and the Loans
outstanding from time to time as if it were a Lender; provided, that no
Participant shall be entitled to receive any greater amount pursuant to any such
subsection than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred. Each Lender agrees that the
participation agreement pursuant to which any Participant acquires its
participating interest (or any other document) may afford voting rights to such
Participant, or any right to instruct such Lender with respect to voting
hereunder, only with respect to matters requiring the consent of either all of
the Lenders hereunder or all of the Lenders holding the relevant Term Loans or
Revolving Credit Commitments subject to such participation.
(c) Subject to paragraph (g) of this subsection 11.6, any Lender
may, in the ordinary course of its commercial banking, lending or investment
business and in accordance with applicable law, (i) at any time and from time to
time assign all or any part of its rights and obligations under this Agreement
and the Notes to any Lender or any Affiliate thereof, provided that, in the
event of a sale of less than all of such rights and obligations, such assigning
Lender after any such sale to any other Lender or any Affiliate of such Lender
shall retain Commitments and/or Loans and/or L/C Participating Interests
aggregating at least $5,000,000 (or such lesser amount as the Administrative
Agent may determine) and (ii) with the consent of the Company and the
Administrative Agent (which in each case shall not be unreasonably withheld or
delayed) at any time and from time to time assign to one or more additional
banks, mutual funds or financial institutions or entities (each, an "Assignee"),
all or any part of its rights and obligations under this Agreement and the
Notes, pursuant to an Assignment and Acceptance, executed by such Assignee, such
transferor Lender (and, in the case of an Assignee that is not then a Lender or
an Affiliate thereof, by the Company and the Administrative Agent), and
delivered to the Administrative Agent for its acceptance and recording in the
Register (as defined below); provided that (A) each such sale pursuant to clause
(ii) of this subsection 11.6(c) shall be in a principal amount of $5,000,000 or
more unless the Assigning Lender is transferring all of its rights and
obligations and (B) in the event of a sale of less than all of such rights and
obligations, such Lender after any such sale shall retain Commitments and/or
Loans and/or L/C Participating Interests aggregating at least $5,000,000 (or
such lesser amount as the Administrative Agent and the Company may determine).
Upon such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent of the interest
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transferred, as reflected in such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of a Assignment and
Acceptance covering all or the remaining portion of a transferor Lender's rights
and obligations under this Agreement, such transferor Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of the
indemnification provisions set forth in subsection 11.5).
(d) The Administrative Agent, which for purposes of this subsection
11.6(d) only shall be deemed to be the agent of the Company, shall maintain at
the address of the Administrative Agent referred to in subsection 11.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Company, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as the owner of a Loan
or other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding any notice to the
contrary. Any assignment of any Loan or other obligation hereunder shall be
effective only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an Affiliate thereof, by the Company and the Administrative
Agent), together with payment to the Administrative Agent of a registration and
processing fee of $4,000 if the Assignee is not a Lender prior to the execution
of such supplement and $1,000 otherwise, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Company. On or prior to such effective date, the Company at its own expense,
shall execute and deliver to the Administrative Agent (in exchange for any or
all of the Term Loan Notes or Revolving Credit Notes of the assigning Lender, if
any) new Term Loan Notes or Revolving Credit Notes, as the case may be, to the
order of such Assignee (if requested) in an amount equal to the Revolving Credit
Commitment or the Term Loans, as the case may be, assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
or any Term Loans hereunder, new Term Loan Notes or Revolving Credit Notes, as
the case may be, to the order of the assigning Lender in an amount equal to the
Commitment or such Term Loans, as the case may be, retained by it hereunder (if
requested). Such new Notes shall be dated the Closing Date and shall otherwise
be in the form of the Notes replaced thereby.
(f) The Lenders agree that they will use reasonable efforts to
protect the confidentiality of any confidential information concerning Holdings,
the Company and its Subsidiaries and Affiliates. Notwithstanding the foregoing,
the Company authorizes each Lender to disclose to any Participant or Assignee
(each, a "Transferee") and any prospective
95
Transferee any and all information in such Lender's possession concerning
Holdings, the Company and its Subsidiaries which has been delivered to such
Lender by or on behalf of Holdings or the Company pursuant to this Agreement or
which has been delivered to such Lender by or on behalf of Holdings, or the
Company in connection with such Lender's credit evaluation of Holdings, the
Company and its Subsidiaries prior to becoming a party to this Agreement;
provided that each Lender shall cause its respective prospective Transferees to
agree in writing to protect the confidentiality of any confidential information
concerning Holdings, the Company and its Subsidiaries and Affiliates.
(g) If, pursuant to this subsection 11.6, any interest in this
Agreement or any Note is transferred to any Transferee which is organized under
the laws of any jurisdiction other than the United States or any State thereof,
the transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer either (1) in the case of a Transferee that is a
"bank" within the meaning of Section 881(c)(3)(A) of the Code, (i) to represent
to the transferor Lender (for the benefit of the transferor Lender, the
Administrative Agent and the Company) that under applicable law and treaties no
taxes will be required to be withheld by the Administrative Agent, the Company
or the transferor Lender with respect to any payments to be made to such
Transferee in respect of the Loans or L/C Participating Interests, (ii) to
furnish to the transferor Lender (and, in the case of any Transferee registered
in the Register, the Administrative Agent and the Company) either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein
such Transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (iii) to agree (for the
benefit of the transferor Lender, the Administrative Agent and the Company) to
provide the transferor Lender (and, in the case of any Transferee registered in
the Register, the Administrative Agent and the Company) a new Form 4224 or Form
1001 upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and regulations
and amendments duly executed and completed by such Transferee, and to comply
from time to time with all applicable U.S. laws and regulations with regard to
such withholding tax exemption or (2) in the case of any Transferee that is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (i) to
represent to the transferor Lender (for the benefit of the transferor Lender,
the Administrative Agent and the Company) that it is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (ii) to furnish to the transferor
Lender (and, in the case of any Transferee registered in the Register, to the
Company), with a copy to the Administrative Agent, (A) a Subsection 5.11(d)(2)
Certificate and (B) two (2) accurate and complete original signed copies of
Internal Revenue Service Form W-8, certifying to such Transferee's legal
entitlement on the date of the effectiveness of such transfer to an exemption
from U.S. withholding tax under the provisions of Section 881(c) of the Code
with respect to all payments to be made under this Agreement, and (iii) to agree
(for the benefit of the transferor Lender, the Administrative Agent and the
Company), to the extent legally entitled to do so, upon reasonable request by
the transferor Lender (or, in the case of any Transferee registered in the
Register, the Administrative Agent or the Company), to provide to the transferor
Lender, the Administrative Agent and the Company such other forms as may be
required to establish the legal entitlement of such Transferee to an exemption
from withholding tax with respect to payments under this Agreement.
96
(h) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
11.7 Adjustments; Set-off. (a) If any Lender (a "benefitted Lender")
shall at any time receive any payment of all or part of any of its Loans or L/C
Participating Interests, as the case may be, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in clause (f) of
Section 9, or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of such other
Lender's Loans or L/C Participating Interests, as the case may be, or interest
thereon, such benefitted Lender shall purchase for cash from the other Lenders
such portion of each such other Lender's Loans or L/C Participating Interests,
as the case may be, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Company agrees that each Lender so purchasing a portion of another Lender's
Loans and/or L/C Participating Interests may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion. The
Administrative Agent shall promptly give the Company notice of any set-off,
provided that the failure to give such notice shall not affect the validity of
such set-off.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Company,
any such notice being expressly waived by the Company to the extent permitted by
applicable law, upon the filing of a petition under any of the provisions of the
federal bankruptcy code or amendments thereto, by or against; the making of an
assignment for the benefit of creditors by; the application for the appointment,
or the appointment, of any receiver of, or of any substantial portion of the
property of; the issuance of any execution against any substantial portion of
the property of; the issuance of a subpoena or order, in supplementary
proceedings, against or with respect to any substantial portion of the property
of; or the issuance of a warrant of attachment against any substantial portion
of the property of; the Company to set off and apply against any indebtedness,
whether matured or unmatured, of the Company to such Lender, any amount owing
from such Lender to the Company, at or at any time after, the happening of any
of the above mentioned events, and as security for such indebtedness, the
Company hereby grants to each Lender a continuing security interest in any and
all deposits, accounts or moneys of the Company then or thereafter maintained
with such Lender, subject in each case to subsection 11.7(a) of this Agreement.
The aforesaid right of set-off may be exercised by such Lender against the
Company or against any trustee in bankruptcy, debtor in possession, assignee for
the benefit of creditors, receiver or execution, judgment or attachment
97
creditor of the Company, or against anyone else claiming through or against the
Company or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition; assignment for the
benefit of creditors; appointment or application for the appointment of a
receiver; or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the Company and the Administrative Agent after any
such set-off and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
11.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Administrative Agent. This Agreement
shall become effective with respect to the Company, the Agents and the Lenders
when the Administrative Agent shall have received copies of this Agreement
executed by the Company, the Agents and the Lenders, or, in the case of any
Lender, shall have received telephonic confirmation from such Lender stating
that such Lender has executed counterparts of this Agreement or the signature
pages hereto and sent the same to the Administrative Agent.
11.9 Governing Law; No Third Party Rights. This Agreement and the
Notes and the rights and obligations of the parties under this Agreement and the
Notes shall be governed by, and construed and interpreted in accordance with,
the law of the State of New York. This Agreement is solely for the benefit of
the parties hereto and their respective successors and assigns, and, except as
set forth in subsection 11.6, no other Persons shall have any right, benefit,
priority or interest under, or because of the existence of, this Agreement.
11.10 Submission to Jurisdiction; Waivers. (a) Each party to this
Agreement hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any of the other Credit
Documents, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially
98
similar form of mail), postage prepaid, to such party at its address set
forth in subsection 11.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction.
(b) Each party hereto unconditionally waives trial by jury in any
legal action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
11.11 Releases. The Administrative Agent and Lenders agree to
cooperate with the Company and its Subsidiaries with respect to any sale or
other disposition permitted by subsection 8.5 and promptly take such action and
execute and deliver such instruments and documents necessary to release the
liens and security interests created by the Security Documents relating to any
of the assets or property affected by any such sale permitted by subsection 8.5.
including, without limitation, any Uniform Commercial Code amendment, release or
termination or partial release or termination statements.
11.12 Interest. Each provision in this Agreement and each other
Credit Document is expressly limited so that in no event whatsoever shall the
amount paid, or otherwise agreed to be paid, by the Company for the use,
forbearance or detention of the money to be loaned under this Agreement or any
other Credit Document or otherwise (including any sums paid as required by any
covenant or obligation contained herein or in any other Credit Document which is
for the use, forbearance or detention of such money), exceed that amount of
money which would cause the effective rate of interest to exceed the highest
lawful rate permitted by applicable law (the "Highest Lawful Rate"), and all
amounts owed under this Agreement and each other Credit Document shall be held
to be subject to reduction to the effect that such amounts so paid or agreed to
be paid which are for the use, forbearance or detention of money under this
Agreement or such other Credit Document shall in no event exceed that amount of
money which would cause the effective rate of interest to exceed the Highest
Lawful Rate. Notwithstanding any provision in this Agreement or any other Credit
Document to the contrary, if the maturity of the Loans or the obligations in
respect of the other Credit Documents are accelerated for any reason, or in the
event of any prepayment of all or any portion of the Loans or the obligations in
respect of the other Credit Documents by the Company or in any other event,
earned interest on the Loans and such other obligations of the Company may never
exceed the Highest Lawful Rate, and any unearned interest otherwise payable on
the Loans or the obligations in respect of the other Credit Documents that is in
excess of the Highest Lawful Rate shall be cancelled automatically as of the
date of such acceleration or prepayment or other such event and (if theretofore
paid) shall, at the option of the holder of the Loans or such other obligations,
be either refunded to the Company or credited on the principal of the Loans. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Rate, the Company and the Lenders shall,
to the maximum extent permitted by applicable law, amortize, prorate, allocate
and spread, in equal parts during the period of the actual term of this
Agreement, all
99
interest at any time contracted for, charged, received or reserved in connection
with this Agreement.
11.13 Special Indemnification. Notwithstanding any provision in this
Agreement to the contrary, (A) each Lender, or Transferee of any Lender pursuant
to subsection 11.6(g) of this Agreement, shall indemnify the Company and the
Administrative Agent, and hold each of them harmless against any and all
payments, expenses or taxes which the Company or the Administrative Agent may
become subject to or obligated to pay if and to the extent that, (i) on the
Closing Date or the effective date of transfer, as the case may be, such Lender,
or such Transferee of a Lender pursuant to subsection 11.6(g) of this Agreement,
(a) makes the representation and covenants set forth in subsection 4.11(d)(2) of
this Agreement, or, in the case of a Transferee, pursuant to subsection
11.6(g)(2) of this Agreement and the Assignment and Acceptance, and (b) is not
in fact also qualified to make the representation and covenants set forth in
subsection 4.11(d)(1) of this Agreement or, in the case of a Transferee,
pursuant to subsection 11.6(g)(2) of this Agreement and the Assignment and
Acceptance, and (ii) as a result of any Change in Law or compliance by such
Lender, or Transferee, with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority the Company
or the Administrative Agent is required to make any additional payments on
account of U.S. withholding taxes and amounts related thereto with respect to
any payments under this Agreement, any Note, or a Eurodollar Loan, made prior to
such Change in Law or request or directive, none of which payments would have
been required if such Lender, or Transferee, was qualified on the Closing Date
or the date of the transfer, as the case may be, to make the representation and
covenants set forth in subsection 4.11(d)(1) of this Agreement or pursuant to
subsection 11.6(g)(1) of this Agreement and the Assignment and Acceptance, as
the case may be, and (B) each Lender, or Transferee, agrees that to the extent
any amount payable by such Lender or Transferee pursuant to this subsection
11.13 remains unpaid on any Interest Payment Date or the date on which any
prepayment is made, the Company shall have the right to set-off against any
payment due to such Lender or Transferee on such date any amounts owing to the
Company pursuant to this subsection 11.13.
11.14 Permitted Payments and Transactions. Notwithstanding any
provision to the contrary contained in this Agreement, the Company and its
Subsidiaries shall be permitted to pay fees and expenses pursuant to or in
respect of, the following agreements, and, in the case of clauses (a) and (d)
below, to engage in the following transactions: (a)(i) the Agreement for
Management Advisory, Strategic Planning and Consulting Services between
Investcorp International, Inc. ("III") and the Company dated as of October 30,
1996, (ii) the Financing Advisory Agreement between III and the Company dated as
of October 30, 1996, (iii) the Letter Agreement relating to Mergers and
Acquisitions Advisory Services between III and the Company dated October 30,
1996, (iv) the Senior Debt Standby Commitment Agreement between the Company and
Invifin S.A. dated as of October 30, 1996, (v) the Merger Agreement and (vi)
dividends set forth on Schedule 5.1(b) hereto; (b) agreements with any Person or
Persons providing for the payment of customary fees in connection with serving
as a director of the Company or any Subsidiary of the Company; (c) agreements
providing for the payment of commercially reasonable fees in connection with any
permitted
100
financing, refinancing, sale, transfer, sale and leaseback or other permitted
disposition of any assets of the Company or its Subsidiaries; (d) the borrowing
of any Indebtedness to the extent, and upon the terms and conditions, the same
is expressly permitted under subsection 8.1; and (e) agreements providing for
commercially reasonable fees in connection with any permitted purchase or
acquisition of stock or assets by the Company or any of its Subsidiaries.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
TWCC ACQUISITION CORP.
By: /s/
------------------------------------
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent, Issuing Lender
and a Lender
By /s/
-------------------------------------
Title:
BANKERS TRUST COMPANY, as Syndication
Agent and as a Lender
By: /s/
------------------------------------
Title:
XXXXXXX XXXXX CREDIT PARTNERS L.P., as
Documentation Agent and as a Lender
By: /s/
------------------------------------
Title:
THE FIRST NATIONAL BANK OF BOSTON
By: /s/
------------------------------------
Title:
FIRST UNION NATIONAL BANK
By: /s/
------------------------------------
Title:
PROTECTIVE LIFE INSURANCE COMPANY
By: /s/
------------------------------------
Title:
FLEET BANK, N.A.
By: /s/
------------------------------------
Title:
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/
------------------------------------
Title:
PRIME INCOME TRUST
By: /s/
------------------------------------
Title:
XXXXXXX XXXXX SENIOR FLOATING RATE
FUND, INC.
By: /s/
------------------------------------
Title:
Schedule 1 to the
Credit Agreement
Lenders, Addresses and Commitments
Revolving Credit Term Loan
Commitment Commitment Total
---------------- -------------- ---------------
THE CHASE MANHATTAN BANK $ 9,500,000.00 $21,000,000.00 $ 30,500,000.00
0000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn. Xxxxxx X. Xxxxxxxxx, Xx
Telecopy: 000-000-0000
BANKERS TRUST COMPANY $ 8,500,000.00 -- $ 8,500,000.00
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn. Xxxxx Xxxxxxx
Telecopy: 000-000-0000
XXXXXXX XXXXX CREDIT PARTNERS L.P. $ 8,000,000.00 -- $ 8,000,000.00
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn. Xxxxxxxxxxx X. Xxxxxx
Telecopy: 000 000-0000
FIRST UNION NATIONAL BANK OF NORTH $ 8,000,000.00 -- $ 8,000,000.00
CAROLINA
One First Union Center
000 X. Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
Attn. Xxxxxx Xxxxxxx
Telecopy: 000-000-0000
THE FIRST NATIONAL BANK OF BOSTON $ 8,000,000.00 -- $ 8,000,000.00
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn. Xxxxxxxx X. Xxxxxx
Telecopy: 000-000-0000
FLEET BANK, N.A. AGRICOLE $ 8,000,000.00 -- $ 8,000,000.00
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn. Xxxx Xxxx
Telecopy: 000-000-0000
Revolving Credit Term Loan
Commitment Commitment Total
---------------- -------------- ---------------
XXX XXXXXX AMERICAN CAPITAL -- $ 8,000,000.00 $ 8,000,000.00
PRIME RATE INCOME TRUST
c/o Xxx Xxxxxx American Capital
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn. Xxxxx Xxxxxx
Telecopy: 000-000-0000
XXXXXXX XXXXX SENIOR FLOATING RATE -- $ 7,000,000.00 $ 7,000,000.00
FUND, INC
000 Xxxxxxxx Xxxx Xxxx
Xxxx 0X
Xxxxxxxxxx, XX 00000
Attn. Xxxxxxx Xxxxxxxx
Telecopy: 000-000-0000
PRIME INCOME TRUST -- $ 7,000,000.00 $ 7,000,000.00
Xxx Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn. Xxxxxx Xxxxxxx
Telecopy: 000-000-0000
PROTECTIVE LIFE INSURANCE COMPANY -- $ 7,000,000.00 $ 7,000,000.00
Two Galleria Tower
00000 Xxxx Xxxx-XX #00
Xxxxxx, Xx 00000
Attn. Xxxx Xxxxx
Telecopy: 000-000-0000
Total Allocation $50,000,000.00 $50,000,000.0$ $100,000,000.00
EXHIBIT A
TO THE
CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$__________ New York, New York
___________, 1996
FOR VALUE RECEIVED, the undersigned, TWCC ACQUISITION CORP., a
Massachusetts corporation (the "Company"), hereby promises to pay to the order
of ________________ (the "Lender") on the Revolving Credit Termination Date, as
defined in the Credit Agreement referred to below, at the office of The Chase
Manhattan Bank, located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful
money of the United States of America and in immediately available funds, the
principal amount of the lesser of (a) _______________ DOLLARS ($__________) and
(b) the aggregate unpaid principal amount of all Revolving Credit Loans made by
the Lender to the Company pursuant to subsection 3.1 of the Credit Agreement
defined below. The Company further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time from the date
hereof at the rates, and on the dates, specified in subsection 4.5 of such
Credit Agreement. The holder of this Note is authorized to record the Borrowing
Date, Type and amount of each Revolving Credit Loan made by the Lender pursuant
to subsection 3.1 of the Credit Agreement, the date and amount of each payment
or prepayment of principal hereof, and the date of each interest rate conversion
or continuation pursuant to subsection 4.2 of the Credit Agreement and the
principal amount subject thereto, on the schedules annexed hereto and made a
part hereof and any such recordation shall constitute prima facie evidence of
the accuracy of the information so recorded; provided, however, that the failure
of the Lender to make any such recordation (or any error in such recordation)
shall not affect the obligations of the Company hereunder or under the Credit
Agreement.
This Note is one of the Revolving Credit Notes referred to in the
Credit Agreement dated as of ___________, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Company, the Lender, the several other banks and financial institutions from
time to time parties thereto, and The Chase Manhattan Bank, as administrative
agent, is subject to the provisions thereof and is subject to optional and
mandatory prepayment in whole or in part as provided therein. Terms used herein
which are defined in the Credit Agreement shall have such defined meanings
unless otherwise defined herein or unless the context otherwise requires.
2
This Note is secured and guaranteed as provided in the Security
Documents and the Guarantees. Reference is hereby made to the Security Documents
and the Guarantees for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
guarantees, the terms and conditions upon which the security interest and each
guarantee was granted and the rights of the holder of this Note in respect
thereof. The undersigned hereby agrees to pay all costs and expenses incurred by
the Lender in connection with the enforcement of its rights and remedies under
the Credit Agreement, this Note, the Security Documents and each other Credit
Document.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided therein.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS
OF THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
TWCC ACQUISITION CORP.
By: _______________________________
Title:
Schedule A to
Revolving Credit Note
ALTERNATE BASE RATE LOANS
AND REPAYMENTS OF ALTERNATE BASE RATE LOANS
Unpaid Principal
Amount of Amount Balance of
Alternate Converted to Alternate Base
Base Rate Alternate Amount of Amount Converted Rate Notation Made
Date Loans Base Rate Loans Principal Repaid to Eurodollar Loans Loans By
--------- ------------- ----------------- ---------------- ------------------- ---------------- -------------
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
_________ _____________ _________________ ________________ ___________________ ________________ _____________
Schedule B to
Revolving Credit Note
EURODOLLAR LOANS
AND REPAYMENTS OF EURODOLLAR LOANS
Amount Interest Period Amount Unpaid
Amount of Converted to and Eurodollar Converted Principal
Euro- Euro- Rate with Amount of to Alternate Base Balance of
dollar dollar Respect Principal Rate Eurodollar Notation
Date Loans Loans Thereto Repaid Loans Loans Made By
---------- ------------ ------------- --------------- -------------- ---------------- --------------- ---------
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
__________ ____________ _____________ _______________ ______________ ________________ _______________ _________
EXHIBIT B
TO THE
CREDIT AGREEMENT
FORM OF TERM LOAN NOTE
$__________ New York, New York
___________, 1996
FOR VALUE RECEIVED, the undersigned, TWCC ACQUISITION CORP., a
Massachusetts corporation (the "Company"), promises to pay to the order of
_______________ (the "Lender") at the office of The Chase Manhattan Bank, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful money of the United States of
America and in immediately available funds, the principal amount of
____________________ DOLLARS ($__________), or, if less, the aggregate unpaid
principal amount of all loans made by the Lender pursuant to subsection 2.1 of
the Credit Agreement referred to below, which sum shall be due and payable in
such amounts and on such dates as are set forth in the Credit Agreement, dated
as of October __, 1996 among the Company, the Lender and certain other banks and
financial institutions parties thereto, and The Chase Manhattan Bank, as
administrative agent (as the same may be from time to time amended, supplemented
or otherwise modified, the "Credit Agreement"; terms defined therein being used
herein as so defined). The undersigned further agrees to pay interest at said
office, in like money, from the date hereof on the unpaid principal amount
hereof from time to time outstanding at the rates and on the dates specified in
subsection 4.5 of the Credit Agreement. The holder of this Note is authorized to
record the date, Type and amount of the Term Loan made by the Lender pursuant to
subsection 2.1 of the Credit Agreement, the date and amount of each payment or
prepayment of principal hereof, and the date of each interest rate conversion or
continuation pursuant to subsection 4.2 of the Credit Agreement and the
principal amount subject thereto, on the schedules annexed hereto and made a
part hereof and any such recordation shall constitute prima facie evidence of
the information so recorded, provided that the failure of the Lender to make
such recordation (or any error in such recordation) shall not affect the
obligations of the Company hereunder or under the Credit Agreement.
This Note is one of the Term Loan Notes referred to in the Credit
Agreement and is entitled to the benefits thereof and is subject to optional and
mandatory prepayment in whole or in part as provided therein.
This Note is secured and guaranteed as provided in the Security Documents
and the Guarantees. Reference is hereby made to the Security Documents and the
Guarantees for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security and guarantees,
the terms and conditions upon which the security interest and each guarantee was
granted and the rights of the holder of this Note in respect thereof. The
undersigned agrees to pay all costs and expenses incurred by the Lender in
2
connection with the enforcement of its rights and remedies under the Credit
Agreement, this Note, the Security Documents and each other Credit Document.
Upon the occurrence of any one or more of the Events of Default specified
in the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable all as provided
therein.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF
THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT
AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
TWCC ACQUISITION CORP.,
By:_____________________________
Title:
Schedule A to
Term Loan Note
ALTERNATE BASE RATE LOANS
AND REPAYMENTS OF ALTERNATE BASE RATE LOANS
Unpaid Principal
Amount of Amount Balance of
Alternate Converted to Alternate Base
Base Rate Alternate Amount of Amount Converted Rate Notation Made
Date Loans Base Rate Loans Principal Repaid to Eurodollar Loans Loans By
--------- ------------- ---------------- ---------------- ------------------- ---------------- -------------
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
_________ _____________ ________________ ________________ ___________________ ________________ _____________
Schedule B to
Term Loan Note
EURODOLLAR LOANS
AND REPAYMENTS OF EURODOLLAR LOANS
Amount Interest Period Amount Unpaid
Amount of Converted to and Eurodollar Converted Principal
Euro- Euro- Rate with Amount of to Alternate Base Balance of
dollar dollar Respect Principal Rate Eurodollar Notation
Date Loans Loans Thereto Repaid Loans Loans Made By
---------- ------------ ------------- --------------- -------------- ---------------- --------------- ----------
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
__________ ____________ _____________ _______________ ______________ ________________ _______________ __________
EXHIBIT D
TO THE
CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of ______________,
1996 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among TWCC Acquisition Corp., a Massachusetts corporation
(to be merged with and into The Xxxxxxx Xxxxxx Company, the "Company"), the
Lenders named therein, Bankers Trust Company, as syndication agent, Xxxxxxx
Sachs Credit Partners L.P., as documentation agent and The Chase Manhattan Bank,
as administrative agent for the Lenders (in such capacity, the "Administrative
Agent"). Terms defined in the Credit Agreement are used herein with the same
meanings.
________________________ (the "Assignor") and ____________________ (the
"Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest (the "Assigned Interest") in and
to the Assignor's rights and obligations under the Credit Agreement with respect
to those credit facilities contained in the Credit Agreement as are set forth on
Schedule 1 (individually, an "Assigned Facility"; collectively, the "Assigned
Facilities"), in a principal amount for each Assigned Facility as set forth on
Schedule 1.
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement, any other Credit Document or
any other instrument or document furnished pursuant thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other Credit Document or any other instrument or document
furnished pursuant thereto, other than it has not created any adverse claim upon
the interest being assigned by it hereunder and that such interest is free and
clear of any such adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Company, any of the Company's Subsidiaries or any other obligor or the
performance or observance by the Company, any of the Company's Subsidiaries or
any other obligor of any of their respective obligations under the Credit
Agreement or any other Credit Document or any other instrument or document
furnished pursuant hereto or thereto; (iii) attaches the Note(s), if any, held
by it evidencing the Assigned Facilities and requests that the Administrative
Agent exchange such Note(s) for a new Note or Notes payable to the Assignee (if
requested by the Assignee) and (if the Assignor has retained any interest in the
Assigned Facility) a new Note or Notes payable to the Assignor (if requested by
the Assignor) in the respective amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date); and (iv) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance.
2
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Credit Agreement, together with copies of the financial statements
referred to in subsection 7.1 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (iii) agrees that it will, independently and
without reliance upon the Assignor, the Administrative Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto; (iv) appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Credit Agreement, the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are incidental thereto; and (v) agrees that it will
be bound by the provisions of the Credit Agreement and will perform in
accordance with its terms all the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender including, if it is
organized under the laws of a jurisdiction outside the United States, its
obligations pursuant to subsections 4.11(d) and 11.6(g) of the Credit Agreement
to deliver the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement, or such other documents as are necessary to indicate that all such
payments are subject to such tax at a rate reduced by an applicable tax treaty.
4. The effective date of this Assignment and Acceptance shall be
__________, (the "Effective Date"). Following the execution of this Assignment
and Acceptance, it will be delivered to the Administrative Agent for acceptance
by it and recording by the Administrative Agent pursuant to subsection 11.6(d)
of the Credit Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Administrative Agent, be earlier than five
Business Days after the date of such acceptance and recording by the
Administrative Agent).
5. Upon such acceptance and recording, from and after the Effective Date,
the Administrative Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, fees and other amounts) to
the Assignee whether such amounts have accrued prior to the Effective Date or
accrue subsequent to the Effective Date. The Assignor and the Assignee shall
make all appropriate adjustments in payments by the Administrative Agent for
periods prior to the Effective Date or with respect to the making of this
assignment directly between themselves.
6. From and after the Effective Date, (i) the Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Credit Documents and shall be bound by the provisions thereof and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
3
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
[ASSIGNEE] [ASSIGNOR]
By:____________________ By:___________________
Name: Name:
Title: Title:
4
Accepted [and Consented to]:*
[TWCC ACQUISITION CORP.] THE CHASE MANHATTAN BANK, as
Administrative Agent
By:_______________________ By:_______________________
Name: Name:
Title: Title:
----------
* Consents only required where Assignee is not a Lender or an Affiliate of a
Lender.
Schedule 1 to Assignment and Acceptance relating to the Credit Agreement,
dated as of October ___, 1996,
among
TWCC ACQUISITION CORP., a Massachusetts corporation (to be merged
with and into The Xxxxxxx Xxxxxx Company), the Lenders named
therein, and The Chase Manhattan Bank, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent")
----------------------------------------------------------
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Commitment Percentages Assigned
(to at least fifteen decimals)
Credit Principal (shown as a percentage of aggregate
Facility Assigned Amount Assigned principal amount of all Lenders)
----------------- --------------- --------------------------------
EXHIBIT E TO
CREDIT AGREEMENT
FORM OF
COMPANY SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October __, 1996 made by TWCC
ACQUISITION CORP., a Massachusetts corporation (to be merged with and into The
Xxxxxxx Xxxxxx Company, the "Company"), in favor of THE CHASE MANHATTAN BANK, a
New York banking corporation, as administrative agent (in such capacity, the
"Administrative Agent") for the several lenders (the "Lenders") from time to
time parties to the Credit Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of the date hereof
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Company, the Lenders and the Administrative Agent, the
Lenders have severally agreed to make loans to, and the Issuing Lender (as
defined in the Credit Agreement) has agreed to issue and certain of the other
Lenders have agreed to participate in letters of credit for the account of, the
Company upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective loans to, and the obligation of the Issuing
Lender to issue and the Lenders to participate in letters of credit for the
account of, the Company under the Credit Agreement that the Company shall have
executed and delivered this Security Agreement to the Administrative Agent for
the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
make their respective loans to, and to issue or participate in letters of credit
for the account of, the Company under the Credit Agreement, the Company hereby
agrees with the Administrative Agent, for the ratable benefit of the Lenders, as
follows:
1. Defined Terms. Unless otherwise defined herein or in the preamble
or recitals hereto, terms which are defined in the Credit Agreement and used
herein are so used as so defined; the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Chattel Paper, Farm Products, Documents, Goods,
Instruments and Inventory; and the following terms shall have the following
meanings:
"Accounts" means all accounts receivable, book debts, notes, drafts,
instruments, documents, acceptances and other forms of obligations now
owned or hereafter received or acquired by or belonging or owing to the
Company (including under any trade names,
2
styles or divisions thereof) whether arising out of personal property
owned or leased by it, Goods sold by it or services rendered by it or from
any other transaction, whether or not the same involves the lease of
personal property, sale of Goods or performance of services by the Company
(including, without limitation, any such obligation which would be
characterized as an account, general intangible or chattel paper under the
Code) and all of the Company's rights in, to and under all purchase orders
now owned or hereafter received or acquired by it for Goods or services,
and all of the Company's rights to any Goods represented by any of the
foregoing (including returned or repossessed Goods and unpaid seller's
rights) and all moneys due or to become due to the Company under all
contracts for the sale of Goods and/or the performance of services by it
(whether or not yet earned by performance), under any lease of real or
personal property (to the extent the grant of such a security interest is
permitted by applicable law and is not prohibited by such lease), or under
any franchise agreement, or in connection with any other transaction, now
in existence or hereafter arising, including without limitation the right
to receive the proceeds of said purchase orders and contracts and rents
under such leases, and all collateral security and guarantees of any kind
given by any Person with respect to any of the foregoing.
"Code" means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral" has the meaning assigned to it in Section 2 of this
Security Agreement.
"Contract" means, with respect to an Account, any agreement relating
to the terms of payment or the terms of performance thereof, including,
without limitation, (a) all rights of the Company to receive moneys due
and to become due to it thereunder or in connection therewith, (b) all
rights of the Company to damages arising out of, or for, breach or default
in respect thereof and (c) all rights of the Company to perform and to
exercise all remedies thereunder.
"Copyright License" means any written agreement, naming the Company,
as licensor or licensee, granting any right in the United States to use
any Copyright including, without limitation, any referred to in Schedule I
hereto.
"Copyrights" means all of the following to the extent the Company
now or hereafter has any right, title or interest: (a) all United States
copyrights and all registrations and applications therefor, including,
without limitation, any referred to in Schedule I hereto, and (b) all
renewals of such copyrights.
"Equipment" means all machinery, equipment and furniture except
Vehicles, now owned or hereafter acquired by the Company or in which the
Company now has or hereafter may acquire any right, title or interest and
any and all additions, substitutions and replacements thereof, wherever
located, together with all attachments, components, parts, equipment and
accessories installed therein or affixed thereto, including, but not
limited to, all equipment as defined in Section 9-109(2) of the Code.
"General Intangibles" has the meaning given to it in the Code and
includes, whether or not so included in such meaning, any franchise
agreements or rights in favor
3
of or granted by the Company to know-how, trade secrets, product or
service development ideas and designs, advertising commercials,
renderings, strategies and plans, blueprints, architectural drawings, site
location, personnel and franchisee information, proprietary information,
computer and software technology and programs, contracts with
distributors, and any similar items, all interest rate, foreign currency
or similar agreements and general intangibles attributable to the Capital
Stock of each of the Subsidiaries of the Company.
"License" means any Copyright License, Patent License or Trademark
License.
"Obligations" means (i) the unpaid principal amount of, and interest
on (including interest accruing on or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company, whether or not a claim for such
post-filing or post-petition interest is allowed), the Loans and all other
obligations and liabilities of the Company to the Administrative Agent,
the Issuing Lender or the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, any Letter of Credit or L/C Application, the other Credit
Documents and any other document executed and delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of
counsel to the Administrative Agent, the Issuing Lender or to the Lenders
that are required to be paid by the Company pursuant to the terms of the
Credit Agreement) or otherwise, and (ii) all obligations of the Company to
any Lender or Lenders or its or their Affiliates under or in respect of
any Interest Rate Agreement.
"Patent License" means any agreement, whether written or oral,
providing for the grant by or to the Company of any right to manufacture,
use or sell any invention covered by a Patent, including, without
limitation, any thereof referred to in Schedule II hereto.
"Patents" means (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in Schedule II hereto, and (b) all
applications for letters patent of the United States and all divisions,
continuations and continuations-in-part thereof or any other country,
including, without limitation, any thereof referred to in Schedule II
hereto.
"Proceeds" means "proceeds", as such term is defined in Section
9-306(1) of the Code and, to the extent not included in such definition,
shall include, without limitation, (a) any and all proceeds of any
insurance, indemnity, warranty, guaranty or letter of credit payable to
the Company, from time to time with respect to any of the Collateral, (b)
all payments (in any form whatsoever) paid or payable to the Company from
time to time in connection with any taking of all or any part of the
Collateral by any Governmental Authority or any Person acting under color
of Governmental Authority, (c) all judgments in favor of the Company in
respect of the Collateral and (d) all other amounts from time
4
to time paid or payable or received or receivable under or in connection
with any of the Collateral.
"Security Agreement" means this Security Agreement, as amended,
supplemented or otherwise modified from time to time.
"Trademark License" means any agreement, written or oral, providing
for the grant by or to the Company of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule III
hereto.
"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source of business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any state
thereof or any other country or any political subdivision thereof, or
otherwise, including, without limitation, any thereof referred to in
Schedule III hereto, and (b) all renewals thereof.
"Vehicles" means all cars, trucks, trailers and other vehicles
covered by a certificate of title law of any state.
2. Grant of Security Interest. (a) As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Company hereby
grants to the Administrative Agent for the ratable benefit of the Lenders a
security interest in all of the following property now owned or at any time
hereafter acquired by the Company or in which the Company now has or at any time
in the future may acquire any right, title or interest (collectively, the
"Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Copyrights;
(v) all Copyright Licenses;
(vi) all Documents;
(vii) all Equipment;
(viii) all General Intangibles;
5
(ix) all Instruments;
(x) all Inventory;
(xi) all Patents;
(xii) all Patent Licenses;
(xiii) all Trademarks;
(xiv) all Trademark Licenses;
(xv) all other Goods and personal property of the Company
other than Vehicles, whether tangible or intangible and
whether now or hereafter owned by the Company, and
wherever located; and
(xvi) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
3. Rights of Administrative Agent and Lenders; Limitations on
Administrative Agent's and Lenders' Obligations.
(a) Company Remains Liable under Accounts, Licenses, Contracts, Etc.
Anything herein to the contrary notwithstanding, the Company shall remain
liable under each of the Accounts, Licenses and Contracts to observe and
perform all the material conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Account, License or Contract. Neither
the Administrative Agent nor any Lender shall have any obligation or
liability under any Account, License or Contract by reason of or arising
out of this Security Agreement or the receipt by the Administrative Agent
or any Lender of any payment relating to such Account, License or Contract
pursuant hereto, nor shall the Administrative Agent or any Lender be
obligated in any manner to perform any of the obligations of the Company
under or pursuant to any Account, License or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any
party under any Account, License or Contract, to present or file any
claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it
may be entitled at any time or times.
(b) Notice to Account Debtors and Contracting Parties. At any time
after an Event of Default has occurred and so long as such Event of
Default shall be continuing, upon the request of the Administrative Agent
the Company shall, and the Administrative Agent may (with concurrent
notice to the Company thereof), notify account debtors on the Accounts and
parties to the Contracts and Licenses that the Accounts, Contracts and
Licenses have been assigned to the Administrative Agent for the ratable
benefit of the
6
Lenders and that payments in respect thereof shall be made directly to the
Administrative Agent. At any time after an Event of Default shall have
occurred and be continuing, the Administrative Agent may in its own name
or in the name of others communicate with account debtors on the Accounts
and parties to the Contracts and Licenses to verify with them to its
satisfaction the existence, amount and terms thereof.
(c) Verification of Accounts and Inventory. The Administrative Agent
shall have the right to make test verifications of the Accounts and
Inventory in any reasonable manner and through any medium that it
considers advisable, and the Company agrees to furnish all such assistance
and information as the Administrative Agent may reasonably require in
connection therewith provided that, so long as no Event of Default shall
have occurred and be continuing, any such verification shall be conducted
in the name of the Company or in such other manner as shall not disclose
the Administrative Agent's identity or interest in the Collateral. The
Administrative Agent may after the occurrence and during the continuance
of an Event of Default in its own name or in the name of others
communicate with account debtors in order to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Accounts and/or Inventory.
4. Representations and Warranties. The Company hereby represents and
warrants that:
(a) Title; No Other Liens. Except for the Lien granted to the
Administrative Agent for the ratable benefit of the Lenders pursuant to
this Security Agreement and the other Liens permitted to exist on the
Collateral pursuant to the Credit Agreement, the Company owns each item of
the Collateral free and clear of any and all Liens. No security agreement,
financing statement or other public notice with respect to all or any part
of the Collateral is on file or of record in any public office, except (i)
such as may have been filed in favor of the Administrative Agent, for the
ratable benefit of the Lenders, pursuant to this Security Agreement, or
(ii) as may be permitted pursuant to the Credit Agreement.
(b) Perfected First Priority Liens. The Liens granted pursuant to
this Security Agreement constitute perfected Liens on the Collateral in
favor of the Administrative Agent, for the ratable benefit of the Lenders,
to the extent that (i) such Liens constitute Liens on General Intangibles,
or (ii) such Liens constitute Liens on Equipment located in a jurisdiction
listed on Schedule IV, or (iii) such Liens can be perfected by filing a
financing statement under the Uniform Commercial Code, as in effect in the
relevant jurisdiction, or (iv) such Liens constitute Liens on Vehicles the
perfection of which has been requested pursuant to subsection 5(r), which
Lien has been properly notated on certificates of title received by the
Company, in respect of such Liens that can be perfected by notation
thereof on the certificates of title in respect of such Vehicles in
accordance with the law of the relevant jurisdiction, or (v) the Company
is required to deliver such Collateral to the Administrative Agent
pursuant to Section 5(a) hereof, which are prior to all other Liens on the
Collateral created by the Company and in existence on the date hereof,
except for Liens permitted to exist on the Collateral pursuant to the
Credit
7
Agreement, and which are enforceable as such against all creditors of and
purchasers from the Company.
(c) Accounts and Records. The amount represented by the Company to
the Administrative Agent from time to time as owing by each account debtor
or by all account debtors in respect of the Accounts will at such time be
the correct amount actually owing by such account debtor or debtors
thereunder in all material respects, subject to adjustments in the
ordinary course of business. No amount payable to the Company under or in
connection with any Account, Contract or License in excess of $250,000 is
evidenced by any Instrument or Chattel Paper which has not been delivered
to the Administrative Agent. The place where the Company keeps its records
concerning the Accounts and the other Collateral is 0000 Xxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxx 00000.
(d) Consents. Each Contract and License is in full force and effect
and, to the best knowledge of the Company, constitutes a valid and legally
enforceable obligation of the other obligor in respect thereof or parties
thereto, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally. No consent or authorization
of, filing with or other act by or in respect of any Governmental
Authority is required in connection with the execution, delivery,
performance, validity or enforceability of any of the Accounts, Licenses
or Contracts by any party thereto other than those which have been duly
obtained, made or performed, are in full force and effect and do not
subject the scope of any such Account, License or Contract to any material
adverse limitation, either specific or general in nature. Neither the
Company nor (to the best of the Company's knowledge) any other party to
any Account, License or Contract is in default in the performance or
observance of any of the terms thereof. The Company has fully performed
all its material obligations under each License and Contract to the extent
such obligations are required to be performed on or prior to the date
hereof. The right, title and interest of the Company in, to and under each
Account, License and Contract are not subject to any defense, offset,
counterclaim or claim which would materially adversely affect the value of
such Account, License or Contract as Collateral, nor have any of the
foregoing been asserted or alleged against the Company as to any of the
foregoing.
(e) Inventory. The Inventory is kept at the locations listed on
Schedule IV hereto, as amended or supplemented from time to time pursuant
to Section 5(l) hereof.
(f) Equipment. The Equipment is kept at the locations listed on
Schedule IV hereto, as amended or supplemented from time to time pursuant
to Section 5(o) hereof.
(g) Chief Executive Office. The Company's chief executive office and
chief place of business is located at 0000 Xxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxx, Xxxxxxx 00000.
8
(h) Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
(i) Patents, Trademarks and Copyrights. Schedule II hereto includes
all material Patents and Patent Licenses owned by the Company in its own
name as of the date hereof. Schedule III hereto includes all material
Trademarks and Trademark Licenses owned by the Company in its own name as
of the date hereof. Schedule I hereto includes all material Copyrights in
which the Company has any colorable claim of ownership as of the date
hereof. To the best of the Company's knowledge, except as set forth on
Schedule II or Schedule III, each Patent and Trademark is valid,
subsisting, unexpired and enforceable and has not been abandoned. Except
as set forth in Schedule II or on Schedule III, none of such Patents and
Trademarks is the subject of any licensing or franchise agreement. All
licenses of the Company's Trademarks are in force and, to the best
knowledge of the Company, not in default. No holding, decision or judgment
has been rendered by any Governmental Authority with respect to any Patent
or Trademark which would limit, cancel or question the validity of any
Patent or Trademark. Except as set forth on Schedule II or Schedule III,
no action or proceeding is pending or, to the knowledge of the Company,
threatened (i) seeking to limit, cancel or question the validity of any
material Patent or Trademark or the Company's ownership thereof, or (ii)
which, if adversely determined, would have a material adverse effect on
the value of any material Patent or Trademark.
(j) Power and Authority; Authorization. The Company has the
corporate power and authority and the right to execute and deliver, to
perform its obligations under, and to grant the Lien on the Collateral
pursuant to, this Security Agreement and has taken all necessary corporate
action to authorize its execution, delivery and performance of, and grant
of the Lien on the Collateral pursuant to, this Security Agreement.
(k) No Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Company, threatened by or against the Company or against
any of its properties or revenues with respect to this Security Agreement
or any of the transactions contemplated hereby which would have a material
adverse effect upon any material portion of the Collateral or the granting
of the security interests hereby.
5. Covenants. The Company covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full, the Commitments are
terminated and either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent:
(a) Further Documentation; Pledge of Instruments and Chattel Paper.
(i) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Company, the Company
will promptly and duly execute and deliver such further instruments and
documents and take such further action as the
9
Administrative Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Security Agreement and of the
rights and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the Uniform
Commercial Code in effect in any jurisdiction with respect to the Liens
created hereby. The Company also hereby authorizes the Administrative
Agent to file any such financing or continuation statement without the
signature of the Company to the extent permitted by applicable law. A
carbon, photographic or other reproduction of this Security Agreement
shall be sufficient as a financing statement for filing in any
jurisdiction.
(ii) If any amounts payable under or in connection with any of the
Collateral having a face value in excess of $1,250,000 in the aggregate at
any one time outstanding shall be or become evidenced by any Instruments
or Chattel Paper, such Instruments or Chattel Paper shall be immediately
delivered to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Security Agreement. So long as no Default or Event of
Default has occurred and is continuing, upon request by the Company, the
Administrative Agent shall make available any pledged Collateral to the
Company, or its designee, that the Company specifies is required for the
purpose of ultimate sale, exchange, presentation, collection, renewal,
registration or transfer thereof, provided that in each case arrangements
reasonably satisfactory to the Administrative Agent shall be made for the
return of such pledged Collateral within 21 days from the time of delivery
by the Administrative Agent, except for pledged Collateral that has been
fully repaid, satisfied, or transferred as permitted hereunder.
(iii) Notwithstanding anything set forth in this Security Agreement
to the contrary, so long as no Default or Event of Default has occurred
and is continuing, the Company shall not be required to deliver to the
Administrative Agent any Instruments or Chattel Paper to be held by the
Administrative Agent as Collateral pursuant to this Security Agreement so
long as the aggregate amount evidenced by all such Instruments and Chattel
Paper does not exceed $1,250,000 at any one time outstanding.
(b) Indemnification. The Company agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all
liabilities, costs and expenses (including, without limitation, reasonable
legal fees and expenses) (i) with respect to, or resulting from, any delay
in paying, any and all excise, sales or other taxes which may be payable
or determined to be payable with respect to any of the Collateral, (ii)
with respect to, or resulting from, any delay by the Company in complying
with any Requirement of Law applicable to any of the Collateral or (iii)
in connection with any of the transactions contemplated by this Security
Agreement; provided, that the Company shall not be liable for the payment
of any portion of such liabilities, costs or expenses resulting from the
gross negligence or willful misconduct of the Administrative Agent or any
of the Lenders. Without limiting the preceding sentence, the Company will
indemnify and save and keep harmless the Administrative Agent and each
Lender from and against all expense, loss or damage suffered by reason of
any counterclaim of the
10
account debtor or obligor thereunder, arising out of a breach by the
Company of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of
such account debtor or obligor or its successors from the Company.
(c) Maintenance of Records. The Company will keep and maintain at
its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to the Accounts, Contracts
and Licenses. The Company will xxxx its internal books and records
pertaining to the Collateral to evidence this Security Agreement and the
security interests granted hereby. For the Administrative Agent's and the
Lenders' further security, the Administrative Agent, for the ratable
benefit of the Lenders, shall have a security interest in all of the
Company's books and records pertaining to the Collateral, and the Company
shall make available for review any such books and records to the
Administrative Agent or to its representatives during normal business
hours at the reasonable request of the Administrative Agent. The Company
shall permit representatives of any Lender, upon reasonable notice (but no
more frequently than monthly unless a Default or Event of Default shall
have occurred and be continuing), to visit and inspect any of its
properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be requested
upon reasonable notice, and to discuss the business, operations, assets
and financial and other condition of the Company and its Subsidiaries with
officers and employees thereof and with their independent certified public
accountants.
(d) Right of Inspection. The Administrative Agent and the Lenders
shall upon reasonable notice (but no more frequently than monthly) unless
a Default or Event of Default shall have occurred and be continuing, have
full and free reasonable access during normal business hours to all the
books, correspondence and records of the Company, and the Administrative
Agent and the Lenders and their respective representatives may examine the
same, take extracts therefrom and make photocopies thereof at any
reasonable time and as may be reasonably required upon reasonable notice,
and the Company agrees to render to the Administrative Agent at the
Company's cost and expense, and to the Lenders, such clerical and other
assistance as may be reasonably requested with regard thereto. The
Administrative Agent and the Lenders shall keep such information thereby
obtained confidential to the extent set forth in subsection 11.6(f) of the
Credit Agreement.
(e) Compliance with Laws, etc. The Company will comply in all
material respects with all Requirements of Law applicable to the
Collateral or any part thereof or to the operation of the Company's
business; provided, however, that the Company may contest any Requirement
of Law in any reasonable manner which shall not, in the reasonable opinion
of the Administrative Agent, adversely affect the Administrative Agent's
or the Lenders' rights or the priority of their Liens on the Collateral.
11
(f) Compliance with Terms of Contracts, etc. The Company will
perform and comply in all material respects with all its obligations under
the Contracts and all its other Contractual Obligations relating to the
Collateral.
(g) Payment of Obligations. The Company will pay promptly when due
all material taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of its income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the Collateral,
except that no such charge need be paid if (i) the validity thereof is
being contested in good faith by appropriate proceedings, (ii) such
proceedings do not involve any material danger of the sale, forfeiture or
loss of any of the Collateral or any interest therein and (iii) such
charge is adequately reserved against on the Company's books in accordance
with GAAP.
(h) Limitation on Liens on Collateral. The Company will not create,
incur or permit to exist, will take all commercially reasonable actions to
defend the Collateral against, and will take such other commercially
reasonable action as is necessary to remove, any Lien or claim on or to
the Collateral, other than the Liens created hereby and other than as
permitted pursuant to the Credit Agreement, and will take all commercially
reasonable actions to defend the right, title and interest of the
Administrative Agent and the Lenders in and to any of the Collateral
against the claims and demands of all Persons whomsoever.
(i) Limitations on Dispositions of Collateral. The Company will not
sell, transfer, lease or otherwise dispose of any of the Collateral, or
attempt, offer or contract to do so except for sales of assets permitted
by the Credit Agreement. Concurrently with any such permitted disposition,
the property acquired by a transferee in such disposition shall
automatically be released from the security interest created by this
Security Agreement (the "Security Interest"). It is acknowledged and
agreed that notwithstanding any release of property from the Security
Interest in accordance with the foregoing provisions of this Section, the
Security Interest shall in any event continue in the Proceeds of
Collateral. The Administrative Agent shall promptly execute and deliver
(and, when appropriate, shall cause any separate agent, co-agent or
trustee to execute and deliver) any releases, instruments or documents
reasonably requested by the Company to accomplish or confirm the release
of Collateral provided by this Section. Any such release of Collateral
provided by the Administrative Agent shall specifically describe that
portion of the Collateral to be released, shall be expressed to be
unconditional and shall be without recourse or warranty (other than a
warranty that the Administrative Agent has not assigned its rights and
interests to any other Person). The Company shall pay all of the
Administrative Agent's reasonable expenses in connection with any release
of Collateral.
(j) Limitations on Modifications, Waivers, Extensions of Agreements
Giving Rise to Accounts. The Company will not (i) amend, modify, terminate
or waive any provision of any Contract, agreement or lease giving rise to
an Account or License in any manner which could reasonably be expected to
materially adversely affect the value of
12
such Contract, Account or License as Collateral, except in a manner
consistent with the ordinary and customary conduct of its business, (ii)
fail to exercise promptly and diligently each and every material right
which it may have under each material Contract, agreement or lease giving
rise to an Account or License (other than any right of termination),
except in a manner consistent with the ordinary and customary conduct of
its business or (iii) fail to deliver to the Administrative Agent upon its
reasonable request a copy of each material demand, notice or document
received by it relating in any way to any material Contract, agreement or
lease giving rise to an Account or License.
(k) Limitations on Discounts, Compromises, Extensions of Accounts.
Other than in the ordinary course of business as generally conducted by
the Company over a period of time, the Company will not grant any
extension of the time of payment of any of the Accounts, compromise,
compound or settle the same for less than the full amount thereof,
release, wholly or partially, any Person liable for the payment thereof,
or allow any credit or discount whatsoever thereon.
(l) Maintenance of Equipment. The Company will maintain each item of
Equipment in good operating condition, ordinary wear and tear and
immaterial impairments of value and damage by the elements excepted, and
will provide all maintenance, service and repairs necessary for such
purpose.
(m) Further Identification of Collateral. The Company will furnish
to the Administrative Agent from time to time statements and schedules
further identifying and describing the Collateral and such other reports
in connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
(n) Notices. The Company will advise the Administrative Agent and
the Lenders promptly, in reasonable detail, at their respective addresses
set forth in the Credit Agreement, (i) of any Lien (other than Liens
created hereby or permitted under the Credit Agreement) on, or claim
asserted against, any of the Collateral and (ii) of the occurrence of any
other event which could reasonably be expected to have a material adverse
effect on the aggregate value of the Collateral or on the Liens created
hereunder.
(o) Changes in Locations, Name, etc. The Company will not (i) change
the location of its chief executive office/chief place of business from
that specified in Section 4(g) or remove its books and records from the
location specified in Section 4(c), (ii) remove any material amount of the
Inventory or Equipment to, or keep any material amount of Inventory or
Equipment at, a location other than those listed on Schedule IV hereto, or
(iii) change its name (including the adoption of any new trade name),
identity or corporate structure to such an extent that any financing
statement filed by the Administrative Agent in connection with this
Security Agreement would become seriously misleading, unless it shall have
provided at least 15 days prior written notice to the Administrative Agent
of any such event and provide the Administrative Agent with the new
location of its chief executive office/chief place of business and its
books and records, the location of the Inventory and Equipment and the
change in the Company's
13
name, as the case may be. Any notice given pursuant to this Section 5(o)
shall be deemed to amend Section 4(c) and 4(g) hereof or Schedule IV
hereto, as the case may be. In connection with any actions permitted
pursuant to clause (i) of this Section 5(o), the Administrative Agent
shall be entitled to receive any legal opinions it reasonably requests as
to the continued perfection of the security interest granted hereby in the
Collateral, which opinions shall be deemed satisfactory to the
Administrative Agent if substantially similar to the perfection opinions
given by Xxxxxx, Xxxx & Xxxxxxxx on the Closing Date.
(p) Copyrights. The Company (i) will employ the Copyright for each
material published work with such notice of copyright as may be required
by law to secure copyright protection and (ii) will not do any act or
knowingly omit to do any act whereby any material Copyright may become
invalidated and:
(A) will not do any act, or omit to do any act, whereby any
material Copyright may become injected into the public domain;
(B) shall notify the Administrative Agent immediately if it
knows, or has reason to know, that any material Copyright may become
injected into the public domain or of any adverse determination or
development (including, without limitation, the institution of, or
any such determination or development in, any court or tribunal in
the United States or any other country) regarding the Company's
ownership of any such Copyright or its validity;
(C) will take all necessary steps as it shall deem appropriate
under the circumstances, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each
registration of each material Copyright owned by the Company
including, without limitation, filing of applications for renewal,
where necessary; and
(D) will promptly notify the Administrative Agent of any
material infringement of any material Copyright of the Company of
which it becomes aware and will take such actions as it shall
reasonably deem appropriate under the circumstances to protect such
Copyright, including, where appropriate, the bringing of suit for
infringement, seeking injunctive relief and seeking to recover any
and all damages for such infringement.
(q) Patents and Trademarks.
(i) The Company (either itself or through licensees) will,
except with respect to any Trademark that the Company shall
reasonably determine is of immaterial economic value to it or
otherwise reasonably determines not to do so, (A) continue to use
each Trademark on each and every trademark class of goods applicable
to its current line as reflected in its current catalogs, brochures
and price lists in order to maintain such Trademark in full force
free from any claim of abandonment for non-use, (B) maintain as in
the past the quality of products
14
and services offered under such Trademark, (C) use reasonable
efforts to employ such Trademark with the appropriate notice of
registration, (D) not adopt or use any xxxx which is confusingly
similar or a colorable imitation of such Trademark unless within 45
days after such use or adoption the Administrative Agent, for the
ratable benefit of the Lenders, shall obtain a perfected security
interest in such xxxx pursuant to this Security Agreement, and (E)
not (and not permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby any Trademark may become
invalidated.
(ii) The Company will not, except with respect to any Patent
that the Company shall reasonably determine is of immaterial
economic value to it or otherwise reasonably determine so to do, do
any act, or omit to do any act, whereby any Patent may become
abandoned or dedicated.
(iii) The Company will notify the Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any
application relating to any Patent, or any application or
registration relating to any Trademark may become abandoned or
dedicated, or of any adverse determination or material development
(including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States
Patent and Trademark Office or any court or tribunal in any country)
regarding the Company's ownership of any Patent or Trademark or its
right to register the same or to keep and maintain the same.
(iv) Whenever the Company, either by itself or through any
agent, employee, licensee or designee, shall file an application for
any Patent or for the registration of any Trademark with the United
States Patent and Trademark Office or any similar office or agency
in any other country or any political subdivision thereof, the
Company shall report such filing to the Administrative Agent and the
Lenders within five Business Days after the last day of the fiscal
quarter in which such filing occurs. Upon request of the
Administrative Agent, the Company shall execute and deliver any and
all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative
Agent's and the Lenders' security interest in any Patent or
Trademark and the goodwill and general intangibles of the Company
relating thereto or represented thereby, and the Company hereby
appoints and constitutes the Administrative Agent its
attorney-in-fact to execute and file all such writings for the
foregoing purposes, all acts of such attorney being hereby ratified
and confirmed; such power being coupled with an interest and is
irrevocable until the Obligations are paid in full, the Commitments
are terminated and no Letters of Credit are outstanding.
(v) The Company, except with respect to any Patent or
Trademark the Company shall reasonably determine is of immaterial
economic value to it or it otherwise reasonably determines not to so
do and except with respect to any Trademark that is not registrable,
will take all reasonable and necessary steps,
15
including, without limitation, in any proceeding before the United
States Patent and Trademark Office, or any similar office or agency
in any other country or any political subdivision thereof, to
maintain and pursue each application (and to obtain the relevant
registration or Patent) and to maintain each Patent and each
registration of Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability when appropriate.
(vi) In the event that any Patent or Trademark included in the
Collateral is infringed, misappropriated or diluted by a third
party, the Company shall promptly notify the Administrative Agent
and the Lenders after it learns thereof and shall, unless the
Company shall reasonably determine that such Patent or Trademark is
of immaterial economic value to the Company, which determination the
Company shall promptly report to the Administrative Agent and the
Lenders, promptly xxx for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover
any and all damages for such infringement, misappropriation or
dilution, or take such other actions as the Company shall reasonably
deem appropriate under the circumstances to protect such Patent or
Trademark.
6. Administrative Agent's Appointment as Attorney-in-Fact.
(a) Powers. The Company hereby irrevocably constitutes and appoints
the Administrative Agent and any officer or agent thereof, with full power
of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Company and
in the name of the Company or in its own name, from time to time after the
occurrence, and during the continuation, of an Event of Default in the
Administrative Agent's discretion, for the purpose of carrying out the
terms of this Security Agreement, to take any and all appropriate action
and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Security
Agreement, and, without limiting the generality of the foregoing, the
Company hereby gives the Administrative Agent the power and right, on
behalf of the Company, without notice to or assent by the Company, to do
the following:
(i) in the name of the Company or its own name, or otherwise,
to take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys
due under any Account, Instrument, License or General Intangible or
with respect to any other Collateral and to file any claim or to
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the
purpose of collecting any and all such moneys due under any Account,
Instrument, License or General Intangible or with respect to any
other Collateral whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, provided that if such taxes
are being contested
16
in good faith and by appropriate proceedings, the Administrative
Agent and the Lenders will consult with the Company before making
any such payment; and
(iii) (A) to direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (B) to ask or demand for,
collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect
of or arising out of any Collateral; (C) to sign and indorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of
the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce
any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against the Company with respect
to any Collateral; (F) to settle, compromise or adjust any suit,
action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (G) to assign any Patent
or Trademark (along with the goodwill of the business to which any
such Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative
Agent shall in its sole discretion determine; and (H) generally, to
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner thereof for
all purposes, and to do, at the Administrative Agent's option and
the Company's expense, at any time, or from time to time, all acts
and things which the Administrative Agent reasonably deems necessary
to protect, preserve or realize upon the Collateral and the
Administrative Agent's and the Lenders' Liens thereon and to effect
the intent of this Security Agreement, all as fully and effectively
as the Company might do.
The Company hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) Other Powers. The Company also authorizes the Administrative
Agent and the Lenders, at any time and from time to time, to execute, in
connection with the sale provided for in Section 8 hereof, any
indorsement, assignments or other instruments of conveyance or transfer
with respect to the Collateral.
(c) No Duty on Administrative Agent's or Lenders' Part. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely
to protect the Administrative Agent's and the Lenders' interests in the
Collateral and shall not impose any duty upon the Administrative Agent or
any Lender to exercise any such powers. The Administrative Agent and the
Lenders shall be accountable only for amounts that they
17
actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to the Company for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct or failure to comply
with mandatory provisions of applicable law.
7. Performance by Administrative Agent of Company's Obligations. If
the Company fails to perform or comply with any of its agreements contained
herein and the Administrative Agent, as provided for by the terms of this
Security Agreement, shall itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum equal to 2% plus the
Alternate Base Rate, shall be payable by the Company to the Administrative Agent
on demand and shall constitute Obligations secured hereby; provided, however,
that the Administrative Agent shall in any event first have given the Company
written notice of its intent to do the same and the Company shall not have,
within 30 days of such notice (or such shorter period as the Administrative
Agent may reasonably determine is necessary in order to preserve the benefits of
this Security Agreement with respect to any material portion of the Collateral),
paid such claim or obtained to the Administrative Agent's satisfaction the
release of the claim or Lien to which such notice relates.
8. Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent on behalf of the Lenders may exercise, in addition to
all other rights and remedies granted to them in this Security Agreement and in
any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Company or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give an option or
options to purchase, or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in the Company, which right or equity is
hereby waived and released. The Administrative Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Administrative Agent may elect subject
to subsection 4.9 of the Credit Agreement,
18
and only after such application and after the payment by the Administrative
Agent of any other amount required by any provision of law, including, without
limitation, Section 9-504(1)(c) of the Code, need the Administrative Agent
account for the surplus, if any, to the Company. To the extent permitted by
applicable law, the Company waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder, except to the extent arising from the
gross negligence or willful misconduct of the Administrative Agent or such
Lender. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The Company shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay the Obligations and the
fees and disbursements of any attorneys employed by the Administrative Agent or
any Lender to collect such deficiency.
9. Amendments, etc. with Respect to the Obligations. The Company
shall remain obligated hereunder, and the Collateral shall remain subject to the
Lien granted hereby notwithstanding that, without any reservation of rights
against the Company, and without notice to or further assent by the Company, any
demand for payment of any of the Obligations made by the Administrative Agent,
the Issuing Lender or any Lender may be rescinded by the Administrative Agent,
the Issuing Lender or any Lender, and any of the Obligations continued, and the
Obligations, or the liability of the Company or any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered, or released by the Administrative Agent, the Issuing Lender or any
Lender, and the Credit Agreement, the Notes, the other Credit Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or part, as the Administrative
Agent, the Issuing Lender or any Lender may deem advisable from time to time,
and any guarantee, right of offset or other collateral security at any time held
by the Administrative Agent, the Issuing Lender or any Lender for the payment of
the Obligations may be sold, exchanged, waived, surrendered or released. None of
the Administrative Agent, the Issuing Lender or any Lender shall have any
obligation to protect, secure, perfect or insure this or any other Lien at any
time held by it as security for the Obligations or any property subject thereto.
The Company waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent, the Issuing Lender or any Lender upon this Security
Agreement; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred in reliance upon this Security
Agreement; and all dealings between the Company and the Administrative Agent,
the Issuing Lender or any Lender, shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Security Agreement. The
Company waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Company with respect to the Obligations.
10. Limitation on Duties Regarding Preservation of Collateral. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar
19
property for its own account. Neither the Administrative Agent, any Lender, nor
any of their respective directors, officers, employees or agents shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Company or
otherwise.
11. Delegation of Duties. The Administrative Agent may execute any
of its duties under this Security Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care, except as otherwise provided in subsection
10.3 of the Credit Agreement.
12. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
13. Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Section Headings. The section headings used in this Security
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
15. No Waiver; Cumulative Remedies. Neither the Administrative
Agent, the Issuing Lender nor any Lender shall by any act (except by a written
instrument pursuant to Section 16 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, the Issuing Lender or any
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
the Issuing Lender or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent, the Issuing Lender or such Lender would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
16. Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Security Agreement represents the entire agreement of the
Company with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein or in the other
20
Credit Documents. None of the terms or provisions of this Security Agreement may
be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Company and the Administrative Agent, provided that
any provision of this Security Agreement may be waived by the Administrative
Agent in a written letter or agreement executed by the Administrative Agent or
by telex or facsimile transmission from the Administrative Agent. This Security
Agreement shall be binding upon the successors and assigns of the Company and
shall inure to the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
17. Notices. All notices, requests and demands to or upon the
Company or the Administrative Agent or any Lender to be effective shall be in
writing or by telecopy or telex and unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or, in
the case of mail, three days after deposit in the postal system, first class
postage prepaid, or, in the case of telecopy notice, when sent, or, in the case
of telex notice, when sent, answerback received, addressed to a party at the
address provided for such party in the Credit Agreement.
18. Counterparts. This Security Agreement may be executed by one or
more of the parties hereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
19. Authority of Administrative Agent. The Company acknowledges that
the rights and responsibilities of the Administrative Agent under this Security
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Security Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Company, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and the Company shall not
be under any obligation, or entitlement, to make any inquiry respecting such
authority.
20. Releases. The Administrative Agent and the Lenders agree to
cooperate with the Company and its Subsidiaries with respect to any sale
permitted by subsection 8.5 of the Credit Agreement and promptly take such
action and execute and deliver such instruments and documents necessary to
release the Liens and security interests created hereby relating to any of the
assets or property affected by any sale permitted by subsection 8.5 of the
Credit Agreement including, without limitation, any necessary Uniform Commercial
Code amendment, termination or partial termination statement.
21. Termination. This Security Agreement (other than with respect to
any cash collateral securing any outstanding Letter of Credit) shall terminate
when all the Obligations have
21
been paid in full, the Commitments are terminated and either no Letters of
Credit are outstanding or each outstanding Letter of Credit has been cash
collateralized so that it is fully secured to the satisfaction of the
Administrative Agent. Upon such termination, the Administrative Agent shall
reassign and redeliver (or cause to be reassigned and redelivered) to the
Company, or to such person or persons as the Company shall designate, or to
whomever may be lawfully entitled to receive such surplus, against receipt, such
of the Collateral (if any) (other than with respect to any cash collateral
securing any outstanding Letter of Credit) as shall not have been sold or
otherwise applied by the Administrative Agent pursuant to the terms hereof and
shall still be held by it hereunder, together with appropriate instruments or
reassignment and release. Any such reassignment and release shall be without
recourse upon or warranty by the Administrative Agent (other than a warranty
that the Administrative Agent has not assigned its rights and interests
hereunder to any Person) and at the expense of the Company.
IN WITNESS WHEREOF, the Company and the Administrative Agent have
caused this Security Agreement to be duly executed and delivered as of the date
first above written.
TWCC ACQUISITION CORP.
By:_________________________________
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:_________________________________
Title:
Schedule I to
Security Agreement
Copyrights and Copyright Licenses
Schedule II to
Security Agreement
Patents and Patent Licenses
Schedule III to
Security Agreement
Trademarks and Trademark Licenses
Schedule IV to
Security Agreement
Locations of Inventory and Equipment Locations
EXHIBIT F-1 TO
CREDIT AGREEMENT
FORM OF
HOLDINGS GUARANTEE
HOLDINGS GUARANTEE, dated as of October __, 1996, made by XXXXXX
HOLDINGS, INC., a Massachusetts corporation (the "Guarantor") in favor of THE
CHASE MANHATTAN BANK, a New York banking corporation, as administrative agent
(in such capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") that are parties to the Credit Agreement (as
hereafter defined).
W I T N E S S E T H :
WHEREAS, TWCC Acquisition Corp., a Massachusetts corporation (to be
merged with and into The Xxxxxxx Xxxxxx Company, a Massachusetts corporation,
the "Company"), is party to a Credit Agreement, dated as of the date hereof,
with the Administrative Agent and the Lenders (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Credit Agreement, the Lenders
severally agreed to make certain extensions of credit to the Company;
WHEREAS, the Guarantor owns directly 100% of the issued and
outstanding common and preferred stock of the Company;
WHEREAS, the Guarantor will derive substantial direct and indirect
benefit from the making of the extensions of credit; and
WHEREAS, under the Credit Agreement, the obligation of the Lenders
to make the extensions of credit to the Company on and after the date hereof is
conditioned upon, among other things, the execution and delivery by the
Guarantor of this Guarantee;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to enter into the Credit Agreement and to make their respective
extensions of credit to the Company under the Credit Agreement, the Guarantor
hereby agrees with and for the benefit of the Administrative Agent and the
Lenders as follows:
2
1. Defined Terms. As used in this Guarantee, terms defined in the
Credit Agreement or in the preamble or recitals hereto are used herein as
therein defined, and the following term shall have the following meaning:
"Obligations" means (i) the unpaid principal amount of, and interest
on (including interest accruing on or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company, whether or not a claim for such
post-filing or post-petition interest is allowed), the Loans and all other
obligations and liabilities of the Company to the Administrative Agent,
the Issuing Lender or the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, any Letter of Credit or L/C Application, the other Credit
Documents and any other document executed and delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of
counsel to the Administrative Agent, the Issuing Lender or to the Lenders
that are required to be paid by the Company pursuant to the terms of the
Credit Agreement) or otherwise and (ii) all obligations of the Company to
any Lender or Lenders or its or their Affiliates under or in respect of
any Interest Rate Agreement.
2. Guarantee. (a) The Guarantor hereby, unconditionally and
irrevocably, guarantees to the Administrative Agent and the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment by the Company when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, and the Guarantor further agrees
to pay any and all expenses (including, without limitation, all reasonable fees
and disbursements of counsel) which may be paid or incurred by the
Administrative Agent, the Issuing Lender or any Lender in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, the Guarantor under this Guarantee.
(b) No payment or payments made by any of the Company, the
Guarantor, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Lender from the Company, the Guarantor, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Guarantor hereunder which
shall, notwithstanding any such payment or payments other than payments made by
the Guarantor in respect of the Obligations or payments received or collected
from the Guarantor in respect of the Obligations, remain liable for the
Obligations until the Obligations are paid in full, the Commitments are
terminated and either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent.
(c) The Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability
3
hereunder, it will notify the Administrative Agent in writing that such payment
is made under this Guarantee for such purpose.
3. Right of Set-off. Upon the occurrence of any Event of Default
under any Credit Document, the Guarantor hereby irrevocably authorizes each
Lender at any time and from time to time without notice to the Guarantor, any
such notice being expressly waived by the Guarantor, to set off and appropriate
and apply any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender to or for the
credit or the account of the Guarantor, or any part thereof in such amounts as
such Lender may elect, against and on account of the obligations and liabilities
of the Guarantor to such Lender hereunder or under the Credit Agreement, the
Notes, or the other Credit Documents, as such Lender may elect, whether or not
the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. Each Lender agrees to notify the Guarantor promptly of any such
set-off and the application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender under this paragraph are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which such
Lender may have.
4. No Subrogation. Notwithstanding any payment or payments made by
the Guarantor hereunder or any set-off or application of funds of the Guarantor
by any Lender, the Guarantor shall not be entitled to be subrogated to any of
the rights of the Administrative Agent or any Lender against the Company or any
collateral security or guarantee or right of offset held by any Lender for the
payment of the Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from the Company in respect of payments made
by the Guarantor hereunder, and any such rights of subrogation and reimbursement
of the Guarantor are hereby waived until all amounts owing to the Administrative
Agent and the Lenders by the Company on account of the Obligations are paid in
full, the Commitments are terminated and either no Letters of Credit are
outstanding or each outstanding Letter of Credit has been cash collateralized so
that it is fully secured to the satisfaction of the Administrative Agent.
5. Amendments, etc. with respect to the Obligations; Waiver of
Rights. The Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor and without notice to or
further assent by the Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent, the Issuing Lender or any Lender
may be rescinded by such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent, the Issuing Lender or any Lender and the Credit
Agreement, the Notes, the other Credit Documents, any Letter of Credit, any
Interest Rate Agreement with any Lender or Lenders and any other collateral
security document or other guarantee or document in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Administrative Agent, the Issuing Lender and/or any Lender may deem advisable
from time to time, and any collateral security, guarantee or right of
4
offset at any time held by the Administrative Agent or any Lender for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against the Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on any other guarantor, and any failure by the
Administrative Agent or any Lender to make any such demand or to collect any
payments from any such other guarantor or any release of any such other
guarantor shall not relieve the Guarantor in respect of which a demand or
collection is not made, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Administrative Agent or any
Lender against the Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
6. Guarantee Absolute and Unconditional. The Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent, the
Issuing Lender or any Lender upon this Guarantee or acceptance of this
Guarantee; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee; and all dealings between the Company or
the Guarantor and the Administrative Agent, the Issuing Lender or any Lender
shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. The Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Company or the Guarantor with respect to the Obligations. The Guarantor
understands and agrees that this Guarantee shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity, regularity or enforceability of the Credit Agreement, the Notes, any
other Credit Document, the Letters of Credit, any Interest Rate Agreement with
any Lender or Lenders, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent, the Issuing Lender or any
Lender, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
the Company, the Guarantor or any other Person against the Administrative Agent,
the Issuing Lender or any Lender, or (c) any other circumstance whatsoever (with
or without notice to or knowledge of the Company or the Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of any of the Company for the Obligations, or of the Guarantor under
this Guarantee, in bankruptcy or in any other instance. When pursuing its rights
and remedies hereunder against the Guarantor, the Administrative Agent and/or
any Lender may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Company or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Lender to
pursue such other rights or remedies or to collect any payments from the Company
or any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the Company
or any such other Person or any such collateral security, guarantee or right of
offset, shall not relieve the Guarantor of any liability hereunder, and shall
not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against
the Guarantor. This Guarantee shall remain in full force and effect
5
and be binding in accordance with and to the extent of its terms upon the
Guarantor and the successors and assigns thereof, and shall inure to the benefit
of the Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Obligations and the
obligations of the Guarantor under this Guarantee shall have been satisfied by
payment in full, either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent and the Commitments shall be
terminated, notwithstanding that from time to time during the term of the Credit
Agreement the Company may be free from any Obligations.
7. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of the Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or of the Guarantor, or upon or as
a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Company or the Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
8. Payments. The Guarantor hereby guarantees that payments hereunder
will be paid in Dollars to the Administrative Agent without set-off or
counterclaim at the office of the Administrative Agent located at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X. or at such other office as the
Administrative Agent may notify to the Guarantor in accordance with Section 15.
9. Representations and Warranties. The Guarantor hereby represents
and warrants that:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has
the corporate power and authority and the legal right to own and operate
its property, to lease the property it operates and to conduct the
business in which it is currently engaged;
(b) it is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct or proposed conduct of its business
requires such qualification and is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not
reasonably be expected to have a material adverse effect on its business,
operations, assets or financial or other condition or on its ability to
perform its obligations under this Guarantee or the other Credit Documents
to which it is a party;
(c) it has the corporate power and authority and the legal right to
execute and deliver, and to perform its obligations under, this Guarantee
and the other Credit Documents to which the Guarantor is a party and to
grant the Liens granted by it pursuant to the other Credit Documents to
which the Guarantor is a party, and has taken all necessary corporate
action to authorize the execution, delivery and performance of this
Guarantee and the other Credit Documents to which the Guarantor is a party
and to grant the Liens granted by it pursuant to the other Credit
Documents to which it is a party;
6
(d) it owns 100% of the issued and outstanding shares of all classes
of Capital Stock of the Company and has Subsidiaries only as specified and
permitted under the terms of the Credit Agreement;
(e) no consent, license, permit, approval or authorization of, or
filing with, or notice or report to, or registration, filing or
declaration with, or other act by or in respect of, any arbitrator or
Governmental Authority and no consent of any other Person (including,
without limitation, any stockholder or creditor of such Guarantor), is
required in connection with the execution, delivery, performance, validity
or enforceability by or against the Guarantor of this Guarantee and the
other Credit Documents to which the Guarantor is a party;
(f) this Guarantee and the other Credit Documents to which the
Guarantor is a party have been duly executed and delivered on behalf of
the Guarantor and each of this Guarantee and the other Credit Documents to
which the Guarantor is a party constitutes a legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by
general principles of equity;
(g) the execution, delivery and performance of this Guarantee and
the other Credit Documents to which the Guarantor is a party do not and
will not violate any Requirement of Law or any material Contractual
Obligation of the Guarantor and will not result in the creation or
imposition of any Lien on any of the properties or revenues of the
Guarantor pursuant to any Requirement of Law or Contractual Obligation
other than the Liens created by the Holdings Pledge Agreement;
(h) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
the Guarantor, threatened by or against the Guarantor or against any of
its properties or revenues (i) with respect to this Guarantee or the other
Credit Documents to which the Guarantor is a party or any of the
transactions contemplated hereby or thereby or (ii) which could have a
material adverse effect on the business, operations, property or financial
condition of the Guarantor and its Subsidiaries taken as a whole or on the
ability of the Guarantor to perform its obligations under this Guarantee
or the other Credit Documents to which it is a party; and
(i) the Guarantor has filed or caused to be filed all tax returns
required to be filed by it, and has paid all taxes due on said returns or
on any assessments made against it (other than (a) those the amount or
validity of which is currently being contested in good faith by
appropriate proceedings for which adequate reserves have been provided on
its books and (b) those which, individually or in the aggregate, are not
material to the Guarantor and its Subsidiaries taken as a whole).
The Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by the Guarantor on each Borrowing Date occurring on or
after the date hereof under
7
the Credit Agreement on and as of such Borrowing Date as though made hereunder
on and as of such Borrowing Date.
10. Covenants. The Guarantor hereby covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Guarantee until the Obligations are paid in full and the Commitments are
terminated and either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent, the Guarantor shall engage in no
business other than holding the Capital Stock of the Company, and businesses
incidental thereto.
11. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Paragraph Headings. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. No Waiver; Cumulative Remedies. Neither the Administrative
Agent, the Issuing Lender nor any Lender shall by any act (except by a written
instrument pursuant to paragraph 14 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or event of default under any Credit Document or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Administrative Agent or any
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Administrative Agent or such
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
14. Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Guarantee represents the entire agreement of the Guarantor
with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein or in the other Credit Documents.
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Guarantor and the Administrative Agent, provided that any provision of this
Guarantee may be waived by the Administrative Agent and the Lenders in a letter
or agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Guarantee shall be binding upon
the successors and assigns of the Guarantor and shall inure to the benefit of
the Administrative Agent and the Lenders and their respective successors and
assigns. THIS
8
GUARANTEE SHALL BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
15. Notices. All notices, requests and demands to or upon the
Guarantor or the Administrative Agent or any Lender to be effective shall be in
writing or by telecopy or telex and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or, in
the case of mail, three days after deposit in the postal system, first class
postage pre-paid, or, in the case of telecopy notice, confirmation of receipt
received, or, in the case of telex notice, when sent, answerback received,
addressed to a party at the address provided for such party in the Credit
Agreement or Schedule I hereto, as the case may be, or to such other address as
may be hereafter notified to the parties hereto.
16. Counterparts. This Guarantee may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
17. Authority of Administrative Agent. The Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guarantee with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guarantee shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and the Guarantor shall not be under
any obligation, or entitlement, to make any inquiry respecting such authority.
18. Submission to Jurisdiction; Waivers. (a) The Guarantor hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Guarantee or any other Credit Document, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States for the Southern District of New York, and
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be affected by mailing a copy thereof by registered or
certified mail, postage prepaid, to the Guarantor at its address set forth
on Schedule I hereto or at such other address of which the Administrative
Agent shall have been notified pursuant to paragraph 14; and
9
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in other jurisdiction.
(b) The Guarantor and the Administrative Agent, on behalf of itself
and the Lenders, hereby unconditionally waive trial by jury in any legal action
or proceeding referred to in paragraph (a) above.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized officer as of
the day and year first above written.
XXXXXX HOLDINGS, INC.
By:_______________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:_______________________________
Name:
Title:
SCHEDULE I
Holdings Guarantee
Address of Guarantor
Xxxxxx Holdings, Inc.
c/o Gibson, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq./
Xxxxxxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
With a copy to:
The Xxxxxxx Xxxxxx Company
0000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
EXHIBIT F-2 TO
CREDIT AGREEMENT
FORM OF
SUBSIDIARIES' GUARANTEE
SUBSIDIARIES' GUARANTEE, dated as of October 30, 1996, made by each
of the corporations that are signatories hereto (the "Guarantors"), in favor of
THE CHASE MANHATTAN BANK, a New York banking corporation, as administrative
agent (in such capacity, the "Administrative Agent") for the banks and other
financial institutions (the "Lenders") that are parties to the Credit Agreement
(as hereafter defined).
W I T N E S S E T H :
WHEREAS, TWCC Acquisition Corp., a Massachusetts corporation (to be
merged with and into The Xxxxxxx Xxxxxx Company, a Massachusetts corporation,
the "Company"), is party to a Credit Agreement, dated as of the date hereof,
with the Administrative Agent and the Lenders (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Credit Agreement, the Lenders
severally agreed to make certain extensions of credit to the Company;
WHEREAS, the Company owns directly all of the issued and outstanding
Capital Stock of each Guarantor;
WHEREAS, the proceeds of the extensions of credit will be used in
part to enable the Company to make valuable transfers (as determined as provided
herein) to each Guarantor in connection with the operation of its respective
business;
WHEREAS, the Company and the Guarantors are engaged in related
businesses, and each Guarantor will derive substantial direct and indirect
benefit from the making of the extensions of credit; and
WHEREAS, under the Credit Agreement, the obligation of the Lenders
to make the extensions of credit to the Company on and after the date hereof is
conditioned upon, among other things, the execution and delivery by the
Guarantors of this Guarantee;
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NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to enter into the Credit Agreement and to make their respective
extensions of credit to the Company under the Credit Agreement, the Guarantors
hereby agree with and for the benefit of the Administrative Agent and the
Lenders as follows:
1. Defined Terms. As used in this Guarantee, terms defined in the
Credit Agreement or in the preamble or recitals hereto are used herein as
therein defined, and the following term shall have the following meaning:
"Obligations" (i) shall mean the unpaid principal amount of, and
interest on (including interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not
a claim for such post-filing or post-petition interest is allowed), the
Loans and all other obligations and liabilities of the Company to the
Administrative Agent, the Issuing Lender or the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, any Letter of Credit or L/C Application, the other
Credit Documents and any other document executed and delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of
counsel to the Administrative Agent, the Issuing Lender or the Lenders
that are required to be paid by the Company or the Guarantors pursuant to
the terms of the Credit Agreement) or otherwise, and (ii) all obligations
of the Company to any Lender or Lenders or its or their Affiliates under
or in respect of any Interest Rate Agreement.
2. Guarantee. (a) Each Guarantor hereby, jointly and severally,
unconditionally and irrevocably, guarantees to the Agent, for the ratable
benefit of the Lenders and their respective successors, indorsees, transferees
and assigns, the prompt and complete payment and performance by the Company when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations, and each of the Guarantors further agrees to pay any and all
expenses (including, without limitation, all reasonable fees and disbursements
of counsel) which may be paid or incurred by the Administrative Agent, the
Issuing Lender or any Lender in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantors under this Guarantee.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors.
(c) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Guarantee or affecting the rights of the Administrative
Agent or any Lender hereunder.
(d) No payment or payments made by any of the Company, the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any Lender from the Company, the Guarantors, any
other guarantor or any other Person by virtue
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of any action or proceeding or any set-off or appropriation or application at
any time or from time to time in reduction of or in payment of the Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of
any Guarantor hereunder which shall, notwithstanding any such payment or
payments other than payments made by such Guarantor in respect of the
Obligations or payments received or collected from such Guarantor in respect of
the Obligations, remain liable for the Obligations up to the maximum liability
of such Guarantor hereunder until the Obligations are paid in full, the
Commitments are terminated and either no Letters of Credit are outstanding or
each outstanding Letter of Credit has been cash collateralized so that it is
fully secured to the satisfaction of the Administrative Agent.
(e) Each Guarantor agrees that whenever, at any time, or from time
to time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.
3. Right of Set-off. Upon the occurrence of any Event of Default
under any Credit Document, each Guarantor hereby irrevocably authorizes each
Lender at any time and from time to time without notice to such Guarantor or any
other guarantor, any such notice being expressly waived by each Guarantor, to
set off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender to or for the credit or the account of the Guarantor, or
any part thereof in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of such Guarantor to such Lender
hereunder or under the Credit Agreement, the Notes, or the other Credit
Documents, as such Lender may elect, whether or not the Administrative Agent or
any Lender has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Lender agrees to
notify such Guarantor promptly of any such set-off and the application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
paragraph are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
4. No Subrogation. Notwithstanding any payment or payments made by
any of the Guarantors hereunder or any set-off or application of funds of any of
the Guarantors by any Lender, no Guarantor shall be entitled to be subrogated to
any of the rights of the Administrative Agent or any Lender against the Company
or any other Guarantor or any collateral security or guarantee or right of
offset held by any Lender for the payment of the Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or reimbursement from the
Company or any other Guarantor in respect of payments made by such Guarantor
hereunder, and any such rights of subrogation and reimbursement of the
Guarantors are hereby waived until all amounts owing to the Administrative Agent
and the Lenders by the Company on account of the Obligations are paid in full,
the Commitments are terminated and either no Letters of Credit are outstanding
or each outstanding Letter of Credit has been cash collateralized so that it is
fully secured to the satisfaction of the Administrative Agent.
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5. Amendments, etc. with respect to the Obligations; Waiver of
Rights. Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent, the Issuing Lender or any Lender
may be rescinded by such party and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent, the Issuing Lender or any Lender and the Credit
Agreement, the Notes, the other Credit Documents, any Letter of Credit, any
Interest Rate Agreement and any other collateral security document or other
guarantee or document in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent,
the Issuing Lender and/or any Lender may deem advisable from time to time, and
any collateral security, guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Obligations may be
sold, exchanged, waived, surrendered or released. Neither the Administrative
Agent nor any Lender shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Obligations or for
this Guarantee or any property subject thereto. When making any demand hereunder
against any particular Guarantor, the Administrative Agent or any Lender may,
but shall be under no obligation to, make a similar demand on any other
Guarantor or guarantor, and any failure by the Administrative Agent or any
Lender to make any such demand or to collect any payments from any such other
Guarantor or guarantor or any release of any such other Guarantor or guarantor
shall not relieve such Guarantor in respect of which a demand or collection is
not made or any of the Guarantors not so released of their several obligations
or liabilities hereunder, and shall not impair or affect the rights and
remedies, express or implied, or as a matter of law, of the Administrative Agent
or any Lender against any of the Guarantors. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
6. Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent, the
Issuing Lender or any Lender upon this Guarantee or acceptance of this
Guarantee; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee; and all dealings between the Company or
any of the Guarantors and the Administrative Agent, the Issuing Lender or any
Lender shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Guarantee. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Company or any of the Guarantors with respect to the Obligations. Each Guarantor
understands and agrees that this Guarantee shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity, regularity or enforceability of the Credit Agreement, the Notes, any
other Credit Document, the Letters of Credit, any Interest Rate Agreements, any
of the Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent, the Issuing Lender or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be
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available to or be asserted by the Company, any of the Guarantors or any other
Person against the Administrative Agent, the Issuing Lender or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Company or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of any of the Company for the
Obligations, or of any Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent and/or any Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Company or any other Person or against any collateral security or guarantee for
the Obligations or any right of offset with respect thereto, and any failure by
the Administrative Agent or any Lender to pursue such other rights or remedies
or to collect any payments from the Company or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Company or any such other Person or any
such collateral security, guarantee or right of offset, shall not relieve such
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against such Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon each Guarantor and the successors and assigns thereof,
and shall inure to the benefit of the Administrative Agent and the Lenders, and
their respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of each Guarantor under this Guarantee shall
have been satisfied by payment in full, either no Letters of Credit are
outstanding or each outstanding Letter of Credit has been cash collateralized so
that it is fully secured to the satisfaction of the Administrative Agent and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Company may be free from any Obligations.
7. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of the Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or of any Guarantor, or upon or as
a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Company or any Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
8. Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid in Dollars to the Administrative Agent without set-off or
counterclaim at the office of the Administrative Agent located at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X. or at such other office as the
Administrative Agent may notify to the Guarantor in accordance with Section 15.
9. Representations and Warranties. Each Guarantor hereby represents
and warrants that:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has
the corporate power and
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authority and the legal right to own and operate its property, to lease
the property it operates and to conduct the business in which it is
currently engaged;
(b) it is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct or proposed conduct of its business
requires such qualification and is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not
reasonably be expected to have a material adverse effect on its business,
operations, assets or financial or other condition or on its ability to
perform its obligations under this Guarantee or the other Credit Documents
to which it is a party;
(c) it has the corporate power and authority and the legal right to
execute and deliver, and to perform its obligations under, this Guarantee
and the other Credit Documents to which the Guarantor is a party and to
grant the Liens granted by it pursuant to the other Credit Documents to
which such Guarantor is a party, and has taken all necessary corporate
action to authorize the execution, delivery and performance of this
Guarantee and the other Credit Documents to which such Guarantor is a
party and to grant the Liens granted by it pursuant to the other Credit
Documents to which it is a party;
(d) it is a Subsidiary of the Company;
(e) no consent, license, permit, approval or authorization of, or
filing with, or notice or report to, or registration, filing or
declaration with, or other act by or in respect of, any arbitrator or
Governmental Authority and no consent of any other Person (including,
without limitation, any stockholder or creditor of any Guarantor), is
required in connection with the execution, delivery, performance, validity
or enforceability by or against any Guarantor of this Guarantee and the
other Credit Documents to which each Guarantor is a party;
(f) this Guarantee and the other Credit Documents to which each
Guarantor is a party have been duly executed and delivered on behalf of
such Guarantor and each of this Guarantee and the other Credit Documents
to which each Guarantor is a party constitutes a legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and by
general principles of equity;
(g) the execution, delivery and performance of this Guarantee and
the other Credit Documents to which each Guarantor is a party do not and
will not violate any Requirement of Law or any material Contractual
Obligation of such Guarantor and will not result in the creation or
imposition of any Lien on any of the properties or revenues of such
Guarantor pursuant to any Requirement of Law or Contractual Obligation
other than the Liens created by the Subsidiaries Pledge Agreement and
Subsidiaries Security Agreements;
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(h) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
such Guarantor, threatened by or against such Guarantor or against any of
its properties or revenues of any Guarantor (i) with respect to this
Guarantee or the other Credit Documents to which such Guarantor is a party
or any of the transactions contemplated hereby or thereby or (ii) which
could have a material adverse effect on the business, operations, property
or financial condition of any Guarantor and any such Guarantor's
Subsidiaries taken as a whole or on the ability of any Guarantor to
perform its obligations under this Guarantee or the other Credit Documents
to which it is a party; and
(i) each Guarantor has filed or caused to be filed all tax returns
required to be filed by it, and has paid all taxes due on said returns or
on any assessments made against it (other than (a) those the amount or
validity of which is currently being contested in good faith by
appropriate proceedings for which adequate reserves have been provided on
its books and (b) those which, individually or in the aggregate, are not
material to such Guarantor and its Subsidiaries taken as a whole).
(j) Each Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by each Guarantor on each
Borrowing Date occurring on or after the date hereof under the Credit
Agreement on and as of such Borrowing Date as though made hereunder on and
as of such Borrowing Date.
10. Covenants. Each Guarantor hereby covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Guarantee until the Obligations are paid in full and the Commitments are
terminated and no Letter of Credit is outstanding, each Guarantor will comply
with provisions of Sections 8 and 9 of the Credit Agreement to the extent such
provisions apply to such Guarantors.
11. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Paragraph Headings. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. No Waiver; Cumulative Remedies. Neither the Administrative
Agent, the Issuing Lender nor any Lender shall by any act (except by a written
instrument pursuant to paragraph 13 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or event of default under any Credit Document or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the Administrative Agent or any
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise
8
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
14. Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Guarantee represents the entire agreement of each Guarantor
with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein or in the other Credit Documents.
None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Guarantor and the Administrative Agent, provided that any provision of this
Guarantee may be waived by the Administrative Agent and the Lenders in a letter
or agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Guarantee shall be binding upon
the successors and assigns of each Guarantor and shall inure to the benefit of
the Administrative Agent and the Lenders and their respective successors and
assigns. THIS GUARANTEE SHALL BE GOVERNED BY, AND BE CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
15. Notices. All notices, requests and demands to or upon each
Guarantor or the Administrative Agent or any Lender to be effective shall be in
writing or by telecopy or telex and, unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or, in
the case of mail, three days after deposit in the postal system, first class
postage pre-paid, or, in the case of telecopy notice, confirmation of receipt
received, or, in the case of telex notice, when sent, answerback received,
addressed to a party at the address provided for such party in the Credit
Agreement or Schedule I hereto, as the case may be, or to such other address as
may be hereafter notified to the parties hereto.
16. Counterparts. This Guarantee may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
17. Authority of Administrative Agent. Each Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guarantee with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guarantee shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and each Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Guarantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
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18. Submission to Jurisdiction; Waivers. (a) Each Guarantor hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Guarantee or any other Credit Document, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States for the Southern District of New York, and
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be affected by mailing a copy thereof by registered or
certified mail, postage prepaid, to such Guarantor at its address set
forth on Schedule I hereto or at such other address of which the
Administrative Agent shall have been notified pursuant to paragraph 17;
and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in other jurisdiction.
(b) Each Guarantor and the Administrative Agent, on behalf of itself
and the Lenders, hereby unconditionally waive trial by jury in any legal action
or proceeding referred to in paragraph (a) above.
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IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized officer as of
the day and year first above written.
CARTER'S DE SAN XXXXX, INC.
By:_______________________________
Name:
Title:
Accepted and agreed to:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:_______________________________
Name:
Title:
SCHEDULE I
Subsidiary Guarantee
Address of Guarantors
CARTER'S DE SAN XXXXX, INC.
c/o Gibson, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq./
Xxxxxxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
With a copy to:
The Xxxxxxx Xxxxxx Company
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
EXHIBIT G-1 TO
CREDIT AGREEMENT
FORM OF
HOLDINGS PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of October __, 1996, made by XXXXXX
HOLDINGS, INC., a Massachusetts corporation (the "Pledgor"), in favor of THE
CHASE MANHATTAN BANK, a New York banking corporation, as administrative agent
(in such capacity, the "Administrative Agent") for the several lenders (the
"Lenders") from time to time parties to the Credit Agreement, dated as of the
date hereof (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among TWCC Acquisition Corp., a Massachusetts
corporation (to be merged with and into The Xxxxxxx Xxxxxx Company, the
"Company"), the Lenders and the Administrative Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make loans to, and the Issuing Lender (as defined in the
Credit Agreement) has agreed to issue and certain of the Lenders have agreed to
participate in certain letters of credit for the account of the Company upon the
terms and subject to the conditions set forth therein, such loans being
evidenced by the notes issued by the Company;
WHEREAS, the Pledgor is the owner of the shares of Pledged Stock (as
hereinafter defined) issued by the Company listed on Schedule I hereto; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective loans to, and the obligation of the Issuing
Lender to issue and the Lenders to participate in letters of credit for the
account of, the Company under the Credit Agreement that the Pledgor shall have
executed and delivered this Pledge Agreement to the Administrative Agent for the
ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Issuing Lender and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective loans and
the Issuing Lender to issue and the Lenders to participate in the letters of
credit under the Credit Agreement, the Pledgor hereby agrees with the
Administrative Agent, for the ratable benefit of the Lenders, as follows:
2
1. Defined Terms. Unless otherwise defined herein, terms that are
defined in the Credit Agreement and used herein are so used as so defined, and
the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code from time to time in effect
in the State of New York.
"Collateral" means the Pledged Stock and all Proceeds.
""Obligations" means (i) the unpaid principal amount of, and
interest on (including interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not
a claim for such post-filing or post-petition interest is allowed), the
Loans and all other obligations and liabilities of the Company to the
Administrative Agent, the Issuing Lender or the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, any Letter of Credit or L/C Application, the other
Credit Documents and any other document executed and delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of
counsel to the Administrative Agent, the Issuing Lender or to the Lenders
that are required to be paid by the Company pursuant to the terms of the
Credit Agreement) or otherwise, and (ii) all obligations of the Company to
any Lender or Lenders or its or their Affiliates under or in respect of
any Interest Rate Agreement.
"Pledge Agreement" means this Pledge Agreement, as amended,
supplemented or otherwise modified from time to time.
"Pledged Stock" means the shares of capital stock of the Company
listed on Schedule I hereto, together with all stock certificates, options
or rights of any nature whatsoever that may be issued or granted by the
Company to the Pledgor while this Pledge Agreement is in effect.
"Proceeds" means all "proceeds", as such term is defined in Section
9-306(1) of the Code on the date hereof, of the Pledged Stock, and, in any
event, shall include, without limitation, all dividends or other income
from the Pledged Stock, collections thereon or distributions with respect
thereto.
2. Pledge; Grant of Security Interest. The Pledgor hereby delivers
to the Administrative Agent, for the ratable benefit of the Lenders, all
certificates or instruments representing or evidencing the Pledged Stock on the
date hereof, and hereby transfers and grants to the Administrative Agent, for
the ratable benefit of the Lenders, a first priority security interest in all of
the Pledgor's right, title and interest in the Collateral, as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations.
3
3. Stock Powers. Concurrently with the delivery to the
Administrative Agent of each certificate representing one or more shares of
Pledged Stock, the Pledgor shall deliver an undated stock power covering such
certificate, duly executed in blank by the Pledgor.
4. Representations and Warranties. The Pledgor represents and
warrants that:
(a) the shares of Pledged Stock constitute (i) all the issued and
outstanding shares of all classes of the Capital Stock of the Company owned by
the Pledgor and (ii) on the date hereof, 100% of the issued and outstanding
shares of all classes of the Capital Stock of the Company;
(b) all the shares of Pledged Stock have been duly and validly
issued and are fully paid and nonassessable;
(c) the Pledgor is the record and beneficial owner of the Pledged
Stock, free of any and all Liens or options in favor of, or claims of, any other
Person, except the Lien created by this Pledge Agreement; and
(d) upon delivery to the Administrative Agent of the stock
certificates evidencing the Pledged Stock, the Lien granted pursuant to this
Pledge Agreement will constitute a valid, perfected first priority Lien on the
Collateral (except, with respect to Proceeds, only to the extent permitted by
Section 9-306 of the Code), enforceable as such against all creditors of the
Pledgor and any Persons purporting to purchase any Collateral from the Pledgor.
The Pledgor agrees that the foregoing representations and warranties shall be
deemed to have been made by the Pledgor on each Borrowing Date occurring on or
after the date hereof under the Credit Agreement, on and as of such Borrowing
Date as though made hereunder on and as of such date.
5. Covenants. The Pledgor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Pledge Agreement until the Obligations are paid in full and the Commitments are
terminated and either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent:
(a) If the Pledgor shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of capital stock of the Company, whether in addition to, in
substitution of, as a conversion of, or in exchange for any shares of the
Pledged Stock, or otherwise in respect thereof, the Pledgor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by the Pledgor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by the
Pledgor and with, if the Administrative Agent so
4
requests, signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
the Pledgor will not (i) sell, assign, transfer, exchange, or otherwise dispose
of, or grant any option with respect to, the Collateral, or (ii) create, incur
or permit to exist any Lien or option in favor of, or any claim of any Person
with respect to, any of the Collateral, or any interest therein, except for the
Lien provided for by this Pledge Agreement. The Pledgor will defend the right,
title and interest of the Administrative Agent, the Issuing Lender and the
Lenders in and to the Collateral against the claims and demands of all Persons
whomsoever.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the Pledgor, the Pledgor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purposes of obtaining or preserving the full benefits
of this Pledge Agreement and of the rights and powers herein granted. If any
amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the
Administrative Agent, duly endorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Pledge
Agreement.
(d) The Pledgor agrees to pay, and to save the Administrative Agent,
the Issuing Lender and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Pledge Agreement.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall
have occurred and be continuing, the Pledgor shall be permitted to receive all
cash dividends paid by the Company to the extent permitted in the Credit
Agreement in respect of the Pledged Stock and to exercise all voting and
corporate rights with respect to the Pledged Stock, provided, however, that the
Pledgor agrees that it shall not vote in any way which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, the
Notes, the Security Documents or any of the other Credit Documents. The
Administrative Agent shall, at the Pledgor's sole cost and expense, execute and
deliver (or cause to be executed and delivered) to the Pledgor all proxies and
other instruments as the Pledgor may reasonably request for the purpose of
enabling the Pledgor to exercise the voting and other rights that it is entitled
to exercise pursuant to this Section 6.
7. Rights of the Lenders and the Administrative Agent. (a) If an
Event of Default shall occur and be continuing, (i) the Administrative Agent
shall have the right to receive any and all cash dividends paid in respect of
the Pledged Stock and make application thereof to the Obligations in such order
as the Administrative Agent may determine, and (ii) all shares of the Pledged
Stock may be registered in the name of the Administrative Agent or its nominee,
and, subject to the terms of this Agreement, the Administrative Agent or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to such shares of the Pledged Stock
5
at any meeting of shareholders of the Company or otherwise and (B) any and all
rights of conversion, exchange, subscription and any other rights, privileges or
options pertaining to such shares of the Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of the Company, or upon the exercise by the Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such shares
of the Pledged Stock, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as it may determine), all without liability except to account for
property actually received by it and except for its gross negligence or willful
misconduct or failure to comply with the provisions of Section 12, but the
Administrative Agent shall have no duty to the Pledgor to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.
(b) The rights of the Administrative Agent, the Issuing Lender and
the Lenders hereunder shall not be conditioned or contingent upon the pursuit by
the Administrative Agent, the Issuing Lender or any Lender of any right or
remedy against any other Person which may be or become liable in respect of all
or any part of the Obligations or against any collateral security therefor,
guarantee therefor or right of offset with respect thereto. None of the
Administrative Agent, the Issuing Lender and any Lender shall be liable for any
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so, nor shall the Administrative Agent be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Pledgor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The Administrative Agent agrees to
release promptly to the Pledgor any dividends, cash, securities, instruments and
other property paid, payable or otherwise distributed in respect of the
Collateral which it may receive under Section 7(a) if, prior to the occurrence
of an acceleration of any of the Obligations, all Defaults and Events of Default
have been waived or are no longer continuing.
(c) The Administrative Agent may execute any of its duties under
this Pledge Agreement by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care, except as otherwise provided in subsection 10.3 of the Credit Agreement.
8. Remedies. In the event that any portion of the Obligations has
been declared or becomes due and payable in accordance with the terms of the
Credit Agreement, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted in this Pledge
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, the Administrative
Agent, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon the Pledgor, the Company or any other Person (all and each
of which demands, defenses, advertisements and notices are hereby waived), may
in such circumstances forthwith collect, receive, appropriate and realize
6
upon the Collateral, or any part thereof, and/or may forthwith sell, assign,
give option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of the Administrative Agent,
the Issuing Lender or any Lender or elsewhere upon such terms and conditions as
it may deem commercially reasonable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent, the Issuing Lender or any Lender shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby waived and released. The Administrative Agent
promptly shall apply any Proceeds from time to time held by it and the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred in respect thereof or incidental to the care or safekeeping of any of
the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent, the Issuing Lender and the Lenders hereunder, including,
without limitation, reasonable attorneys' fees and disbursements of counsel to
the Administrative Agent, to the payment in whole or in part of the Obligations,
in such order as the Administrative Agent may elect subject to subsection 4.9 of
the Credit Agreement, and only after such application and after the payment by
the Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the Pledgor. To the
extent permitted by applicable law, the Pledgor waives all claims, damages and
demands it may acquire against the Administrative Agent, the Issuing Lender or
any Lender arising out of the lawful exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition. The Pledgor further waives
and agrees not to assert any rights or privileges which it may acquire under
Section 9-112 of the Code. The Pledgor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay the Obligations and the fees and disbursements of any attorneys employed
by the Administrative Agent or any Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the Administrative
Agent shall determine to exercise its right to sell any or all of the Pledged
Stock pursuant to Section 8, and if in the opinion of the Administrative Agent
it is necessary or advisable to have the Pledged Stock, or that portion thereof
to be sold, registered under the provisions of the Securities Act of 1933, as
amended (the "Securities Act"), the Pledgor will cause the Company to (i)
execute and deliver, and cause the directors and officers of the Company to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof to
be sold, under the provisions of the Securities Act, (ii) use its best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of 90 days from the date of the first public
offering of the Pledged Stock, or that portion thereof to be sold, and (iii)
make all amendments thereto and/or to the related prospectus that, in the
opinion of the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange
7
Commission applicable thereto. The Pledgor agrees to cause the Company to comply
with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions that the Administrative Agent shall reasonably designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) that will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) The Pledgor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers that will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale conducted
in a manner that the Administrative Agent in good faith believes to be
commercially reasonable under the circumstances shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay the sale of any of the Pledged Stock for the period
of time necessary to permit the Company to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if the Company would agree to do so.
(c) The Pledgor further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock, pursuant to this Section 9
valid and binding and in compliance with any and all other applicable
Requirements of Law. The Pledgor further agrees that a breach of any of the
covenants contained in this Section 9 will cause irreparable injury to the
Administrative Agent, the Issuing Lender and the Lenders, that the
Administrative Agent, the Issuing Lender and the Lenders have no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 9 shall be specifically enforceable against
the Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants.
10. No Subrogation. Notwithstanding any payment or payments made by
the Pledgor hereunder, or any setoff or application of funds of the Pledgor by
any Lender, or the receipt of any amounts by the Administrative Agent, the
Issuing Lender or any Lender with respect to any of the Collateral, the Pledgor
shall not be entitled to be subrogated to any of the rights of the
Administrative Agent, the Issuing Lender or any Lender against the Company or
against any other collateral security held by the Administrative Agent, the
Issuing Lender or any Lender for the payment of the Obligations, nor shall the
Pledgor seek any reimbursement from the Company in respect of payments made by
the Pledgor in connection with the Collateral, or amounts realized by the
Administrative Agent, the Issuing Lender or any Lender in connection with the
Collateral, and any such rights of subrogation and reimbursement of the Pledgor
are hereby waived until all amounts owing to the Administrative Agent and the
Lenders by the Company on account of the Obligations are paid in full, the
Commitments are terminated and either no Letters of Credit are outstanding or
each outstanding Letter of Credit has been cash collateralized so that it is
fully secured to the satisfaction of the Administrative Agent.
8
11. Amendments, etc. with Respect to the Obligations. The Pledgor
shall remain obligated hereunder, and the Collateral shall remain subject to the
Lien granted hereby, notwithstanding that, without any reservation of rights
against the Pledgor, and without notice to or further assent by the Pledgor, any
demand for payment of any of the Obligations made by the Administrative Agent,
the Issuing Lender or any Lender may be rescinded by the Administrative Agent,
the Issuing Lender or such Lender, and any of the Obligations continued, and the
Obligations, or the liability of the Company or any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered, or released by the Administrative Agent, the Issuing Lender or any
Lender, and the Credit Agreement, the Notes, the Security Documents, the other
Credit Documents, any Interest Rate Agreement entered into with any Lender or
Lenders and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as
the Lenders (or the Required Lenders, as the case may be) may deem advisable
from time to time, and any guarantee, right of offset or other collateral
security at any time held by the Administrative Agent, the Issuing Lender or any
Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. None of the Administrative Agent, the Issuing Lender
and the Lenders shall have any obligation to protect, secure, perfect or insure
any other Lien at any time held by it as security for the Obligations or any
property subject thereto. The Pledgor waives any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice of or proof
of reliance by the Administrative Agent, the Issuing Lender or any Lender upon
this Pledge Agreement; the Obligations, and any of them shall conclusively be
deemed to have been created, contracted or incurred in reliance upon this Pledge
Agreement; and all dealings between the Company and the Pledgor, on the one
hand, and the Administrative Agent, the Issuing Lender and the Lenders, on the
other, shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Pledge Agreement. The Pledgor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Company or the Pledgor with respect to the Obligations.
12. Limitation on Duties Regarding Collateral. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar securities and property for its own
account. None of the Administrative Agent, the Issuing Lender, any Lender nor
any of their respective directors, officers, employees or agents shall be liable
for failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any Collateral upon the request of the Pledgor or otherwise.
13. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
14. Severability. Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any
9
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
15. Section Headings. The section headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
16. No Waiver; Cumulative Remedies. Neither the Administrative
Agent, the Issuing Lender nor any Lender shall by any act (except by a written
instrument pursuant to Section 17 hereof) be deemed to have waived any right or
remedy hereunder or to have acquiesced in any default of any obligation under
any Credit Document or in any breach of any of the terms and conditions hereof
or thereof. No failure to exercise, nor any delay in exercising, on the part of
the Administrative Agent, the Issuing Lender or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Administrative Agent, the Issuing Lender or any Lender of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Administrative Agent, the Issuing Lender or such
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.
17. Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Pledge Agreement represents the entire agreement of the
Pledgor with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein or in the other Credit Documents.
None of the terms or provisions of this Pledge Agreement may be amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Administrative Agent, provided that any provision of this
Pledge Agreement may be waived by the Administrative Agent in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Pledge Agreement shall be
binding upon the successors and assigns of the Pledgor and shall inure to the
benefit of the Administrative Agent, the Issuing Lender and the Lenders and
their respective successors and assigns. THIS PLEDGE AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
18. Notices. Notices by the Administrative Agent to the Pledgor or
the Company may be given by mail, by telex or by facsimile transmission,
addressed or transmitted to the Pledgor or the Company at its address or
transmission number set forth in subsection 11.2 of the Credit Agreement in the
case of the Company and on Schedule II hereto in the case of the Pledgor and
shall be effective (a) in the case of mail, three days after deposit in the
postal system, first class postage pre-paid, and (b) in the case of telex or
facsimile notices, when sent. The Pledgor and the Company may change their
respective addresses and transmission numbers by written notice to the
Administrative Agent.
10
19. Counterparts. This Pledge Agreement may be executed by one or
more of the parties hereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
20. Irrevocable Authorization and Instruction to Company. The
Pledgor hereby authorizes and instructs the Company to comply with any
instruction received by it from the Administrative Agent in writing that (a)
states that an Event of Default has occurred and is continuing and (b) is
otherwise in accordance with the terms of this Pledge Agreement, without any
other or further instructions from the Pledgor, and the Pledgor agrees that the
Company shall be fully protected in so complying.
21. Authority of Administrative Agent. The Pledgor acknowledges that
the rights and responsibilities of the Administrative Agent under this Pledge
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Pledge Agreement shall, as between the
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Pledgor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
neither the Pledgor nor the Company shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
22. Termination. This Pledge Agreement shall terminate when all the
Obligations have been fully paid and performed and the Commitments terminated.
Upon such termination, the Administrative Agent shall on its behalf and on
behalf of the Lenders reassign and redeliver (or cause to be reassigned and
redelivered) to the Pledgor, or to such person or persons as the Pledgor shall
designate or to whomever may be lawfully entitled to receive such surplus,
against receipt, such of the Collateral (if any) as shall not have been sold or
otherwise applied by the Administrative Agent pursuant to the terms hereof and
shall still be held by it hereunder, together with appropriate instruments of
reassignment and release. Any such reassignment shall be without recourse upon
or warranty by the Administrative Agent (other than a warranty that the
Administrative Agent has not assigned its rights and interests hereunder to any
other Person) and at the sole cost and expense of the Pledgor.
11
IN WITNESS WHEREOF, the undersigned have caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
XXXXXX HOLDINGS, INC.
By: _______________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By: _______________________________
Name:
Title:
ACKNOWLEDGEMENT AND CONSENT
The Company referred to in the foregoing Pledge Agreement hereby
acknowledges receipt of a copy thereof and agrees to be bound thereby and to
comply with the terms thereof insofar as such terms are applicable to it. The
Company agrees to notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement. The Company further agrees that the terms of Section 9(c) of the
Pledge Agreement shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it under or pursuant to or arising out of
Section 9 of the Pledge Agreement.
TWCC ACQUISITION CORP.
By: _______________________________
Name:
Title:
SCHEDULE I
Holdings Pledge Agreement
DESCRIPTION OF PLEDGED STOCK
Class Stock Certi- No. of
Issuer of Stock ficate No. Shares
------ -------- ---------- ------
SCHEDULE II
Holdings Pledge Agreement
ADDRESS OF PLEDGOR
Xxxxxx Holdings, Inc.
c/o Gibson, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq./
Xxxxxxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
With a copy to:
The Xxxxxxx Xxxxxx Company
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
EXHIBIT G-2 TO
CREDIT AGREEMENT
FORM OF
COMPANY PLEDGE AGREEMENT
Agreement (this "Agreement"), dated as of October __, 1996, made by
TWCC ACQUISITION CORP., a Massachusetts corporation (to be merged with and into
The Xxxxxxx Xxxxxx Company, the "Company"), in favor of THE CHASE MANHATTAN
BANK, a New York banking corporation, as administrative agent (in such capacity,
the "Administrative Agent"), for the several lenders (the "Lenders") from time
to time parties to the Credit Agreement, dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Company, the Lenders and the Administrative Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make loans to, and the Issuing Lender (as defined in the
Credit Agreement) has agreed to issue and certain of the Lenders have agreed to
participate in certain letters of credit for the account of, the Company upon
the terms and subject to the conditions set forth therein, such loans being
evidenced by the notes issued by the Company;
WHEREAS, the Company is the legal and beneficial owner of the shares
of Pledged Stock (as hereinafter defined) issued by the Issuers (as hereinafter
defined); and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective loans to, and the obligation of the Issuing
Lender to issue and the Lenders to participate in letters of credit for the
account of, the Company under the Credit Agreement that the Company shall have
executed and delivered this Agreement to the Administrative Agent for the
ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Issuing Lender and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective loans and
the Issuing Lender to issue and the Lenders to participate in the letters of
credit under the Credit Agreement, the Company hereby agrees with the
Administrative Agent, for the ratable benefit of the Lenders, as follows:
1. Defined Terms. Unless otherwise defined herein, terms that are
defined in the Credit Agreement and used herein are so used as so defined, and
the following terms shall have the following meanings:
2
"Agreement" means this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"Code" means the Uniform Commercial Code from time to time in effect
in the State of New York.
"Collateral" means the Domestic Collateral and the Foreign
Collateral.
"Domestic Collateral" means the Domestic Pledged Stock and all
Proceeds thereof.
"Domestic Issuers" means the collective reference to Issuers
incorporated in any state of the United States.
"Domestic Pledged Stock" means the shares of capital stock of the
Domestic Issuers listed on Schedule I hereto, together with all stock
certificates, options or rights of any nature whatsoever that may be
issued or granted by any Domestic Issuer to the Company while this
Agreement is in effect.
"Foreign Collateral" means the Foreign Pledged Stock and all
Proceeds thereof.
"Foreign Issuers" means the collective reference to all Issuers that
are not Domestic Issuers.
"Foreign Pledged Stock" means the shares of capital stock of the
Foreign Issuers listed on Schedule I hereto, together with all stock
certificates, options or rights of any nature whatsoever that may be
issued or granted by any Foreign Issuer to the Company while this
Agreement is in effect; provided, however, that in no event shall the
"Foreign Pledged Stock" in respect of any Foreign Issuer exceed at any
time 65% of the shares of any class of the capital stock of such Issuer
and any shares of capital stock of any Foreign Issuer in excess of 65% of
the shares of any class of capital stock of such Issuer held at any time
by the Administrative Agent shall not be "Foreign Pledged Stock" and shall
not be subject to the security interest granted hereby and shall be held
by the Security Agent solely for the benefit of the Company.
"Issuers" means the collective reference to the companies identified
on Schedule 1 attached hereto as the issuers of the Pledged Stock and any
other direct Subsidiaries of the Company created or acquired after the
date hereof; individually, each an "Issuer."
"Obligations": means (i) the unpaid principal amount of, and
interest on (including interest accruing on or after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not
a claim for such post-filing or post-petition interest is allowed), the
Loans and all other obligations and liabilities of the Company to the
Administrative Agent, the Issuing Lender or the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, any Letter of Credit or L/C Application, the other
Credit Documents and any other document executed and delivered or given in
connection therewith or herewith, whether on account of principal,
interest,
3
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of counsel to
the Administrative Agent, the Issuing Lender or to the Lenders that are
required to be paid by the Company pursuant to the terms of the Credit
Agreement) or otherwise, and (ii) all obligations of the Company to any
Lender or Lenders or its or their Affiliates under or in respect of any
Interest Rate Agreement.
"Pledged Stock" means the Domestic Pledged Stock and the Foreign
Pledged Stock.
"Proceeds" means all "proceeds", as such term is defined in Section
9-306(1) of the Code on the date hereof, of the Pledged Stock, and, in any
event, shall include, without limitation, all dividends or other income
from the Pledged Stock, collections thereon or distributions with respect
thereto.
2. Pledge; Grant of Security Interest. The Company hereby delivers
to the Administrative Agent, for the ratable benefit of the Lenders, all
certificates or instruments representing or evidencing the Pledged Stock on the
date hereof, and hereby transfers and grants to the Administrative Agent, for
the ratable benefit of the Lenders, a first priority security interest in all of
the Company's right, title and interest in the Domestic Collateral, and a
security interest in all of the Company's right, title or interest in the
Foreign Collateral, as collateral security for the prompt and complete payment
and performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
3. Stock Powers. Concurrently with the delivery to the
Administrative Agent of each certificate representing one or more shares of
Pledged Stock, the Company shall deliver an undated stock power covering such
certificate, duly executed in blank by the Company.
4. Representations and Warranties. The Company represents and
warrants that:
(a) the shares of Domestic Pledged Stock constitute (i) all the
issued and outstanding shares of all classes of the Capital Stock of each
Domestic Issuer owned by the Company and (ii) on the date hereof, 100% of the
issued and outstanding shares of all classes of the Capital Stock of each
Domestic Issuer;
(b) all the shares of Domestic Pledged Stock have been duly and
validly issued and are fully paid and nonassessable;
(c) the Company is the record and beneficial owner of the Pledged
Stock, free of any and all Liens or options in favor of, or claims of, any other
Person, except the Lien created by this Agreement; and
(d) upon delivery to the Administrative Agent of the stock
certificates evidencing the Domestic Pledged Stock, the Lien granted pursuant to
this Agreement will constitute a valid, perfected first priority Lien on the
Domestic Collateral (except, with respect
4
to Proceeds, only to the extent permitted by Section 9-306 of the Code),
enforceable as such against all creditors of the Company and any Persons
purporting to purchase any Domestic Collateral from the Company.
The Company agrees that the foregoing representations and warranties shall be
deemed to have been made by the Company on each Borrowing Date occurring on or
after the date hereof under the Credit Agreement, on and as of such Borrowing
Date as though made hereunder on and as of such date.
5. Covenants. The Company covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Agreement until the Obligations are paid in full and the Commitments are
terminated and either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent:
(a) If the Company shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of capital stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for any shares of the
Pledged Stock, or otherwise in respect thereof, the Company shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by the Company to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by the
Company and with, if the Administrative Agent so requests, signature guaranteed,
to be held by the Administrative Agent, subject to the terms hereof, as
additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
the Company will not (i) except as permitted by subsection 8.5 of the Credit
Agreement, sell, assign, transfer, exchange, or otherwise dispose of, or grant
any option with respect to, the Collateral, or (ii) create, incur or permit to
exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Collateral, or any interest therein, except for the Lien provided
for by this Agreement. The Company will defend the right, title and interest of
the Administrative Agent, the Issuing Lender and the Lenders in and to the
Collateral against the claims and demands of all Persons whomsoever.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of the Company, the Company
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purposes of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall
5
be immediately delivered to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.
(d) The Company agrees to pay, and to save the Administrative Agent,
the Issuing Lender and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
6. Cash Dividends; Voting Rights. Unless an Event of Default shall
have occurred and be continuing, the Company shall be permitted to receive all
cash dividends paid by each Issuer to the extent permitted in the Credit
Agreement in respect of the Pledged Stock and to exercise all voting and
corporate rights with respect to the Pledged Stock, provided, however, that the
Company agrees that it shall not vote in any way which would be inconsistent
with or result in any violation of any provision of the Credit Agreement, the
Notes, the Security Documents or any of the other Credit Documents. The
Administrative Agent shall, at the Company's sole cost and expense, execute and
deliver (or cause to be executed and delivered) to the Company all proxies and
other instruments as the Company may reasonably request for the purpose of
enabling the Company to exercise the voting and other rights that it is entitled
to exercise pursuant to this Section 6.
7. Rights of the Lenders and the Administrative Agent. (a) If an
Event of Default shall occur and be continuing, (i) the Administrative Agent
shall have the right to receive any and all cash dividends paid in respect of
the Pledged Stock and make application thereof to the Obligations in such order
as the Administrative Agent may determine, and (ii) all shares of the Pledged
Stock may be registered in the name of the Administrative Agent or its nominee,
and, subject to the terms of this Agreement, the Administrative Agent or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to such shares of the Pledged Stock at any meeting of shareholders of
such Issuer or otherwise and (B) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options pertaining to such
shares of the Pledged Stock as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Pledged Stock upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of the Issuer, or upon
the exercise by the Company or the Administrative Agent of any right, privilege
or option pertaining to such shares of the Pledged Stock, and in connection
therewith, the right to deposit and deliver any and all of the Pledged Stock
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as it may determine), all without
liability except to account for property actually received by it and except for
its gross negligence or willful misconduct or failure to comply with the
provisions of Section 12, but the Administrative Agent shall have no duty to the
Company to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(b) The rights of the Administrative Agent, the Issuing Lender and
the Lenders hereunder shall not be conditioned or contingent upon the pursuit by
the Administrative Agent, the Issuing Lender or any Lender of any right or
remedy against any other Person which may be
6
or become liable in respect of all or any part of the Obligations or against any
collateral security therefor, guarantee therefor or right of offset with respect
thereto. None of the Administrative Agent, the Issuing Lender and any Lender
shall be liable for any failure to demand, collect or realize upon all or any
part of the Collateral or for any delay in doing so, nor shall the
Administrative Agent be under any obligation to sell or otherwise dispose of any
Collateral upon the request of the Company or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
Administrative Agent agrees to release promptly to the Company any dividends,
cash, securities, instruments and other property paid, payable or otherwise
distributed in respect of the Collateral which it may receive under Section 7(a)
if, prior to the occurrence of an acceleration of any of the Obligations, all
Defaults and Events of Default have been waived or are no longer continuing.
(c) The Administrative Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care, except
as otherwise provided in subsection 10.3 of the Credit Agreement.
8. Remedies. In the event that any portion of the Obligations has
been declared or becomes due and payable in accordance with the terms of the
Credit Agreement, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted in this Agreement
and in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Company, any Issuer or any other Person (all and each of which demands,
defenses, advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Administrative Agent, the Issuing
Lender or any Lender or elsewhere upon such terms and conditions as it may deem
commercially reasonable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Administrative Agent, the Issuing Lender or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in the Company, which right
or equity is hereby waived and released. The Administrative Agent promptly shall
apply any Proceeds from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred in respect
thereof or incidental to the care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of the Administrative Agent,
the Issuing Lender and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements of counsel to the Administrative
Agent, to the payment in whole or in part of the Obligations, in such order as
the Administrative Agent may elect subject to subsection 4.9
7
of the Credit Agreement, and only after such application and after the payment
by the Administrative Agent of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to the Company. To the
extent permitted by applicable law, the Company waives all claims, damages and
demands it may acquire against the Administrative Agent, the Issuing Lender or
any Lender arising out of the lawful exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition. The Company further waives
and agrees not to assert any rights or privileges which it may acquire under
Section 9-112 of the Code. The Company shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay the Obligations and the fees and disbursements of any attorneys employed
by the Administrative Agent or any Lender to collect such deficiency.
9. Registration Rights; Private Sales. (a) If the Administrative
Agent shall determine to exercise its right to sell any or all of the Pledged
Stock pursuant to Section 8, and if in the opinion of the Administrative Agent
it is necessary or advisable to have the Pledged Stock, or that portion thereof
to be sold, registered under the provisions of the Securities Act of 1933, as
amended (the "Securities Act"), the Company will cause such Issuer to (i)
execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the Administrative Agent,
necessary or advisable to register the Pledged Stock, or that portion thereof to
be sold, under the provisions of the Securities Act, (ii) use its best efforts
to cause the registration statement relating thereto to become effective and to
remain effective for a period of 90 days from the date of the first public
offering of the Pledged Stock, or that portion thereof to be sold, and (iii)
make all amendments thereto and/or to the related prospectus that, in the
opinion of the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. The
Company agrees to cause each Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions that the
Administrative Agent shall reasonably designate and to make available to its
security holders, as soon as practicable, an earnings statement (which need not
be audited) that will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) The Company recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers that will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Company acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale conducted
in a manner that the Administrative Agent in good faith believes to be
commercially reasonable under the circumstances shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent shall be
under no obligation to delay the sale of any of the Pledged Stock for the period
of time necessary to permit such Issuer to register such securities
8
for public sale under the Securities Act, or under applicable state securities
laws, even if such Issuer would agree to do so.
(c) The Company further agrees to use its best efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock, pursuant to this Section 9
valid and binding and in compliance with any and all other applicable
Requirements of Law. The Company further agrees that a breach of any of the
covenants contained in this Section 9 will cause irreparable injury to the
Administrative Agent, the Issuing Lender and the Lenders, that the
Administrative Agent, the Issuing Lender and the Lenders have no adequate remedy
at law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 9 shall be specifically enforceable against
the Company, and the Company hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants.
10. Amendments, etc. with Respect to the Obligations. The Company
shall remain obligated hereunder, and the Collateral shall remain subject to the
Lien granted hereby, notwithstanding that, without any reservation of rights
against the Company, and without notice to or further assent by the Company, any
demand for payment of any of the Obligations made by the Administrative Agent,
the Issuing Lender or any Lender may be rescinded by the Administrative Agent,
the Issuing Lender or such Lender, and any of the Obligations continued, and the
Obligations, or the liability of each Issuer or any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered, or released by the Administrative Agent, the Issuing Lender or any
Lender, and the Credit Agreement, the Notes, the Security Documents, and the
other Credit Documents, any Interest Rate Agreement entered into with any Lender
or Lenders and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Lenders (or the Required Lenders, as the case may be) may deem
advisable from time to time, and any guarantee, right of offset or other
collateral security at any time held by the Administrative Agent, the Issuing
Lender or any Lender for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. None of the Administrative Agent, the Issuing
Lender and the Lenders shall have any obligation to protect, secure, perfect or
insure any other Lien at any time held by it as security for the Obligations or
any property subject thereto. The Company waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of
or proof of reliance by the Administrative Agent, the Issuing Lender or any
Lender upon this Agreement; the Obligations, and any of them shall conclusively
be deemed to have been created, contracted or incurred in reliance upon this
Agreement; and all dealings between each Issuer and the Company, on the one
hand, and the Administrative Agent, the Issuing Lender and the Lenders, on the
other, shall likewise be conclusively presumed to have been had or consummated
in reliance upon this Agreement. The Company waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon each
Issuer or the Company with respect to the Obligations.
11. Limitation on Duties Regarding Collateral. The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in
9
its possession, under Section 9-207 of the Code or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with similar
securities and property for its own account. None of the Administrative Agent,
the Issuing Lender, any Lender nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Company or otherwise.
12. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
13. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Section Headings. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
15. No Waiver; Cumulative Remedies. Neither the Administrative
Agent, the Issuing Lender nor any Lender shall by any act (except by a written
instrument pursuant to Section 17 hereof) be deemed to have waived any right or
remedy hereunder or to have acquiesced in any default of any obligation under
any Credit Document or in any breach of any of the terms and conditions hereof
or thereof. No failure to exercise, nor any delay in exercising, on the part of
the Administrative Agent, the Issuing Lender or any Lender, any right, power or
privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
A waiver by the Administrative Agent, the Issuing Lender or any Lender of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Administrative Agent, the Issuing Lender or such
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.
16. Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Agreement represents the entire agreement of the Company
with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein or in the other Credit Documents.
None of the terms or provisions of this Agreement may be amended, supplemented
or otherwise modified except by a written instrument executed by the Company and
the Administrative Agent, provided that any provision of this Agreement may be
waived by the Administrative Agent in a letter or agreement executed by the
Administrative Agent or by telex or facsimile transmission from the
Administrative Agent. This Agreement shall be binding upon the successors and
assigns of the Company and shall inure to the benefit of the Administrative
Agent, the Issuing Lender and the Lenders and their respective successors and
assigns. THIS AGREEMENT SHALL BE
10
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
17. Notices. Notices by the Administrative Agent to the Company or
any Issuer may be given by mail, by telex or by facsimile transmission,
addressed or transmitted to the Company or such Issuer at its address or
transmission number set forth in subsection 11.2 of the Credit Agreement in the
case of the Company and on Schedule II hereto in the case of each Issuer and
shall be effective (a) in the case of mail, with respect to a Domestic Issuer,
three days after deposit in the postal system, first class postage pre-paid, and
with respect to a Foreign Issuer, ten days after deposit in the postal system,
first class postage pre-paid, and (b) in the case of telex or facsimile notices,
when sent. The Company and any Issuer may change their respective addresses and
transmission numbers by written notice to the Administrative Agent.
18. Counterparts. This Agreement may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
19. Irrevocable Authorization and Instruction to Company. The
Company hereby authorizes and instructs each Issuer to comply with any
instruction received by it from the Administrative Agent in writing that (a)
states that an Event of Default has occurred and is continuing and (b) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from the Company, and the Company agrees that each Issuer
shall be fully protected in so complying.
20. Authority of Administrative Agent. The Company acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Company, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and neither the Company nor any
Issuer shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
21. Agent's Appointment as Attorney-in-Fact. (a) The Company hereby
irrevocably constitutes and appoints the Agent and any officer or agent of the
Agent, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of the Company
and in the name of the Company or in the Agent's own name, from time to time in
the Agent's discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
11
(b) The Company hereby ratifies all that said attorneys shall lawfully do
or cause to be done pursuant to the power of attorney granted in paragraph
21(a). All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
22. Termination. This Agreement shall terminate when all the
Obligations have been fully paid and performed and the Commitments terminated.
Upon such termination, the Administrative Agent shall on its behalf and on
behalf of the Lenders reassign and redeliver (or cause to be reassigned and
redelivered) to the Company, or to such person or persons as the Company shall
designate or to whomever may be lawfully entitled to receive such surplus,
against receipt, such of the Collateral (if any) as shall not have been sold or
otherwise applied by the Administrative Agent pursuant to the terms hereof and
shall still be held by it hereunder, together with appropriate instruments of
reassignment and release. Any such reassignment shall be without recourse upon
or warranty by the Administrative Agent (other than a warranty that the
Administrative Agent has not assigned its rights and interests hereunder to any
other Person) and at the sole cost and expense of the Company.
12
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed and delivered as of the date first above written.
TWCC ACQUISITION CORP.
By: __________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By: __________________________________
Name:
Title:
ACKNOWLEDGEMENT AND CONSENT
Each Issuer referred to in the foregoing Pledge Agreement hereby
acknowledge receipt of a copy thereof and agrees to be bound thereby and to
comply with the terms thereof insofar as such terms are applicable to it. Each
Issuer agrees to notify the Administrative Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement. Each Issuer further agrees that the terms of Section 9(c) of the
Pledge Agreement shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it under or pursuant to or arising out of
Section 9 of the Pledge Agreement.
CARTER'S DE SAN XXXXX, INC.
By: __________________________________
Name:
Title:
CARTERCO, S.A.
By: __________________________________
Name:
Title:
CARTER'S XX XXXXXXXX, X.X.
By: __________________________________
Name:
Title:
SCHEDULE I
Company Pledge Agreement
DESCRIPTION OF PLEDGED STOCK
Class Stock Certi- No. of
Issuer of Stock ficate No. Shares
------ -------- ---------- ------
SCHEDULE II
Company Pledge Agreement
ADDRESS OF COMPANY
Xxxxxx Holdings, Inc.
c/o Gibson, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq./
Xxxxxxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
With a copy to:
The Xxxxxxx Xxxxxx Company
0000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxx, Esq.
Telecopy: (000) 000-0000
EXHIBIT H to
CREDIT AGREEMENT
FORM OF
LETTER OF CREDIT PARTICIPATION CERTIFICATE
[Date]
[Name of Participating Lender]
[Address of Participating Lender]
Dear Sirs:
Pursuant to subsection 3.8(b) of the Credit Agreement, dated as of
October __, 1996 (as the same may from time to time be amended, supplemented or
otherwise modified, the "Credit Agreement"; terms defined in the Credit
Agreement being used herein with their respective defined meanings) among TWCC
Acquisition Corp. (to be merged with and into The Xxxxxxx Xxxxxx Company), the
Lenders parties thereto, Bankers Trust Company, as syndication agent, Xxxxxxx
Sachs Credit Partners L.P., as documentation agent and The Chase Manhattan Bank,
as Administrative Agent, the undersigned hereby acknowledges receipt from you on
the date hereof of the L/C Participating Interest in the amount of
_______________ DOLLARS ($_________) in the following Letter of Credit and the
L/C Application relating thereto:
[Describe Letter of Credit (i.e. Letter of Credit number, face
amount, date of issuance and beneficiary)]
Very truly yours,
THE CHASE MANHATTAN BANK,
as Issuing Lender
By:_____________________________
Name:
Title:
EXHIBIT I TO
CREDIT AGREEMENT
FORM OF
SWING LINE LOAN PARTICIPATION CERTIFICATE
[Date]
[Name of Lender]
________________
________________
Dear Sirs:
Pursuant to subsection 3.4(c) of the Credit Agreement, dated as of
October __, 1996 among TWCC Acquisition Corp. (to be merged with and into The
Xxxxxxx Xxxxxx Company), the several lenders (the "Lenders") parties thereto and
The Chase Manhattan Bank, as Administrative Agent for the Lenders, the
undersigned hereby acknowledges receipt from you of $__________ as payment for a
participating interest in the following Swing Line Loan:
Date of Swing Line Loan: ______________________________________
Principal Amount of Swing Line Loan: __________________________
Very truly yours,
THE CHASE MANHATTAN BANK, as
Swing Line Lender
By:_____________________________
Name:
Title:
EXHIBIT J TO
CREDIT AGREEMENT
FORM OF
SUBSECTION 4.11(d)(2) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of October
__, 1996 among TWCC Acquisition Corp. (to be merged with and into The Xxxxxxx
Xxxxxx Company), the banks and other financial institutions from time to time
party thereto and The Chase Manhattan Bank, as Administrative Agent (the "Credit
Agreement"). Pursuant to the provisions of subsection 4.11(d)(2) of the Credit
Agreement, the undersigned hereby certifies that it is not a "bank" as such term
is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended.
[NAME OF LENDER]
By: __________________________
Title:
Date:
COPYRIGHT SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October 30, 1996 made by TWCC
ACQUISITION CORP., a Massachusetts corporation (to be merged with and into The
Xxxxxxx Xxxxxx Company, the "Company"), in favor of THE CHASE MANHATTAN BANK, a
New York banking corporation, as administrative agent (in such capacity, the
"Administrative Agent") for the several lenders (the "Lenders") from time to
time parties to the Credit Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of the date hereof
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Company, the Lenders and the Administrative Agent, the
Lenders have severally agreed to make loans to, and the Issuing Lender (as
defined in the Credit Agreement) has agreed to issue and certain of the other
Lenders have agreed to participate in letters of credit for the account of, the
Company upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective loans to, and the obligation of the Issuing
Lender to issue and the Lenders to participate in letters of credit for the
account of, the Company under the Credit Agreement that the Company shall have
executed and delivered this Security Agreement to the Administrative Agent for
the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
make their respective loans to, and to issue or participate in letters of credit
for the account of, the Company under the Credit Agreement, the Company hereby
agrees with the Administrative Agent, for the ratable benefit of the Lenders, as
follows:
ARTICLE I
SECURITY INTERESTS
1.1 Grant of Security Interest. (a) As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Company hereby
grants to the Administrative Agent for the ratable benefit of the Lenders a
continuing security interest in all of the right, title and interest of the
Company in, to and under (i) all Copyrights and Copyright Licenses, whether now
existing or hereafter from time to time acquired; and (ii) all Proceeds and
Products thereof (all of the above, collectively, the "Collateral").
2
(b) The security interest of the Administrative Agent under this
Agreement extends to all Collateral of the kind which is the subject of
this Agreement which the Company may acquire at any time during the
continuation of this Agreement.
ARTICLE II
SPECIAL PROVISIONS CONCERNING COPYRIGHTS
2.1 Rights of Administrative Agent and Lenders; Limitations on
Administrative Agent's and Lenders' Obligations. (a) Company Remains Liable
under Copyright Licenses. Anything herein to the contrary notwithstanding, the
Company shall remain liable under each of the Copyright Licenses to observe and
perform all the material conditions and obligations to be observed and performed
by it thereunder, all in accordance with the terms of any agreement giving rise
to each such Copyright License. Neither the Administrative Agent nor any Lender
shall have any obligation or liability under any Copyright License by reason of
or arising out of this Security Agreement or the receipt by the Administrative
Agent or any Lender of any payment relating to such Copyright License pursuant
hereto, nor shall the Administrative Agent or any Lender be obligated in any
manner to perform any of the obligations of the Company under or pursuant to any
Copyright License, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Copyright License, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
(b) Notice to Contracting Parties. At any time after an Event of
Default has occurred and so long as such Event of Default shall be
continuing, upon the request of the Administrative Agent the Company
shall, and the Administrative Agent may (with concurrent notice to the
Company thereof), notify parties to the Copyright Licenses that the
Copyright Licenses have been assigned to the Administrative Agent for the
ratable benefit of the Lenders and that payments in respect thereof shall
be made directly to the Administrative Agent. At any time after an Event
of Default shall have occurred and be continuing, the Administrative Agent
may in its own name or in the name of others communicate with parties to
the Copyright Licenses to verify with them to its satisfaction the
existence, amount and terms thereof.
2.2 Representations and Warranties. The Company hereby represents
and warrants that: (i) Schedule I hereto includes all material Copyrights in
which the Company has any colorable claim of ownership as of the date hereof;
(ii) to the best of the Company's knowledge, except as set forth on Schedule I,
each Copyright is valid, subsisting, unexpired and enforceable and has not been
abandoned. Except as set forth in Schedule I, none of such Copyrights is the
subject of any licensing or franchise agreement. All licenses of the Company's
Copyrights are in force and, to the best knowledge of the Company, not in
default. No holding, decision or judgment has been rendered by any Governmental
Authority with respect to any Copyright which would limit, cancel or question
the validity of any Copyright. Except as set
3
forth on Schedule I, no action or proceeding is pending or, to the knowledge of
the Company, threatened (i) seeking to limit, cancel or question the validity of
any material Copyright or the Company's ownership thereof, or (ii) which, if
adversely determined, would have a material adverse effect on the value of any
material Copyright.
2.3 Covenants. The Company covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full, the Commitments are
terminated and either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent: (a) the Company (i) will employ the
Copyright for each material published work with such notice of copyright as may
be required by law to secure copyright protection and (ii) will not do any act
or knowingly omit to do any act whereby any material Copyright may become
invalidated and:
(A) will not do any act, or omit to do any act, whereby any
material Copyright may become injected into the public domain;
(B) shall notify the Administrative Agent immediately if it
knows, or has reason to know, that any material Copyright may become
injected into the public domain or of any adverse determination or
development (including, without limitation, the institution of, or
any such determination or development in, any court or tribunal in
the United States or any other country) regarding the Company's
ownership of any such Copyright or its validity;
(C) will take all necessary steps as it shall deem appropriate
under the circumstances, to maintain and pursue each application
(and to obtain the relevant registration) and to maintain each
registration of each material Copyright owned by the Company
including, without limitation, filing of applications for renewal,
where necessary; and
(D) will promptly notify the Administrative Agent of any
material infringement of any material Copyright of the Company of
which it becomes aware and will take such actions as it shall
reasonably deem appropriate under the circumstances to protect such
Copyright, including, where appropriate, the bringing of suit for
infringement, seeking injunctive relief and seeking to recover any
and all damages for such infringement.the Company will not, except
with respect to any Copyright that the Company shall reasonably
determine is of immaterial economic value to it or otherwise
reasonably determine so to do, do any act, or omit to do any act,
whereby any Copyright may become abandoned or dedicated.
2.4 Administrative Agent's Appointment as Attorney-in-Fact. The
Company hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Company and in the name of the Company or
4
in its own name, from time to time after the occurrence, and during the
continuation, of an Event of Default in the Administrative Agent's discretion,
for the purpose of carrying out the terms of this Security Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Security Agreement, and, without limiting the generality of the foregoing,
the Company hereby gives the Administrative Agent the power and right, on behalf
of the Company, without notice to or assent by the Company, to do the following:
(a) in the name of the Company or its own name, or otherwise, to
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Copyright License or with respect to any other Collateral and to file any
claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Administrative Agent for the
purpose of collecting any and all such moneys due under any Copyright
License or with respect to any other Collateral whenever payable;
(b) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, provided that if such taxes are being
contested in good faith and by appropriate proceedings, the Administrative
Agent and the Lenders will consult with the Company before making any such
payment; and
(c) (i) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (ii) to ask or demand for, collect, receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;
(iii) to commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the
Collateral or any thereof and to enforce any other right in respect of any
Collateral; (iv) to defend any suit, action or proceeding brought against
the Company with respect to any Collateral; (v) to settle, compromise or
adjust any suit, action or proceeding described in clause (iv) above and,
in connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (vi) to assign any Copyright
throughout the world for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole discretion
determine; and (vii) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Administrative Agent were the absolute
owner thereof for all purposes, and to do, at the Administrative Agent's
option and the Company's expense, at any time, or from time to time, all
acts and things which the Administrative Agent reasonably deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' Liens thereon and to effect the intent of this
Security Agreement, all as fully and effectively as the Company might do.
5
The Company hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
2.5 Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent on behalf of the Lenders may exercise, in addition to
all other rights and remedies granted to them in this Security Agreement and in
any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Company or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give an option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Administrative Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in the Company, which right or equity is
hereby waived and released. The Administrative Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation, realization
or sale, after deducting all reasonable costs and expenses of every kind
incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Administrative Agent may elect subject
to subsection 4.9 of the Credit Agreement, and only after such application and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
Company. To the extent permitted by applicable law, the Company waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder, except
to the extent arising from the gross negligence or willful misconduct of the
Administrative Agent or such Lender. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition. The Company shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
ARTICLE III
6
DEFINITIONS
Unless otherwise defined herein or in the preamble or recitals
hereto, terms which are defined in the Credit Agreement and used herein are so
used as so defined and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Copyright License" means any written agreement, naming the Company,
as licensor or licensee, granting any right in the United States to use
any Copyright including, without limitation, any referred to in Schedule I
hereto.
"Copyrights" means all of the following to the extent the Company
now or hereafter has any right, title or interest: (a) all United States
copyrights and all registrations and applications therefor, including,
without limitation, any referred to in Schedule I hereto, and (b) all
renewals of such copyrights.
"Obligations" means (i) the unpaid principal amount of, and interest
on (including interest accruing on or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company, whether or not a claim for such
post-filing or post-petition interest is allowed), the Loans and all other
obligations and liabilities of the Company to the Administrative Agent,
the Issuing Lender or the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, any Letter of Credit or L/C Application, the other Credit
Documents and any other document executed and delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of
counsel to the Administrative Agent, the Issuing Lender or to the Lenders
that are required to be paid by the Company pursuant to the terms of the
Credit Agreement) or otherwise, and (ii) all obligations of the Company to
any Lender or Lenders or its or their Affiliates under or in respect of
any Interest Rate Agreement.
"Proceeds" means "proceeds", as such term is defined in Section
9-306(1) of the Code and, to the extent not included in such definition,
shall include, without limitation, (a) any and all proceeds of any
insurance, indemnity, warranty, guaranty or letter of credit payable to
the Company, from time to time with respect to any of the Collateral, (b)
all payments (in any form whatsoever) paid or payable to the Company from
time to time in connection with any taking of all or any part of the
Collateral by any Governmental Authority or any Person acting under color
of Governmental Authority, (c) all judgments in favor of the Company in
respect of the Collateral and (d) all other amounts from time to time paid
or payable or received or receivable under or in connection with any of
the Collateral.
7
"Products" are used herein as so defined in the Code.
ARTICLE IV
MISCELLANEOUS
4.1 Amendments, etc. with Respect to the Obligations. The Company
shall remain obligated hereunder, and the Collateral shall remain subject to the
Lien granted hereby notwithstanding that, without any reservation of rights
against the Company, and without notice to or further assent by the Company, any
demand for payment of any of the Obligations made by the Administrative Agent,
the Issuing Lender or any Lender may be rescinded by the Administrative Agent,
the Issuing Lender or any Lender, and any of the Obligations continued, and the
Obligations, or the liability of the Company or any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered, or released by the Administrative Agent, the Issuing Lender or any
Lender, and the Credit Agreement, the Notes, the other Credit Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or part, as the Administrative
Agent, the Issuing Lender or any Lender may deem advisable from time to time,
and any guarantee, right of offset or other collateral security at any time held
by the Administrative Agent, the Issuing Lender or any Lender for the payment of
the Obligations may be sold, exchanged, waived, surrendered or released. None of
the Administrative Agent, the Issuing Lender or any Lender shall have any
obligation to protect, secure, perfect or insure this or any other Lien at any
time held by it as security for the Obligations or any property subject thereto.
The Company waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent, the Issuing Lender or any Lender upon this Security
Agreement; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred in reliance upon this Security
Agreement; and all dealings between the Company and the Administrative Agent,
the Issuing Lender or any Lender, shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Security Agreement. The
Company waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Company with respect to the Obligations.
4.2 Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
4.3 Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8
4.4 Section Headings. The section headings used in this Security
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
4.5 No Waiver; Cumulative Remedies. Neither the Administrative
Agent, the Issuing Lender nor any Lender shall by any act (except by a written
instrument pursuant to Subsection 4.6 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, the Issuing Lender or any
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
the Issuing Lender or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent, the Issuing Lender or such Lender would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
4.6 Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Security Agreement represents the entire agreement of the
Company with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein or in the other Credit Documents.
None of the terms or provisions of this Security Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Company and the Administrative Agent, provided that any
provision of this Security Agreement may be waived by the Administrative Agent
in a written letter or agreement executed by the Administrative Agent or by
telex or facsimile transmission from the Administrative Agent. This Security
Agreement shall be binding upon the successors and assigns of the Company and
shall inure to the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
4.7 Notices. All notices, requests and demands to or upon the
Company or the Administrative Agent or any Lender to be effective shall be in
writing or by telecopy or telex and unless otherwise expressly provided herein,
shall be deemed to have been duly given or made when delivered by hand, or, in
the case of mail, three days after deposit in the postal system, first class
postage prepaid, or, in the case of telecopy notice, when sent, or, in the case
of telex notice, when sent, answerback received, addressed to a party at the
address provided for such party in the Credit Agreement.
4.8 Counterparts. This Security Agreement may be executed by one or
more of the parties hereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
9
4.9 Authority of Administrative Agent. The Company acknowledges that
the rights and responsibilities of the Administrative Agent under this Security
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Security Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Company, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and the Company shall not
be under any obligation, or entitlement, to make any inquiry respecting such
authority.
4.10 Releases. The Administrative Agent and the Lenders agree to
cooperate with the Company and its Subsidiaries with respect to any sale
permitted by subsection 8.5 of the Credit Agreement and promptly take such
action and execute and deliver such instruments and documents necessary to
release the Liens and security interests created hereby relating to any of the
assets or property affected by any sale permitted by subsection 8.5 of the
Credit Agreement including, without limitation, any necessary Uniform Commercial
Code amendment, termination or partial termination statement.
4.11 Termination. This Security Agreement (other than with respect
to any cash collateral securing any outstanding Letter of Credit) shall
terminate when all the Obligations have been paid in full, the Commitments are
terminated and either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent. Upon such termination, the
Administrative Agent shall reassign and redeliver (or cause to be reassigned and
redelivered) to the Company, or to such person or persons as the Company shall
designate, or to whomever may be lawfully entitled to receive such surplus,
against receipt, such of the Collateral (if any) (other than with respect to any
cash collateral securing any outstanding Letter of Credit) as shall not have
been sold or otherwise applied by the Administrative Agent pursuant to the terms
hereof and shall still be held by it hereunder, together with appropriate
instruments or reassignment and release. Any such reassignment and release shall
be without recourse upon or warranty by the Administrative Agent (other than a
warranty that the Administrative Agent has not assigned its rights and interests
hereunder to any Person) and at the expense of the Company.
10
IN WITNESS WHEREOF, the Company and the Administrative Agent have
caused this Security Agreement to be duly executed and delivered as of the date
first above written.
TWCC ACQUISITION CORP.
By: /s/
-------------------------------
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: /s/
-------------------------------
Title:
Schedule 1 to the Copyright Security Agreement
IV. Copyrights (Restrictions and Applications)
Registration No. Registration Date Title
---------------- ----------------- -----
VAu 317-368 11/16/94 Circus Bear
VAu 317-367 11/16/94 Theo Bear
VAu 317-365 11/16/94 Toy Bear
VAu 317-366 11/16/94 Letter Bunny
[Georgia]
DEED TO SECURE DEBT
THIS DEED TO SECURE DEBT, dated as of December 23, 1996 is made by The
XXXXXXX XXXXXX COMPANY, a Massachusetts corporation, whose address is 0000
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 00000, Attn: Xxxxx X. Xxxxx
("Grantor"), to THE CHASE MANHATTAN BANK, a New York banking corporation, whose
address is 0000 Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000, Attn: Xxxxxx
Xxxxxxxxx, as Administrative Agent (in such capacity, "Grantee") for itself and
the several lenders from time to time parties to that certain Credit Agreement
dated as of October 30, 1996 among TWCC ACQUISITION CORP., a Massachusetts
corporation ("AcquisitionCo"), the several banks and other financial
institutions from time to time parties thereto, including Grantee (the
"Lenders"), (as the same may be amended, restated, supplemented, modified or
replaced from time to time, the "Credit Agreement"). References to this "Deed"
shall mean this instrument and any and all renewals, modifications, amendments,
supplements, extensions, consolidations, substitutions, spreaders and
replacements of this instrument. Unless otherwise defined herein, capitalized
terms shall have the meanings ascribed to them in the Credit Agreement.
Background
WHEREAS, AcquisitionCo and Grantor have entered into an Agreement and
Plan of Merger dated as of September 18, 1996 (as amended, supplemented, or
otherwise modified from time to time, the "Merger Agreement"), pursuant to which
AcquisitionCo intends to be merged with and into Grantor (the "Merger"), Grantor
being the surviving corporation of the Merger; and
WHEREAS, prior to the Merger, AcquisitionCo, and thereafter, Grantor
(collectively, the "Company"), have requested the Lenders to make loans and
other extensions of credit available to the Company for the purposes set forth
in the Credit Agreement;
WHEREAS Mortgagor is the fee owner of the parcels of real property
together with the improvements located thereon (the "Improvements") described on
Schedule A attached hereto (the "Real Estate"):
WHEREAS, pursuant to the terms of the Credit Agreement, Grantor is
obligated to deliver this Deed to Secure Debt to Grantee:
Granting Clauses
THIS CONVEYANCE is intended to operate and is to be construed as a
deed passing title to the Subject Property (as defined below) to Grantee and is
made under those provisions of the existing laws of the State of Georgia
relating to deeds to secure debt, and not as a mortgage. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Grantor agrees that this Deed is given to secure the following:
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(a) (i) payment of all obligations and liabilities of Grantor which
may arise under, out of, or in connection with, the Credit Agreement, the
Notes, the Loans and the Letters of Credit in the aggregate principal
amount of $100,000,000 ("Notes", "Loans" and "Letters of Agreements" being
defined in the Credit Agreement), and (ii) all interest and fees payable
thereon (the items set forth in clauses (i) and (ii) being hereafter
collectively referred to as the "Indebtedness"); and
(b) the performance by Grantor of all covenants, agreements,
obligations and liabilities of Grantor (the "Obligations") under or
pursuant to the provisions of the Credit Agreement, and the Notes, the
Loans and the Letters of Credit defined therein, this Deed to Secure Debt,
and any other document securing payment of the Indebtedness to which
Grantor is a party (the Credit Agreement, and the Notes, the Loans and the
Letters of Credit, this Deed to Secure Debt, and any other document
securing payment of the Indebtedness to which Grantor is a party being,
collectively, the "Security Documents"), any other documents relating to
the Loans and any amendments, supplements, extensions, renewals,
restatements, replacements or modifications of any of the foregoing (the
Security Documents and all other documents and instruments from time to
time relating to the Loans or evidencing, securing or guaranteeing the
payment of the Indebtedness or the performance of the Obligations, as any
of the same may be amended, supplemented, extended, renewed, restated,
replaced or modified from time to time, are collectively referred to as the
"Loan Documents");
GRANTOR HEREBY:
has bargained, sold, conveyed, granted, assigned, granted a security interest
in, warranted, pledged, given, aliened, remised, released, confirmed,
transferred and set over and by these presents does hereby bargain, sell,
convey, grant, assign, grant a security interest in, warrant, pledge, give,
alien, remise, release, confirm, transfer and set over unto Grantee, its
successors and assigns forever, in fee simple with power of sale, for the
benefit of Grantee, its successors and assigns:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever of
Grantor, in possession or expectancy, in and to the Real Estate or any part
thereof;
(C) all right, title and interest of Grantor in, to and under all
present and future easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and riparian
rights, development rights, air rights, mineral rights and all estates,
rights, titles, interests, privileges, licenses, tenements, hereditaments
and appurtenances belonging, relating or appertaining to the Real Estate,
and any reversions, remainders, rents, issues, profits and revenue thereof
and all land lying in the bed of any street, road or avenue, in front of or
adjoining the Real Estate to the center line thereof;
(D) all of the fixtures, chattels, business machines, machinery,
apparatus, equipment, furnishings, fittings and articles of personal
property of every kind and nature
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whatsoever, and all appurtenances and additions thereto and substitutions
or replacements thereof (together with, in each case, attachments,
components, parts and accessories) currently owned or subsequently acquired
by Grantor and now or subsequently attached to, or contained in or used or
usable in any way in connection with any operation or letting of the Real
Estate, including but without limiting the generality of the foregoing, all
screens, awnings, shades, blinds, curtains, draperies, artwork, carpets,
rugs, storm doors and windows, furniture and furnishings, heating,
electrical, and mechanical equipment, lighting, switchboards, plumbing,
ventilating, air conditioning and air-cooling apparatus, refrigerating, and
incinerating equipment, escalators, elevators, loading and unloading
equipment and systems, stoves, ranges, laundry equipment, cleaning systems
(including window cleaning apparatus), telephones, communication systems
(including satellite dishes and antennae), televisions, computers,
sprinkler systems and other fire prevention and extinguishing apparatus and
materials, security systems, motors, engines, machinery, pipes, pumps,
tanks, conduits, appliances, fittings and fixtures of every kind and
description (all of the foregoing in this paragraph (D) being referred to
as the "Equipment");
(E) all right, title and interest of Grantor in and to all substitutes
and replacements of, and all additions and improvements to, the Real Estate
and the Equipment, subsequently acquired by or released to Grantor or
constructed, assembled or placed by Grantor on the Real Estate, immediately
upon such acquisition, release, construction, assembling or placement,
including, without limitation, any and all building materials whether
stored at the Real Estate or offsite, and, in each such case, without any
further mortgage, conveyance, assignment or other act by Grantor;
(F) all right, title and interest of Grantor in, to and under all
leases, subleases, underlettings, concession agreements, management
agreements, licenses and other agreements relating to the use or occupancy
of the Real Estate or the Equipment or any part thereof, now existing or
subsequently entered into by Grantor and whether written or oral and all
guarantees of any of the foregoing (collectively, as any of the foregoing
may be amended, restated, extended, renewed or modified from time to time,
the "Leases"), and all rights of Grantor in respect of cash and securities
deposited thereunder and the right to receive and collect the revenues,
income, rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising from
the use and enjoyment of the Subject Property (as defined below)
(collectively, the "Rents");
(G) all trade names, trade marks, logos, copyrights, good will and
books and records relating to or used in connection with the operation of
the Real Estate or the Equipment or any part thereof; all general
intangibles related to the operation of the Improvements now existing or
hereafter arising;
(H) all unearned premiums under insurance policies now or subsequently
obtained by Grantor relating to the Real Estate or Equipment and Grantor's
interest in and to all proceeds of any such insurance policies (including
title insurance policies) including the right to collect and receive such
proceeds, subject to the provisions relating to insurance generally set
forth below; and all awards and other compensation, including the interest
payable thereon
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and the right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or Equipment for the taking by eminent
domain, condemnation or otherwise, of all or any part of the Real Estate or
any easement or other right therein;
(I) all right, title and interest of Grantor in and to (i) all
contracts from time to time executed by Grantor or any manager or agent on
its behalf relating to the ownership, construction, maintenance, repair,
operation, occupancy, sale or financing of the Real Estate or Equipment or
any part thereof and all agreements relating to the purchase or lease of
any portion of the Real Estate or any property which is adjacent or
peripheral to the Real Estate, together with the right to exercise such
options and all leases of Equipment (collectively, the "Contracts"), (ii)
all consents, licenses, building permits, certificates of occupancy and
other governmental approvals relating to construction, completion,
occupancy, use or operation of the Real Estate or any part thereof
(collectively, the "Permits") and (iii) all drawings, plans, specifications
and similar or related items relating to the Real Estate (collectively, the
"Plans");
(J) any and all monies now or subsequently on deposit for the payment
of real estate taxes or special assessments against the Real Estate or for
the payment of premiums on insurance policies covering the foregoing
property or otherwise on deposit with or held by Grantee as provided in
this Deed; all capital, operating, reserve or similar accounts held by or
on behalf of Grantor and related to the operation of the Subject Property,
whether now existing or hereafter arising and all monies held in any of the
foregoing accounts and any certificates or instruments related to or
evidencing such accounts;
(K) all accounts and revenues arising from the operation of the
Improvements; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Grantor and described in the foregoing clauses
(A) through (E) are collectively referred to as the "Premises", and those
described in the foregoing clauses (A) through (L) are collectively referred to
as the "Subject Property").
TO HAVE AND TO HOLD the Subject Property and the estate, members,
rights, privileges and appurtenances hereby granted or intended to be granted
unto Grantee, its successors and assigns in fee simple, forever, for the uses
and purposes set forth herein, and to the use, benefit and behoof of Grantee,
its successors and assigns, until the Indebtedness is fully paid and the
Obligations fully performed.
Should the indebtedness secured by this Deed be paid according to the
tenor and effect thereof when the same shall become due and payable, and should
Grantor perform all covenants herein contained in a timely manner, then this
Deed shall be cancelled and surrendered.
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Terms and Conditions
Grantor further represents, warrants, covenants and agrees with
Grantee as follows:
1. Warranty of Title. Grantor warrants that Grantor has good title to
the Real Estate in fee simple and good title to the rest of the Subject
Property, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Grantee to insure the lien of
this Deed (the "Permitted Exceptions") and Grantor shall warrant, defend and
preserve such title and the grant and lien of this Deed with respect thereto
against all claims of all persons and entities. Grantor further warrants that it
is lawfully seized and possessed of the Subject Property and has the right to
grant this Deed.
2. Payment of Indebtedness. Grantor shall pay the Indebtedness at the
times and places and in the manner specified in the Notes and shall perform all
the Obligations.
3. Requirements. Grantor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the Subject
Property and all covenants, restrictions and conditions now or later of record
which may be applicable to any of the Subject Property, or to the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of any of the Subject Property. All present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements of every Governmental Authority applicable to Grantor or to any of
the Subject Property and all covenants, restrictions, and conditions which now
or later may be applicable to any of the Subject Property are collectively
referred to as the "Legal Requirements".
4. Payment of Taxes and Other Impositions. (a) Prior to delinquency,
Grantor shall pay and discharge all taxes of every kind and nature (including,
without limitation, all real and personal property, income, franchise,
withholding, transfer, gains, profits, gross receipts, and intangible recording
taxes), all charges for any easement or agreement maintained for the benefit of
any of the Subject Property, all general and special assessments, levies,
permits, inspection and license fees, all water and sewer rents and charges and
all other public charges even if unforeseen or extraordinary, imposed upon or
assessed against or which may become a lien on any of the Subject Property, or
arising in respect of the occupancy, use or possession thereof, together with
any penalties or interest on any of the foregoing (all of the foregoing are
collectively referred to as the "Impositions"). Upon request by Grantee, Grantor
shall deliver to Grantee (i) original or copies of receipted bills and cancelled
checks evidencing payment of such Imposition if it is a real estate tax or other
public charge and (ii) evidence acceptable to Grantee showing the payment of any
other such Imposition. If by law any Imposition, at Grantor's option, may be
paid in installments (whether or not interest shall accrue on the unpaid balance
of such Imposition), Grantor may elect to pay such Imposition in such
installments and shall be responsible for the payment of such installments with
interest, if any.
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(b) Nothing herein shall affect any right or remedy of Grantee under
this Deed or otherwise, without notice or demand to Grantor, to pay any
Imposition after the date such Imposition shall have become delinquent, and to
add to the Indebtedness the amount so paid, together with interest from the time
of payment at the Default Rate. Any sums paid by Grantee in discharge of any
Impositions shall be (i) a lien on the Premises secured hereby prior to any
right or title to, interest in, or claim upon the Premises subordinate to the
lien of this Deed, and (ii) payable on demand by Grantor to Grantee together
with interest at the Default Rate as set forth above.
(c) Grantor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Deed or on any interest
payable thereon for any taxes assessed against the Subject Property or any part
thereof, and shall not claim any deduction from the taxable value of the Subject
Property by reason of this Deed.
(d) Grantor shall have the right before any delinquency occurs to
contest or object in good faith to the amount or validity of any Imposition by
appropriate legal proceedings, but such right shall not be deemed or construed
in any way as relieving, modifying, or extending Grantor's covenant to pay any
such Imposition at the time and in the manner provided in this Section unless
(i) Grantor has given prior written notice to Grantee of Grantor's intent so to
contest or object to an Imposition, (ii) Grantor shall demonstrate to Grantee's
reasonable satisfaction that the legal proceedings shall operate conclusively to
prevent the sale of the Subject Property, or any part thereof, to satisfy such
Imposition prior to final determination of such proceedings and (iii) Grantor
shall furnish a good and sufficient bond or surety as reasonably requested by
and reasonably satisfactory to Grantee in the amount of the Impositions which
are being contested plus any interest and penalty which may be imposed thereon
and which could become a lien against the Real Estate or any part of the Subject
Property.
(e) Upon written notice to Grantor, Grantee after the occurrence of
and during the continuation of an Event of Default (as defined below) shall be
entitled to require Grantor to pay monthly in advance to Grantee the equivalent
of 1/12th of the estimated annual Impositions. Grantee may commingle such funds
with its own funds and Grantor shall not be entitled to interest thereon.
5. Insurance. (a) In addition to any insurance required by the Credit
Agreement, Grantor shall maintain or cause to be maintained on all of the
Premises:
(i) property insurance against loss or damage by fire, lightning,
windstorm, tornado, water damage, flood, earthquake and by such other
further risks and hazards as now are or subsequently may be covered by an
"all risk" policy or a fire policy covering "special" causes of loss. The
policy shall include building ordinance law endorsements and the policy
limits shall be automatically reinstated after each loss;
(ii) comprehensive general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language of such endorsement), covering all claims for personal injury,
bodily injury or death, or property damage occurring on, in or about the
Premises in amounts not less than the usual amount insured for in the same
general area
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by companies engaged in the same or a similar business plus such excess
limits as Grantee shall reasonably request from time to time;
(iii) when and to the extent required by Grantee, insurance against
loss or damage by any other risk commonly insured against by persons
occupying or using like properties in the locality or localities in which
the Real Estate is situated;
(iv) insurance against rent loss, extra expense or business
interruption (and/or soft costs, in the case of new construction), if
applicable, in amounts satisfactory to Grantee, but not less than one
year's gross rent or gross income;
(v) during the course of any construction or repair of Improvements,
comprehensive general liability insurance under a policy including the
"broad form CGL endorsement" (or which incorporates the language of such
endorsement), (including coverage for elevators and escalators, if any).
The policy shall include coverage for independent contractors and completed
operations. The completed operations coverage shall stay in effect for two
years after construction of any Improvements has been completed. The policy
shall provide coverage on an occurrence basis against claims for personal
injury, including, without limitation, bodily injury, death or property
damage occurring on, in or about the Premises and the adjoining streets,
sidewalks and passageways, such insurance to afford immediate minimum
protection to a limit of not less than that required by Grantee with
respect to personal injury, bodily injury or death to any one or more
persons or damage to property;
(vi) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Grantor engaged on or with
respect to the Premises in such amounts as are established by law;
(vii) during the course of any construction, addition, alteration or
repair of the Improvements, builder's risk completed value form insurance
against "all risks of physical loss," including collapse, water damage,
flood and earthquake and transit coverage, during construction or repairs
of the Improvements, with deductible approved by Grantee, in nonreporting
form, covering the total value of work performed and equipment, supplies
and materials furnished (with an appropriate limit for soft costs in the
case of construction);
(viii) boiler and machinery property insurance covering pressure
vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment and escalator equipment, provided the
Improvements contain equipment of such nature, and insurance against rent,
extra expense, business interruption and soft costs, if applicable, arising
from any such breakdown, in such amounts as are usually insured for in the
same general area by companies engaged in the same or a similar business
plus such excess limits as Grantee shall reasonably request from time to
time;
(ix) if any portion of the Premises are located in an area identified
as a special flood hazard area by the Federal Emergency Management Agency
or other applicable agency, flood
8
insurance in an amount satisfactory to Grantee, but in no event less than
the maximum limit of coverage available under the National Flood Insurance
Act of 1968, as amended; and
(x) such other insurance in such amounts as Grantee may reasonably
request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or materially
amended without 30-days' prior written notice to Grantee, and (ii) with respect
to all property insurance, provide for a deductible not to exceed the amount
usually maintained by companies engaged in the same or a similar business,
contain a "Replacement Cost Endorsement" without any deduction made for
depreciation and with no co-insurance penalty (or attaching an agreed amount
endorsement satisfactory to Grantee), with loss payable solely to Grantee
(modified, if necessary, to provide that proceeds in the amount of replacement
cost may be retained by Grantee without the obligation to rebuild) as its
interest may appear, without contribution, under a "standard" or "New York"
mortgagee clause acceptable to Grantee and be written by financially sound and
reputable insurance companies. Liability insurance policies shall name Grantee
as an additional insured and contain a waiver of subrogation against Grantee;
all such policies shall indemnify and hold Grantee harmless from all liability
claims occurring on, in or about the Premises and the adjoining streets,
sidewalks and passageways. The amounts of each insurance policy and the form of
each such policy shall at all times be reasonably satisfactory to Grantee. Each
policy shall expressly provide that any proceeds which are payable to Grantee
shall be paid by check payable to the order of Grantee only and requiring the
endorsement of Grantee only. If any required insurance shall expire, be
withdrawn, become void by breach of any condition thereof by Grantor or by any
lessee of any part of the Subject Property or become void by reason of the
failure or impairment of the capital of any insurer, Grantor shall immediately
obtain new or additional insurance reasonably satisfactory to Grantee. Grantor
shall not take out any separate or additional insurance which is contributing in
the event of loss unless it is properly endorsed and otherwise satisfactory to
Grantee in all respects.
(b) Grantor shall deliver to Grantee an original of each insurance
policy required to be maintained, or a certificate of such insurance acceptable
to Grantee, together with a copy of the declaration page for each such policy.
Grantor shall (i) pay as they become due all premiums for such insurance, (ii)
not later than 15 days prior to the expiration of each policy to be furnished
pursuant to the provisions of this Section, deliver a renewed policy or
policies, or duplicate original or originals thereof, marked "premium paid," or
accompanied by such other evidence of payment satisfactory to Grantee with
standard non-contributory mortgage clauses in favor of and acceptable to
Grantee. Upon request of Grantee, Grantor shall cause its insurance underwriter
or broker to certify to Grantee in writing that all the requirements of this
Deed governing insurance have been satisfied.
(c) If Grantor is in default of its obligations to insure or deliver
any such prepaid policy or policies, then Grantee, at its option and without
notice, may effect such insurance from year to year, and pay the premium or
premiums therefor, and Grantor shall pay to Grantee on demand such premium or
premiums so paid by Grantee with interest from the time of payment at the
Default Rate and the same shall be deemed to be secured by this Deed and shall
be collectible in the same manner as the Indebtedness secured by this Deed.
9
(d) Grantor shall increase the amount of property insurance required
to equal 100% replacement cost pursuant to the provisions of this Section at the
time of each renewal of each policy (but not later than 12 months from the date
of this Deed and each successive 12 month period to occur thereafter) by using
the X.X. Xxxxx Building Index to determine whether there shall have been an
increase in the replacement value since the most recent adjustment and, if there
shall have been such an increase, the amount of insurance required shall be
adjusted accordingly.
(e) Grantor promptly shall comply with and conform to (i) all
provisions of each such insurance policy, and (ii) all requirements of the
insurers applicable to Grantor or to any of the Subject Property or to the use,
manner of use, occupancy, possession, operation, maintenance, alteration or
repair of any of the Subject Property. Grantor shall not use or permit the use
of the Subject Property in any manner which would permit the insurer to cancel
any insurance policy or void coverage required to be maintained by this Deed.
(f) If the Subject Property, or any part thereof, shall be destroyed
or damaged by fire or any other casualty, whether insured or uninsured, or in
the event any claim is made against Grantor for any personal injury, bodily
injury or property damage incurred on or about the Premises, Grantor shall give
prompt notice thereof to Grantee. If the Subject Property is damaged by fire or
other casualty and the cost to repair such damage is less than $500,000, then
provided that no Event of Default shall have occurred and be continuing, Grantor
shall have the right to adjust such loss, and the insurance proceeds relating to
such loss may be paid over to Grantor; provided that Grantor shall, promptly
after any such damage, repair all such damage regardless of whether any
insurance proceeds have been received or whether such proceeds, if received, are
sufficient to pay for the costs of repair. If the Subject Property is damaged by
fire or other casualty, and the cost to repair such damage exceeds the above
limit, or if an Event of Default shall have occurred and be continuing, then
Grantor authorizes and empowers Grantee, at Grantee's option and in Grantee's
sole discretion, as attorney-in-fact for Grantor, to make proof of loss, to
adjust and compromise any claim under any insurance policy, to appear in and
prosecute any action arising from any policy, to collect and receive insurance
proceeds and to deduct therefrom Grantee's expenses incurred in the collection
process. Each insurance company concerned is hereby authorized and directed to
make payment for such loss directly to Grantee. Grantee shall have the right to
require Grantor to repair or restore the Subject Property, and Grantor hereby
designates Grantee as its attorney-in-fact for the purpose of making any
election required or permitted under any insurance policy relating to repair or
restoration. If Grantee requires restoration of the Subject Property or if no
Event of Default has occurred and is continuing, insurance proceeds must first
be made available to restoration. If an Event of Default shall have occurred and
be continuing, the insurance proceeds or any part thereof received by Grantee
may be applied by Grantee toward reimbursement of all costs and expenses of
Grantee in collecting such proceeds, and the balance, at Grantee's option in its
sole and absolute discretion, to the principal (to the installments in inverse
order of maturity, if payable in installments) and interest due or to become due
under the Notes, to fulfill any other Obligation of Grantor, to the restoration
or repair of the property damaged, or released to Grantor. In the event Grantee
elects to release such proceeds to Grantor, Grantor shall be obligated to use
such proceeds to restore or repair the Subject Property. Application by Grantee
of any insurance proceeds toward the last maturing installments of principal and
interest due or to become due under the Notes shall not excuse Grantor from
making any regularly
10
scheduled payments due thereunder, nor shall such application extend or reduce
the amount of such payments.
(g) In the event of the exercise of any of Grantee's rights under this
Deed (including, without limitation, exercise of the power of sale granted
herein and foreclosure of this Deed as a mortgage) or other transfer of title to
the Subject Property in extinguishment of the Indebtedness, all right, title and
interest of Grantor in and to any insurance policies then in force shall pass to
the purchaser or grantee and Grantor hereby appoints Grantee its
attorney-in-fact, in Grantor's name, to assign and transfer all such policies
and proceeds to such purchaser or grantee.
(h) Upon written notice to Grantor, Grantee after the occurrence of
and during the continuation of an Event of Default shall be entitled to require
Grantor to pay monthly in advance to Grantee the equivalent of 1/12th of the
estimated annual premiums due on such insurance.
(i) Grantor may maintain insurance required under this Deed by means
of one or more blanket insurance policies maintained by Grantor; provided,
however, that (A) any such policy shall specify, or Grantor shall furnish to
Grantee a written statement from the insurer so specifying, the maximum amount
of the total insurance afforded by such blanket policy that is allocated to the
Premises and the other Subject Property and any sublimits in such blanket policy
applicable to the Premises and the other Subject Property, (B) each such blanket
policy shall include an endorsement providing that, in the event of a loss
resulting from an insured peril, insurance proceeds shall be allocated to the
Subject Property in an amount equal to the coverages required to be maintained
by Grantor as provided above and (C) the protection afforded under any such
blanket policy shall be no less than that which would have been afforded under a
separate policy or policies relating only to the Subject Property.
6. Restrictions on Liens and Encumbrances. Except as may be permitted
by the Credit Agreement, Grantor shall not further mortgage, nor otherwise
encumber the Subject Property nor create or suffer to exist any lien, charge or
encumbrance on the Subject Property, or any part thereof, whether superior or
subordinate to the lien of this Deed and whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as may be
permitted in the Credit Agreement, Grantor shall not sell, transfer, convey or
assign all or any portion of, or any interest in, the Subject Property.
8. Maintenance. Grantor shall maintain or cause to be maintained all
the Improvements in good condition and repair (normal wear and tear excepted)
and shall not commit or suffer any waste of the Improvements. Subject to the
provisions of Section 5, Grantor shall repair, restore, replace or rebuild
promptly any part of the Premises which may be damaged or destroyed by any
casualty whatsoever. The Improvements shall not be demolished or materially
altered, nor any material additions built, without the prior written consent of
Grantee, which shall not be unreasonably withheld or delayed.
9. Condemnation/Eminent Domain. Immediately upon obtaining knowledge
of the institution of any proceedings for the condemnation of the Subject
Property, or any portion thereof, Grantor will notify Grantee of the pendency of
such proceedings. Grantor authorizes Grantee, at Grantee's option and in
Grantee's sole discretion, as attorney-in-fact for Grantor, to commence,
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appear in and prosecute, in Grantee's or Grantor's name, any action or
proceeding relating to any condemnation of the Subject Property, or any portion
thereof, and to settle or compromise any claim in connection with such
condemnation. If Grantee elects not to participate in such condemnation
proceeding, then Grantor shall, at its expense, diligently prosecute any such
proceeding and shall consult with Grantee, its attorneys and experts and
cooperate with them in any defense of any such proceedings. All awards and
proceeds of condemnation shall be assigned to Grantee to be applied in the same
manner as insurance proceeds, as provided above, and Grantor agrees to execute
any such assignments of all such awards as Grantee may request.
10. Restoration. If funds are released to Grantor for restoration of
any of the Subject Property, then such restoration shall be performed only in
accordance with the following conditions:
(i) prior to the commencement of any restoration, the plans and
specifications for such restoration, and the budgeted costs, shall be
submitted to and approved by Grantee, which approval shall not be
unreasonably withheld or delayed;
(ii) prior to making any advance of restoration funds, Grantee shall
be reasonably satisfied that the remaining restoration funds are sufficient
to complete the restoration
and to pay all related expenses, including interest on the Indebtedness and
real estate taxes on the Premises, during restoration;
(iii) at the time of any disbursement of the restoration funds, (A) no
Event of Default shall then exist, (B) no mechanics' or materialmen's liens
shall have been filed and remain undischarged, except those discharged by
the disbursement of the requested restoration funds and (C) a satisfactory
bring-down or continuation of title insurance on the Premises shall be
delivered to Grantee;
(iv) disbursements shall be made from time to time in an amount not
exceeding the cost of the work completed since the last disbursement, upon
receipt of reasonably satisfactory evidence of the stage of completion and
of performance of the work in a good and workmanlike manner and in
accordance with the contracts, plans and specifications acceptable to
Grantee;
(v) with respect to each advance of restoration funds, Grantee may
retain 10% of the amount of such advance as a holdback until the
restoration is fully completed;
(vi) Grantee may impose such other conditions as are customarily
imposed by construction lenders; and
(vii) any restoration funds remaining shall be retained by Grantee and
shall be applied by Grantee to its Indebtedness.
11. Leases. (a) Except as may be permitted in the Credit Agreement,
Grantor shall not lease any portion, or any interest in, the Subject Property.
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(b) In the event of the enforcement by Grantee of any remedy under
this Deed, the lessee under any Lease shall, if requested by Grantee or any
other person succeeding to the interest of Grantee as a result of such
enforcement, attorn to Grantee or to such person and shall recognize Grantee or
such successor in interest as lessor under the Lease without change in the
provisions thereof; provided however, that Grantee or such successor in interest
shall not be: (i) bound by any payment of an installment of rent or additional
rent which may have been made more than 30 days before the due date of such
installment; (ii) bound by any material amendment or modification to the Lease
made without the consent of Grantee or such successor in interest; (iii) liable
for any previous act or omission of Grantor (or its predecessors in interest);
(iv) responsible for any monies owing by Grantor to the credit of such lessee or
subject to any credits, offsets, claims, counterclaims, demands or defenses
which the lessee may have against Grantor (or its predecessors in interest); (v)
bound by any covenant to undertake or complete any construction of the Premises
or any portion thereof unless set forth in the Lease or any amendment approved
by Grantee; or (vi) obligated to make any payment to such lessee other than any
security deposit actually delivered to Grantee or such successor in interest.
Each lessee or other occupant, upon request by Grantee or such successor in
interest, shall execute and deliver an instrument or instruments confirming such
attornment. In addition, Grantor agrees that each Lease entered into after the
date of this Deed shall include language to the effect of subsections (d)-(g) of
this Section; provided that the provisions of such subsections shall be
self-operative and any failure of any Lease to include such language shall not
impair the binding effect of such provisions on any lessee under such Lease.
12. Further Assurances/Estoppel Certificates. To further assure
Grantee's rights under this Deed, Grantor agrees upon written demand of Grantee
to do any act or execute any additional documents (including, but not limited
to, security agreements on any personalty included or to be included in the
Subject Property and a separate assignment of each Lease in recordable form) as
may be reasonably required by Grantee to confirm the lien of this Deed and all
other rights or benefits conferred on Grantee.
13. Grantee's Right to Perform. If Grantor fails to perform any of the
covenants or agreements of Grantor, Grantee, without waiving or releasing
Grantor from any obligation or default under this Deed, may, at any time (but
shall be under no obligation to) pay or perform the same, and the amount or cost
thereof, with interest at the Default Rate, shall be due from Grantor to Grantee
promptly after written demand and the same shall be secured by this Deed and
shall be a lien on the Subject Property prior to any right, title to, interest
in or claim upon the Subject Property attaching subsequent to the lien of this
Deed. No payment or advance of money by Grantee under this Section shall be
deemed or construed to cure Grantor's default or waive any right or remedy of
Grantee.
14. Hazardous Materials, Etc.. (a) Grantor represents that other than
as specifically identified in the Environmental Reports (as defined in the
Credit Agreement) Grantor has never caused or permitted any Hazardous Materials
(as defined in the Credit Agreement) to be placed, held, located or disposed of
on, under or at the Premises, or any part thereof, in violation of applicable
law and the Premises have never been used by Grantor as a dump site or storage
(whether permanent or temporary) site for any Hazardous Materials in violation
of applicable law.
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(b) Grantor represents that other than as specifically identified in
the Environmental Reports (as defined in the Credit Agreement) (i) to Grantor's
knowledge, the Premises are free of all Hazardous Materials (other than
Hazardous Materials handled or stored in accordance with applicable law) and
(ii) the Premises have not been adversely affected by any Hazardous Material and
are not in violation of any applicable Environmental Law (as defined in the
Credit Agreement.
(c) Grantor shall comply substantially with any and all applicable
Environmental Laws, shall pay promptly when due the costs of removal of any
Hazardous Material, and shall keep the Premises free of any lien imposed
pursuant to any Environmental Law. In the event Grantor fails to do so, after
notice to Grantor and the expiration of the earlier of (i) applicable cure
periods hereunder, or (ii) the cure period permitted under the applicable Legal
Requirement, Grantee may declare such failure an Event of Default or cause the
Premises to be freed from the Hazardous Material and the cost of the removal
with interest at the Default Rate shall be due from Grantor to Grantee and the
same shall be added to the Indebtedness and be secured by this Deed. Grantor
further agrees not to release or dispose of any Hazardous Material at the
Premises in violation of applicable law or in a manner that could reasonably be
expected to adversely affect the value or marketability of the Premises. In
addition, Grantor agrees not to allow the manufacture, storage, transmission,
presence or disposal of any Hazardous Material over or upon the Premises in
violation of applicable law or in a manner that could reasonably be expected to
adversely affect the value or marketability of the Premises. Upon a default by
Grantor under this Section, Grantor shall give Grantee and its agents and
employees access to the Premises to remove Hazardous Material. Grantor agrees to
defend, indemnify and hold Grantee free and harmless from and against all loss,
costs, damage and expense (including attorneys' fees and costs and consequential
damages) Grantee may sustain by reason of (i) the imposition or recording of a
lien by any Governmental Authority pursuant to any Environmental Law; (ii)
claims of any private parties regarding violation of or liabilities under any
Environmental Law; (iii) costs and expenses (including, without limitation,
attorneys' fees and fees incidental to the securing of repayment of such costs
and expenses) incurred by Grantor or Grantee in connection with the removal of
any such lien or in connection with Grantor's or Grantee's compliance with or
liability under any Environmental Law; and (iv) the assertion against Grantee by
any party of any claim in connection with any Environmental Law.
(d) The foregoing indemnification shall be a recourse obligation of
Grantor and shall survive repayment of the Notes, notwithstanding any
limitations on recourse which may be contained herein or in any Loan Documents
or the delivery of any satisfaction, release or release deed, discharge or deed
of reconveyance, or the assignment of this Deed by Grantee.
15. Asbestos. Grantor shall not install or permit to be installed in
the Premises asbestos or any substance containing asbestos and with respect to
any such material currently present in the Premises shall promptly either (a)
remove any material which such Environmental Laws deem harmful, hazardous or
injurious and require to be removed or (b) otherwise comply with such
Environmental Laws, at Grantor's expense. If Grantor shall fail to so remove or
otherwise comply within 30 days after written notice from Grantee, Grantee may
declare an Event of Default and/or do whatever is necessary to eliminate such
substances from the Premises or otherwise comply with the applicable Legal
Requirement, and the costs thereof, with interest at the Default Rate, shall be
due from Grantor to Grantee within 10 days after written demand and the same
shall be added to the
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Indebtedness and be secured by this Deed. Grantor shall give Grantee and its
agents and employees access to the Premises to remove such asbestos or
substances. Grantor shall defend, indemnify, and save Grantee harmless from all
loss, costs, damages and expense (including reasonable attorneys' fees and costs
and consequential damages) asserted or proven against Grantee by any party, as a
result of the presence of such substances or any removal or compliance with such
Environmental Laws. The foregoing indemnification shall be a recourse obligation
of Grantor and shall survive repayment of the Notes, notwithstanding any
limitation on recourse which may be contained herein or in any of the Loan
Documents or the delivery of any satisfaction, release or release deed,
discharge or deed of reconveyance, or the assignment of this Deed by Grantee.
16. Events of Default. The occurrence of an Event of Default under the
Credit Agreement shall constitute an Event of Default hereunder.
17. Remedies.
(a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Grantee may have pursuant to the Loan Documents, or as
provided by law, and without limitation, (a) if such event is an Event of
Default specified in clause (i) or (ii) of Section 9(f) of the Credit Agreement
with respect to the Grantor (an "Automatic Acceleration Default"), automatically
the Indebtedness and all other amounts owing under the Notes, this Deed and the
other Security Documents immediately shall become due and payable, and (b) if
such event is any other Event of Default, by notice to Grantor, Grantee may
declare the Indebtedness (together with accrued interest thereon) and all other
amounts payable under the Notes, this Deed and the other Security Documents to
be immediately due and payable. Except as expressly provided above in this
Section or in the Credit Agreement, presentment, demand, protest and all other
notices of any kind are hereby expressly waived. In addition, upon the
occurrence of any Event of Default, Grantee may immediately take such action,
without further notice or demand, as it deems advisable to protect and enforce
its rights against Grantor and in and to the Subject Property, including, but
not limited to, the following actions, each of which may be pursued concurrently
or otherwise, at such time and in such manner as Grantee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Grantee:
(i) Grantee may, to the extent permitted by applicable law, (A)
institute and maintain an action to foreclose this Deed as a lien against
all or any part of the Subject Property, (B) institute and maintain an
action on the Notes, (C) sell all or part of the Subject Property (Grantor
expressly granting to Grantee the power of sale as more particularly
described in subsection (iii) below), or (D) take such other action at law
or in equity for the enforcement of this Deed or any of the Loan Documents
as the law may allow. Grantee may proceed in any such action to final
judgment and execution thereon for all sums due hereunder, together with
interest thereon at the Default Rate and all costs of suit, including,
without limitation, reasonable attorneys' fees and disbursements.
(ii) Grantee may personally, or by its agents, attorneys and employees
and without regard to the adequacy or inadequacy of the Subject Property or
any other collateral as security for the Indebtedness and Obligations enter
into and upon the Subject Property and each and every
15
part thereof and exclude Grantor and its agents and employees therefrom
without liability for trespass, damage or otherwise (Grantor hereby
agreeing to surrender possession of the Subject Property to Grantee upon
demand at any such time) and use, operate, manage, maintain and control the
Subject Property and every part thereof. Following such entry and taking of
possession, Grantee shall be entitled, without limitation, (x) to lease all
or any part or parts of the Subject Property for such periods of time and
upon such conditions as Grantee may, in its discretion, deem proper, (y) to
enforce, cancel or modify any Lease and (z) generally to execute, do and
perform any other act, deed, matter or thing concerning the Subject
Property as Grantee shall deem appropriate as fully as Grantor might do.
(iii) Grantor hereby grants to Grantee and assigns, the following
irrevocable power of attorney and agency (which are coupled with an
interest): to sell all or part of the Subject Property at auction, at the
usual place for conducting sales at the Court House in the County where the
land or any part thereof lies, in the State of Georgia, to the highest
bidder for cash, after advertising the time, terms and place of such sale
once a week for four weeks immediately preceding such sale (but without
regard to the number of days) in a newspaper published in the County where
the land lies, or in the paper in which the Sheriff's advertisements for
such County are published, all other notice being hereby waived by Grantor,
and Grantee or any person on behalf of Grantee, or assigns, may bid and
purchase at such sale and thereupon execute and deliver to the purchaser or
purchasers at such sale a sufficient conveyance of said Subject Property
with full warranty of title (or without warranties if Grantee shall so
elect), in fee simple, which conveyance shall contain recitals as to the
happenings of the default upon which the execution of the power of sale
herein granted depends, and Grantor hereby constitutes and appoints Grantee
and assigns, the agent and attorney in fact of Grantor to make such
recitals, and hereby covenants and agrees that the recitals so to be made
by Grantee, or assigns, shall be binding and conclusive upon Grantor, and
assigns of Grantor, and that the conveyance to be made by Grantee or
assigns, shall be effectual to perpetually bar all suits in law and in
equity and the equity of redemption of Grantor, or the successors in
interest of Grantor, in and to the Subject Property, and Grantee or
assigns, shall collect the proceeds of such sale, and after reserving
therefrom the entire amount of principal and accrued interest due, together
with the amount of any taxes, liens, charges, including utility charges, if
any, assessments and premiums of insurance or other payments theretofore
paid by Grantee, with interest thereon from date of payment, together with
all costs and expenses of sale and fifteen percentum of the aggregate
amount due for attorney's fees, shall pay any over-plus to Grantor, or to
the heirs or assigns of Grantor as provided by law. The power and agency
hereby granted are coupled with an interest and are irrevocable and are
granted as cumulative to all other remedies for collection and enforcement
of the Indebtedness and the Obligations provided for herein or otherwise
provided by law.
(iv) Grantee may adjourn from time to time any sale by Grantee to be
made under or by virtue of this Deed by announcement at the time and place
appointed for such sale or for such adjourned sale or sales and upon notice
to Grantor; and, except as otherwise provided by any applicable provision
of law, Grantee, without further notice or publication, may make such sale
at the time and place to which the same shall be so adjourned.
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(v) Upon the completion of any sale or sales made by Grantee under or
by virtue of this Section, Grantee, or an officer of any court empowered to
do so, shall execute and deliver to the accepted purchaser or purchasers a
good and sufficient instrument, or good and sufficient instruments,
conveying, assigning and transferring all estate, right, title and interest
in and to the property and rights sold. Grantee is hereby irrevocably
appointed the true and lawful attorney of Grantor, in its name and stead,
to make all necessary conveyances, assignments, transfers and deliveries of
the Subject Property and rights so sold and for that purpose Grantee may
execute all necessary instruments of conveyance, assignment and transfer,
and may substitute one or more persons with like power, Grantor hereby
ratifying and confirming all that its said attorney or such substitute or
substitutes shall lawfully do by virtue hereof. Any such sale or sales made
under or by virtue of this Section, whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law
or in equity, of Grantor in and to the properties and rights so sold, and
shall be a perpetual bar both at law and in equity against Grantor and
against any and all persons claiming or who may claim the same, or any part
thereof from, through or under Grantor.
(vi) No recovery of any judgment by Grantee and no levy of an
execution under any judgment upon the Subject Property or upon any other
property of Grantor shall affect in any manner or to any extent, the lien
and title of this Deed upon the Subject Property or any part thereof, or
any liens, title, rights, powers or remedies of Grantee hereunder, but such
liens, titles, rights, powers and remedies of Grantee shall continue
unimpaired as before.
(b) The holder of this Deed, in any action to exercise the rights
granted hereunder (including, without limitation, exercise of the power of sale
contained herein or foreclosure of this Deed as a mortgage), shall be entitled
to the appointment of a receiver. In case of a any sale pursuant to this Deed,
the Real Estate may be sold, at Grantee's election, in one parcel or in more
than one parcel and Grantee is specifically empowered, (without being required
to do so, and in its sole and absolute discretion) to cause successive sales of
portions of the Subject Property to be held.
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Deed, and notwithstanding to the contrary
any exculpatory or non-recourse language which may be contained herein, Grantee
shall be entitled to enjoin such breach and obtain specific performance of any
covenant, agreement, term or condition and Grantee shall have the right to
invoke any equitable right or remedy as though other remedies were not provided
for in this Deed.
18. Right of Grantee to Credit Sale. Upon the occurrence of any sale
made under this Deed, whether made under the power of sale or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, Grantee
may bid for and acquire the Subject Property or any part thereof. In lieu of
paying cash therefor, Grantee may make settlement for the purchase price by
crediting upon the Indebtedness or other sums secured by this Deed the net sales
price after deducting therefrom the expenses of sale and the cost of the action
and any other sums which Grantee is authorized to deduct under this Deed. In
such event, this Deed, the Notes and documents evidencing expenditures
17
secured hereby may be presented to the person or persons conducting the sale in
order that the amount so used or applied may be credited upon the Indebtedness
as having been paid.
19. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Grantee as a matter of right and without notice to
Grantor, unless otherwise required by applicable law, and without regard to the
adequacy or inadequacy of the Subject Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Grantor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Subject Property, and
Grantor hereby irrevocably consents to such appointment and waives notice of any
application therefor (except as may be required by law). Any such receiver or
receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Grantee in case of entry as
provided in this Deed, including, without limitation and to the extent permitted
by law, the right to enter into leases of all or any part of the Subject
Property, and shall continue as such and exercise all such powers until the date
of confirmation of sale of the Subject Property unless such receivership is
sooner terminated.
20. Extension, Release, etc. (a) Without affecting the lien or charge
of this Deed upon any portion of the Subject Property not then or theretofore
released as security for the full amount of the Indebtedness, Grantee may, from
time to time and without notice, agree to (i) release any person liable for the
Indebtedness, (ii) extend the maturity or alter any of the terms of the
Indebtedness or any guaranty thereof, (iii) grant other indulgences, (iv)
release or reconvey, or cause to be released or reconveyed at any time at
Grantee's option any parcel, portion or all of the Subject Property, (v) take or
release any other or additional security for any obligation herein mentioned, or
(vi) make compositions or other arrangements with debtors in relation thereto.
If at any time this Deed shall secure less than all of the principal amount of
the Indebtedness, it is expressly agreed that any repayments of the principal
amount of the Indebtedness shall not reduce the amount of the lien of this Deed
until the lien amount shall equal the principal amount of the Indebtedness
outstanding.
(b) No recovery of any judgment by Grantee and no levy of an execution
under any judgment upon the Subject Property or upon any other property of
Grantor shall affect the estate granted by this Deed or any liens, rights,
powers or remedies of Grantee hereunder, and such liens, rights, powers and
remedies shall continue unimpaired.
(c) If Grantee shall have the right to exercise the rights granted
herein (including, without limitation, exercise of the power of sale or
foreclosure of this Deed as a mortgage), Grantor authorizes Grantee at its
option to sell the Subject Property or to foreclose the lien of this Deed
subject to the rights of any tenants of the Subject Property. The failure to
make any such tenants parties defendant to any such sale or proceeding and to
extinguish their rights will not be asserted by Grantor as a defense to any
proceeding instituted by Grantee to collect the Indebtedness or to foreclose the
lien of this Deed.
(d) Unless expressly provided otherwise, in the event that ownership
of this Deed and title to the Subject Property or any estate therein shall
become vested in the same person or
18
entity, this Deed shall not merge in such title but shall continue as a valid
lien on the Subject Property for the amount secured hereby.
21. Security Agreement under Uniform Commercial Code. (a) It is the
intention of the parties hereto that this Deed shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code (the "Code") of the
State of Georgia. If an Event of Default shall occur under this Deed, then in
addition to having any other right or remedy available at law or in equity,
Grantee shall have the option of either (i) proceeding under the Code and
exercising such rights and remedies as may be provided to a secured party by the
Code with respect to all or any portion of the Subject Property which is
personal property (including, without limitation, taking possession of and
selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting the
Subject Property in accordance with Grantee's rights, powers and remedies with
respect to the real property (in which event the default provisions of the Code
shall not apply). If Grantee shall elect to proceed under the Code, then five
days' notice of sale of the personal property shall be deemed reasonable notice
and the reasonable expenses of retaking, holding, preparing for sale, selling
and the like incurred by Grantee shall include, but not be limited to,
attorneys' fees and legal expenses. At Grantee's request, Grantor shall assemble
the personal property and make it available to Grantee at a place designated by
Grantee which is reasonably convenient to both parties.
(b) Grantor and Grantee agree, to the extent permitted by law, that:
(i) all of the goods described within the definition of the word "Equipment" are
or are to become fixtures on the Real Estate; (ii) this Deed upon recording or
registration in the real estate records of the proper office shall constitute a
financing statement filed as a "fixture filing" within the meaning of Sections
9-313 and 9-402 of the Code; (iii) Grantor is the record owner of the Real
Estate; and (iv) the addresses of Grantor and Grantee are as set forth on the
first page of this Deed.
(c) Grantor, upon request by Grantee from time to time, shall execute,
acknowledge and deliver to Grantee one or more separate security agreements, in
form satisfactory to Grantee, covering all or any part of the Subject Property
and will further execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any financing statement, affidavit, continuation
statement or certificate or other document as Grantee may reasonably request in
order to perfect, preserve, maintain, continue or extend the security interest
under and the priority of this Deed and such security instrument. Grantor
further agrees to pay to Grantee within 10 days after written demand all costs
and expenses incurred by Grantee in connection with the preparation, execution,
recording, filing and refiling of any such document and all reasonable costs and
expenses of any record searches for financing statements Grantee shall
reasonably require. Grantor shall from time to time, on request of Grantee,
deliver to Grantee an inventory in reasonable detail of any of the Subject
Property which constitutes personal property. If Grantor shall fail to furnish
any financing or continuation statement within 10 days after request by Grantee,
then pursuant to the provisions of the Code, Grantor hereby authorizes Grantee,
without the signature of Grantor, to execute and file any such financing and
continuation statements. The filing of any financing or continuation statements
in the records relating to personal property or chattels shall not be construed
as in any way impairing the right of Grantee to proceed against any personal
property encumbered by this Deed as real property, as set forth above.
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22. Assignment of Rents. Grantor hereby assigns to Grantee the Rents
as further security for the payment of the Indebtedness and performance of the
Obligations, and Grantor grants to Grantee the right to enter the Subject
Property for the purpose of collecting the same and to let the Subject Property
or any part thereof, and to apply the Rents on account of the Indebtedness. The
foregoing assignment and grant is present and absolute and shall continue in
effect until the Indebtedness is paid in full, but Grantee hereby waives the
right to enter the Subject Property for the purpose of collecting the Rents and
Grantor shall be entitled to collect, receive, use and retain the Rents until
the occurrence of an Event of Default under this Deed; such right of Grantor to
collect, receive, use and retain the Rents may be revoked by Grantee upon the
occurrence of any Event of Default under this Deed by giving not less than five
days' written notice of such revocation to Grantor; in the event such notice is
given, Grantor shall pay over to Grantee, or to any receiver appointed to
collect the Rents, any lease security deposits. Grantor shall not accept
prepayments of installments of Rent to become due for a period of more than one
month in advance (except for security deposits and estimated payments of
percentage rent, if any).
23. Trust Funds. All lease security deposits of the Real Estate shall
be treated as trust funds not to be commingled with any other funds of Grantor.
Within 10 days after request by Grantee, Grantor shall furnish Grantee
satisfactory evidence of compliance with this subsection, together with a
statement of all lease security deposits by lessees and copies of all Leases not
previously delivered to Grantee, which statement shall be certified by Grantor.
24. Additional Rights. The holder of any subordinate lien or deed to
secure debt on the Subject Property shall have no right to terminate any Lease
whether or not such Lease is subordinate to this Deed nor shall any holder of
any subordinate lien or deed to secure debt join any tenant under any Lease in
any action to foreclose the lien or exercise the rights under such deed to
secure debt or modify, interfere with, disturb or terminate the rights of any
tenant under any Lease. By recordation of this Deed all holders or subordinate
liens or deeds to secure debt are subject to and notified of this provision, and
any action taken by any such holder contrary to this provision shall be null and
void. Upon the occurrence of any Event of Default, Grantee may, in its sole
discretion and without regard to the adequacy of its security under this Deed,
apply all or any part of any amounts on deposit with Grantee under this Deed
against all or any part of the Indebtedness. Any such application shall not be
construed to cure or waive any Default or Event of Default or invalidate any act
taken by Grantee on account of such Default or Event of Default.
25. Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been sufficiently given or served when served
in the manner set forth in the Credit Agreement.
26. No Oral Modification. This Deed may not be changed or terminated
orally. Any agreement made by Grantor and Grantee after the date of this Deed
relating to this Deed shall be superior to the rights of the holder of any
intervening or subordinate lien or encumbrance.
27. Partial Invalidity. In the event any one or more of the provisions
contained in this Deed shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, but each shall
20
be construed as if such invalid, illegal or unenforceable provision had never
been included. Notwithstanding to the contrary anything contained in this Deed
or in any provisions of the Indebtedness or Loan Documents, the obligations of
Grantor and of any other obligor under the Indebtedness or Loan Documents shall
be subject to the limitation that Grantee shall not charge, take or receive, nor
shall Grantor or any other obligor be obligated to pay to Grantee, any amounts
constituting interest in excess of the maximum rate permitted by law to be
charged by Grantee.
28. Grantor's Waiver of Rights. To the fullest extent permitted by
law, Grantor waives the benefit of all laws now existing or that may
subsequently be enacted providing for (i) any appraisement before sale of any
portion of the Subject Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Subject Property from attachment, levy or sale under execution
or exemption from civil process. To the full extent Grantor may do so, Grantor
agrees that Grantor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, homestead, extension or redemption, or
requiring Grantee to exercise the rights granted herein (including, without
limitation, exercise of the power of sale or foreclosure of this Deed as a
mortgage) before exercising any other remedy granted hereunder and Grantor, for
Grantor and its successors and assigns, and for any and all persons ever
claiming any interest in the Subject Property, to the extent permitted by law,
hereby waives and releases all rights of redemption, homestead, valuation,
appraisement, stay of execution, notice of election to mature or declare due the
whole of the secured indebtedness and marshalling in the event of Grantee's
exercise of the rights granted herein (including, without limitation, exercise
of the power of sale or foreclosure of this Deed as a mortgage).
29. Remedies Not Exclusive. Grantee shall be entitled to enforce
payment of the Indebtedness and performance of the Obligations and to exercise
all rights and powers under this Deed or under any of the other Loan Documents
or other agreement or any laws now or hereafter in force, notwithstanding some
or all of the Indebtedness and Obligations may now or hereafter be otherwise
secured, whether by deed to secure debt, mortgage, security agreement, pledge,
lien, assignment or otherwise. Neither the acceptance of this Deed nor its
enforcement, shall prejudice or in any manner affect Grantee's right to realize
upon or enforce any other security now or hereafter held by Grantee, it being
agreed that Grantee shall be entitled to enforce this Deed and any other
security now or hereafter held by Grantee in such order and manner as Grantee
may determine in its absolute discretion. No remedy herein conferred upon or
reserved to Grantee is intended to be exclusive of any other remedy herein or by
law provided or permitted, but each shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. Every power or remedy given by any of the Loan Documents
to Grantee or to which it may otherwise be entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Grantee. In no event shall Grantee, in the exercise of the remedies
provided in this Deed (including, without limitation, in connection with the
assignment of Rents to Grantee, or the appointment of a receiver and the entry
of such receiver on to all or any part of the Subject Property), be deemed a
"mortgagee in possession," and Grantee shall not in any way be made liable for
any act, either of commission or omission, in connection with the exercise of
such remedies.
21
30. Multiple Security. If (a) the Premises shall consist of one or
more parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Deed, Grantee shall now or hereafter hold one
or more additional deeds to secure debt, mortgages, liens, deeds of trust or
other security (directly or indirectly) for the Indebtedness upon other property
in the State in which the Premises are located (whether or not such property is
owned by Grantor or by others) or (c) both the circumstances described in
clauses (a) and (b) shall be true, then to the fullest extent permitted by law,
Grantee may, at its election, commence or consolidate in a single sale or
foreclosure action all sales and foreclosure proceedings against all such
collateral securing the Indebtedness (including the Subject Property), which
action may be brought or consolidated in the courts of any county in which any
of such collateral is located. Grantor acknowledges that the right to maintain a
consolidated sale or foreclosure action is a specific inducement to Grantee to
extend the Indebtedness, and Grantor expressly and irrevocably waives any
objections to the commencement or consolidation of the sale or foreclosure
proceedings in a single action and any objections to the laying of venue or
based on the grounds of forum non conveniens which it may now or hereafter have.
Grantor further agrees that if Grantee shall be prosecuting one or more sale or
foreclosure or other proceedings against a portion of the Subject Property or
against any collateral other than the Subject Property, which collateral
directly or indirectly secures the Indebtedness, or if Grantee shall have
fulfilled the statutory requirements for a sale or shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such sale or other proceedings are being maintained or
judgments were obtained in or outside the State in which the Premises are
located, Grantee may commence or continue sale or foreclosure proceedings and
exercise its other remedies granted in this Deed against all or any part of the
Subject Property and Grantor waives any objections to the commencement or
continuation of a sale or foreclosure pursuant to this Deed or exercise of any
other remedies hereunder based on such other proceedings or judgments, and
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either any action under this Deed or such other proceedings on such basis.
Neither the commencement nor continuation of proceedings to sell the Subject
Property pursuant hereto or to foreclose this Deed nor the exercise of any other
rights hereunder nor the recovery of any judgment by Grantee in any such
proceedings shall prejudice, limit or preclude Grantee's right to commence or
continue one or more sales or foreclosure or other proceedings or obtain a
judgment against any other collateral (either in or outside the State in which
the Premises are located) which directly or indirectly secures the Indebtedness,
and Grantor expressly waives any objections to the commencement of, continuation
of, or entry of a judgment in such other sales or proceedings or exercise of any
remedies in such proceedings based upon any action or judgment connected to this
Deed, and Grantor also waives any right to seek to dismiss, stay, remove,
transfer or consolidate either such other proceedings or any action under this
Deed on such basis. It is expressly understood and agreed that to the fullest
extent permitted by law, Grantee may, at its election, cause the sale of all
collateral which is the subject of a single sale or foreclosure action at either
a single sale or at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of the parties to
dispose of and administer all collateral securing the Indebtedness (directly or
indirectly) in the most economical and least time-consuming manner.
31. Successors and Assigns. All covenants of Grantor contained in this
Deed are imposed solely and exclusively for the benefit of Grantee and its
successors and assigns, and no other person or entity shall have standing to
require compliance with such covenants or be deemed, under any
22
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Grantee at any time if in its sole
discretion (subject to the terms of the Credit Agreement) it deems such waiver
advisable. All such covenants of Grantor shall run with the land and bind
Grantor, the successors and assigns of Grantor (and each of them) and all
subsequent owners, encumbrancers and tenants of the Subject Property, and shall
inure to the benefit of Grantee, its successors and assigns. The word "Grantor"
shall be construed as if it read "Grantors" whenever the sense of this Deed so
requires and if there shall be more than one Grantor, the obligations of the
Grantors shall be joint and several.
32. No Waivers, etc. Any failure by Grantee to insist upon the strict
performance by Grantor of any of the terms and provisions of this Deed shall not
be deemed to be a waiver of any of the terms and provisions hereof, and Grantee,
notwithstanding any such failure, shall have the right thereafter to insist upon
the strict performance by Grantor of any and all of the terms and provisions of
this Deed to be performed by Grantor. Grantee may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Subject Property, any part of the security
held for the obligations secured by this Deed without, as to the remainder of
the security, in any way impairing or affecting the lien of this Deed or the
priority of such lien over any subordinate lien.
33. Governing Law, etc. This Deed shall be governed by and construed
in accordance with the laws of the State of Georgia, except that Grantor
expressly acknowledges that by its terms the Notes shall be governed and
construed in accordance with the laws of the State of New York, without regard
to principles of conflict of law, and for purposes of consistency, Grantor
agrees that in any in personam proceeding related to this Deed the rights of the
parties to this Deed shall also be governed by and construed in accordance with
the laws of the State of New York governing contracts made and to be performed
in that State, without regard to principles of conflict of law.
34. Waiver of Trial by Jury. Grantor and Grantee each hereby
irrevocably and unconditionally waive trial by jury in any action, claim, suit
or proceeding relating to this Deed and for any counterclaim brought therein.
35. Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Deed shall be used interchangeably in singular or plural form and the word
"Grantor" shall mean "each Grantor or any subsequent owner or owners of the
Subject Property or any part thereof or interest therein," the word "Grantee"
shall mean "Grantee or any subsequent holder of the Notes," the word "Notes"
shall mean "the Notes or any other evidence of indebtedness secured by this
Deed," the word "person" shall include any individual, corporation, partnership,
trust, unincorporated association, government, governmental authority, or other
entity, and the words "Subject Property" shall include any portion of the
Subject Property or interest therein. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa. The captions in this Deed are for convenience or
reference only and in no way limit or amplify the provisions hereof.
23
36. WAIVER OF GRANTOR'S RIGHTS. BY EXECUTION OF THIS DEED AND BY
INITIALING THIS ARTICLE, GRANTOR EXPRESSLY: (A) ACKNOWLEDGES THE RIGHT TO
ACCELERATE THE INDEBTEDNESS EVIDENCED BY THE NOTES AND THE POWER OF ATTORNEY
GIVEN HEREIN TO GRANTEE TO SELL THE SUBJECT PROPERTY BY NONJUDICIAL SALE UPON
DEFAULT BY GRANTOR WITHOUT ANY JUDICIAL HEARING AND WITHOUT ANY NOTICE (EXCEPT
AS OTHERWISE PROVIDED HEREIN); (B) EXCEPT TO THE EXTENT PROVIDED OTHERWISE
HEREIN, WAIVES ANY AND ALL RIGHTS WHICH GRANTOR MAY HAVE UNDER THE CONSTITUTION
OF THE UNITED STATES (INCLUDING THE FIFTH AND FOURTEENTH AMENDMENTS THEREOF),
THE VARIOUS PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON
OF ANY OTHER APPLICABLE LAW, TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE
EXERCISE BY GRANTEE OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO GRANTEE; (C)
ACKNOWLEDGES THAT GRANTOR HAS READ THIS DEED AND ITS PROVISIONS HAVE BEEN
EXPLAINED FULLY TO GRANTOR AND GRANTOR HAS CONSULTED WITH COUNSEL OF GRANTOR'S
CHOICE PRIOR TO EXECUTING THIS DEED; AND (D) ACKNOWLEDGES THAT ALL WAIVERS OF
THE AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE KNOWINGLY, INTENTIONALLY AND
WILLINGLY BY GRANTOR AS PART OF A BARGAINED FOR LOAN TRANSACTION:
INITIALED BY GRANTOR:
/s/
----------------
By:_____________
24
This Deed has been duly executed by Grantor on the date first above
written.
THE XXXXXXX XXXXXX COMPANY
By: /s/
--------------------------------
Name:
[CORPORATE SEAL]
Signed, sealed and delivered
this ____ day of December, 1996,
in the presence of:
/s/
--------------------------------
Unofficial Witness
________________________________
Notary Public
My commission expires:
[NOTARY SEAL]
25
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
[Xxxxx County, Georgia]
After recording, please return to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
a partnership which includes
professional corporations
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
DEED TO SECURE DEBT
AND SECURITY AGREEMENT
from
THE XXXXXXX XXXXXX COMPANY, Grantor
to
THE CHASE MANHATTAN BANK, as Administrative Agent, Grantee
DATED AS OF DECEMBER 23, 1996
NOTICE: THIS INSTRUMENT CONTAINS, INTER ALIA, OBLIGATIONS WHICH MAY PROVIDE FOR
A VARIABLE RATE OF INTEREST AND/OR FUTURE AND/OR REVOLVING CREDIT ADVANCES OR
READVANCES, WHICH, WHEN MADE, SHALL HAVE THE SAME PRIORITY AS ADVANCES OR
READVANCES MADE ON THE DATE HEREOF WHETHER OR NOT (I) ANY ADVANCES OR READVANCES
WERE MADE ON THE DATE HEREOF AND (II) ANY INDEBTEDNESS IS OUTSTANDING AT THE
TIME ANY ADVANCE OR READVANCE IS MADE.
THE AGGREGATE PRINCIPAL AMOUNT OF THE NOTES AND ALL OTHER OBLIGATIONS SECURED BY
THIS MORTGAGE IS $100,000,000.
[Spalding County, Georgia]
After recording, please return to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
a partnership which includes
professional corporations
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
DEED TO SECURE DEBT
AND SECURITY AGREEMENT
from
THE XXXXXXX XXXXXX COMPANY, Grantor
to
THE CHASE MANHATTAN BANK, as Administrative Agent, Grantee
DATED AS OF DECEMBER 23, 1996
NOTICE: THIS INSTRUMENT CONTAINS, INTER ALIA, OBLIGATIONS WHICH MAY PROVIDE FOR
A VARIABLE RATE OF INTEREST AND/OR FUTURE AND/OR REVOLVING CREDIT ADVANCES OR
READVANCES, WHICH, WHEN MADE, SHALL HAVE THE SAME PRIORITY AS ADVANCES OR
READVANCES MADE ON THE DATE HEREOF WHETHER OR NOT (I) ANY ADVANCES OR READVANCES
WERE MADE ON THE DATE HEREOF AND (II) ANY INDEBTEDNESS IS OUTSTANDING AT THE
TIME ANY ADVANCE OR READVANCE IS MADE.
THE AGGREGATE PRINCIPAL AMOUNT OF THE NOTES AND ALL OTHER OBLIGATIONS SECURED BY
THIS MORTGAGE IS $100,000,000.
[Xxxxx County, Georgia]
After recording, please return to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
a partnership which includes
professional corporations
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
DEED TO SECURE DEBT
AND SECURITY AGREEMENT
from
THE XXXXXXX XXXXXX COMPANY, Grantor
to
THE CHASE MANHATTAN BANK, as Administrative Agent, Grantee
DATED AS OF DECEMBER 23, 1996
NOTICE: THIS INSTRUMENT CONTAINS, INTER ALIA, OBLIGATIONS WHICH MAY PROVIDE FOR
A VARIABLE RATE OF INTEREST AND/OR FUTURE AND/OR REVOLVING CREDIT ADVANCES OR
READVANCES, WHICH, WHEN MADE, SHALL HAVE THE SAME PRIORITY AS ADVANCES OR
READVANCES MADE ON THE DATE HEREOF WHETHER OR NOT (I) ANY ADVANCES OR READVANCES
WERE MADE ON THE DATE HEREOF AND (II) ANY INDEBTEDNESS IS OUTSTANDING AT THE
TIME ANY ADVANCE OR READVANCE IS MADE.
THE AGGREGATE PRINCIPAL AMOUNT OF THE NOTES AND ALL OTHER OBLIGATIONS SECURED BY
THIS MORTGAGE IS $100,000,000.
TRADEMARK SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October 30, 1996 made by TWCC
ACQUISITION CORP., a Massachusetts corporation (to be merged with and into The
Xxxxxxx Xxxxxx Company, the "Company"), in favor of THE CHASE MANHATTAN BANK, a
New York banking corporation, as administrative agent (in such capacity, the
"Administrative Agent") for the several lenders (the "Lenders") from time to
time parties to the Credit Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of the date hereof
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Company, the Lenders and the Administrative Agent, the
Lenders have severally agreed to make loans to, and the Issuing Lender (as
defined in the Credit Agreement) has agreed to issue and certain of the other
Lenders have agreed to participate in letters of credit for the account of, the
Company upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective loans to, and the obligation of the Issuing Lender to
issue and the Lenders to participate in letters of credit for the account of,
the Company under the Credit Agreement that the Company shall have executed and
delivered this Security Agreement to the Administrative Agent for the ratable
benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
make their respective loans to, and to issue or participate in letters of credit
for the account of, the Company under the Credit Agreement, the Company hereby
agrees with the Administrative Agent, for the ratable benefit of the Lenders, as
follows:
ARTICLE I
SECURITY INTERESTS
1.1 Grant of Security Interest. (a) As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Company hereby
grants to the Administrative Agent for the ratable benefit of the Lenders a
continuing security interest in all of the right, title and interest of the
Company in, to and under (i) all Trademarks and Trademark Licenses, whether now
existing
2
or hereafter from time to time acquired; and (ii) all Proceeds and Products
thereof (all of the above, collectively, the "Collateral").
(b) The security interest of the Administrative Agent under this
Agreement extends to all Collateral of the kind which is the subject of
this Agreement which the Company may acquire at any time during the
continuation of this Agreement.
ARTICLE II
SPECIAL PROVISIONS CONCERNING TRADEMARKS
2.1 Rights of Administrative Agent and Lenders; Limitations on
Administrative Agent's and Lenders' Obligations. (a) Company Remains Liable
under Trademark Licenses. Anything herein to the contrary notwithstanding, the
Company shall remain liable under each of the Trademark Licenses to observe and
perform all the material conditions and obligations to be observed and performed
by it thereunder, all in accordance with the terms of any agreement giving rise
to each such Trademark License. Neither the Administrative Agent nor any Lender
shall have any obligation or liability under any Trademark License by reason of
or arising out of this Security Agreement or the receipt by the Administrative
Agent or any Lender of any payment relating to such Trademark License pursuant
hereto, nor shall the Administrative Agent or any Lender be obligated in any
manner to perform any of the obligations of the Company under or pursuant to any
Trademark License, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Trademark License, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.
(b) Notice to Contracting Parties. At any time after an Event of
Default has occurred and so long as such Event of Default shall be
continuing, upon the request of the Administrative Agent the Company shall,
and the Administrative Agent may (with concurrent notice to the Company
thereof), notify parties to the Trademark Licenses that the Trademark
Licenses have been assigned to the Administrative Agent for the ratable
benefit of the Lenders and that payments in respect thereof shall be made
directly to the Administrative Agent. At any time after an Event of Default
shall have occurred and be continuing, the Administrative Agent may in its
own name or in the name of others communicate with parties to the Trademark
Licenses to verify with them to its satisfaction the existence, amount and
terms thereof.
2.2 Representations and Warranties. The Company hereby represents and
warrants that: (i) Schedule I hereto includes all material Trademarks and
Trademark Licenses owned by the Company in its own name as of the date hereof;
(ii) to the best of the Company's knowledge, except as set forth on Schedule I,
each Trademark is valid, subsisting, unexpired and enforceable and has not been
abandoned; (iii) except as set forth in Schedule I, none of such
3
Trademarks is the subject of any licensing or franchise agreement; (iv) all
licenses of the Company's Trademarks are in force and, to the best knowledge of
the Company, not in default; (v) no holding, decision or judgment has been
rendered by any Governmental Authority with respect to any Trademark which would
limit, cancel or question the validity of any Trademark; (vi) except as set
forth on Schedule I, no action or proceeding is pending or, to the knowledgeof
the Company, threatened (x) seeking to limit, cancel or question the validity of
any material Trademark or the Company's ownership thereof, or (y) which, if
adversely determined, would have a material adverse effect on the value of any
material Trademark.
2.3 Covenants. The Company covenants and agrees with the
Administrative Agent and the Lenders that, from and after the date of this
Security Agreement until the Obligations are paid in full, the Commitments are
terminated and either no Letters of Credit are outstanding or each outstanding
Letter of Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent (i) the Company (either itself or
through licensees) will, except with respect to any Trademark that the Company
shall reasonably determine is of immaterial economic value to it or otherwise
reasonably determines not to do so, (A) continue to use each Trademark on each
and every trademark class of goods applicable to its current line as reflected
in its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (B)
maintain as in the past the quality of products and services offered under such
Trademark, (C) use reasonable efforts to employ such Trademark with the
appropriate notice of registration, (D) not adopt or use any xxxx which is
confusingly similar or a colorable imitation of such Trademark unless within 45
days after such use or adoption the Administrative Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest in such xxxx
pursuant to this Security Agreement, and (E) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
Trademark may become invalidated.
(b) The Company will notify the Administrative Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any Trademark may become abandoned or dedicated,
or of any adverse determination or material development (including, without
limitation, the institution of, or any such determination or development
in, any proceeding in the United States Patent and Trademark Office or any
court or tribunal in any country) regarding the Company's ownership of any
Trademark or its right to register the same or to keep and maintain the
same.
(c) Whenever the Company, either by itself or through any agent,
employee, licensee or designee, shall file for the registration of any
Trademark with the United States Patent and Trademark Office or any similar
office or agency in any other country or any political subdivision thereof,
the Company shall report such filing to the Administrative Agent and the
Lenders within five Business Days after the last day of the fiscal quarter
in which such filing occurs. Upon request of the Administrative Agent, the
Company shall execute and deliver any and all agreements, instruments,
documents, and papers as the Administrative Agent may request to evidence
the Administrative Agent's and the Lenders'
4
security interest in any Trademark and the goodwill and general intangibles
of the Company relating thereto or represented thereby, and the Company
hereby appoints and constitutes the Administrative Agent its
attorney-in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed;
such power being coupled with an interest and is irrevocable until the
Obligations are paid in full, the Commitments are terminated and no Letters
of Credit are outstanding.
(d) The Company, except with respect to any Trademark the Company
shall reasonably determine is of immaterial economic value to it or it
otherwise reasonably determines not to so do and except with respect to any
Trademark that is not registrable, will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, or any similar office or agency in any
other country or any political subdivision thereof, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain
each registration of Trademarks, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability when appropriate.
(e) In the event that any Trademark included in the Collateral is
infringed, misappropriated or diluted by a third party, the Company shall
promptly notify the Administrative Agent and the Lenders after it learns
thereof and shall, unless the Company shall reasonably determine that such
Trademark is of immaterial economic value to the Company, which
determination the Company shall promptly report to the Administrative Agent
and the Lenders, promptly xxx for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover any
and all damages for such infringement, misappropriation or dilution, or
take such other actions as the Company shall reasonably deem appropriate
under the circumstances to protect such Trademark.
2.4 Administrative Agent's Appointment as Attorney-in-Fact. The
Company hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Company and in the name of the Company or in its own name, from
time to time after the occurrence, and during the continuation, of an Event of
Default in the Administrative Agent's discretion, for the purpose of carrying
out the terms of this Security Agreement, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Security Agreement, and, without
limiting the generality of the foregoing, the Company hereby gives the
Administrative Agent the power and right, on behalf of the Company, without
notice to or assent by the Company, to do the following:
(a) in the name of the Company or its own name, or otherwise, to take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Trademark License or with respect to any other Collateral and to file any
claim or to take any other action or proceeding in any court
5
of law or equity or otherwise deemed appropriate by the Administrative
Agent for the purpose of collecting any and all such moneys due under any
Trademark License or with respect to any other Collateral whenever payable;
(b) to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, provided that if such taxes are being
contested in good faith and by appropriate proceedings, the Administrative
Agent and the Lenders will consult with the Company before making any such
payment; and
(c) (i) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (ii) to ask or demand for, collect, receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;
(iii) to commence and prosecute any suits, actions or proceedings at law or
in equity in any court of competent jurisdiction to collect the Collateral
or any thereof and to enforce any other right in respect of any Collateral;
(iv) to defend any suit, action or proceeding brought against the Company
with respect to any Collateral; (v) to settle, compromise or adjust any
suit, action or proceeding described in clause (iv) above and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (vi) to assign any Trademark
(along with the goodwill of the business to which any such Trademark
pertains)throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (vii) generally, to sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent were
the absolute owner thereof for all purposes, and to do, at the
Administrative Agent's option and the Company's expense, at any time, or
from time to time, all acts and things which the Administrative Agent
reasonably deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent's and the Lenders' Liens thereon
and to effect the intent of this Security Agreement, all as fully and
effectively as the Company might do.
The Company hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
2.5 Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent on behalf of the Lenders may exercise, in addition to
all other rights and remedies granted to them in this Security Agreement and in
any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon the Company or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the
6
Collateral, or any part thereof, and/or may forthwith sell, assign, give an
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Administrative Agent or any Lender shall have the right upon
any such public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the Collateral
so sold, free of any right or equity of redemption in the Company, which right
or equity is hereby waived and released. The Administrative Agent shall apply
the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Administrative Agent may elect subject
to subsection 4.9 of the Credit Agreement, and only after such application and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Administrative Agent account for the surplus, if any, to the
Company. To the extent permitted by applicable law, the Company waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder, except
to the extent arising from the gross negligence or willful misconduct of the
Administrative Agent or such Lender. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition. The Company shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
ARTICLE III
DEFINITIONS
Unless otherwise defined herein or in the preamble or recitals hereto,
terms which are defined in the Credit Agreement and used herein are so used as
so defined and the following terms shall have the following meanings:
"Code" means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations" means (i) the unpaid principal amount of, and interest
on (including interest accruing on or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company, whether
7
or not a claim for such post-filing or post-petition interest is allowed),
the Loans and all other obligations and liabilities of the Company to the
Administrative Agent, the Issuing Lender or the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, any Letter of Credit or L/C Application, the other
Credit Documents and any other document executed and delivered or given in
connection therewith or herewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of
counsel to the Administrative Agent, the Issuing Lender or to the Lenders
that are required to be paid by the Company pursuant to the terms of the
Credit Agreement) or otherwise, and (ii) all obligations of the Company to
any Lender or Lenders or its or their Affiliates under or in respect of any
Interest Rate Agreement.
"Proceeds" means "proceeds", as such term is defined in Section
9-306(1) of the Code and, to the extent not included in such definition,
shall include, without limitation, (a) any and all proceeds of any
insurance, indemnity, warranty, guaranty or letter of credit payable to the
Company, from time to time with respect to any of the Collateral, (b) all
payments (in any form whatsoever) paid or payable to the Company from time
to time in connection with any taking of all or any part of the Collateral
by any Governmental Authority or any Person acting under color of
Governmental Authority, (c) all judgments in favor of the Company in
respect of the Collateral and (d) all other amounts from time to time paid
or payable or received or receivable under or in connection with any of the
Collateral.
"Products" are used herein as so defined in the Code.
"Trademark License" means any agreement, written or oral, providing
for the grant by or to the Company of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule I
hereto.
"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source of business identifiers, and the
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any state
thereof or any other country or any political subdivision thereof, or
otherwise, including, without limitation, any thereof referred to in
Schedule I hereto, and (b) all renewals thereof.
ARTICLE IV
MISCELLANEOUS
8
4.1 Amendments, etc. with Respect to the Obligations. The Company
shall remain obligated hereunder, and the Collateral shall remain subject to the
Lien granted hereby notwithstanding that, without any reservation of rights
against the Company, and without notice to or further assent by the Company, any
demand for payment of any of the Obligations made by the Administrative Agent,
the Issuing Lender or any Lender may be rescinded by the Administrative Agent,
the Issuing Lender or any Lender, and any of the Obligations continued, and the
Obligations, or the liability of the Company or any other Person upon or for any
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered, or released by the Administrative Agent, the Issuing Lender or any
Lender, and the Credit Agreement, the Notes, the other Credit Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or part, as the Administrative
Agent, the Issuing Lender or any Lender may deem advisable from time to time,
and any guarantee, right of offset or other collateral security at any time held
by the Administrative Agent, the Issuing Lender or any Lender for the payment of
the Obligations may be sold, exchanged, waived, surrendered or released. None of
the Administrative Agent, the Issuing Lender or any Lender shall have any
obligation to protect, secure, perfect or insure this or any other Lien at any
time held by it as security for the Obligations or any property subject thereto.
The Company waives any and all notice of the creation, renewal, extension or
accrual of any of the Obligations and notice of or proof of reliance by the
Administrative Agent, the Issuing Lender or any Lender upon this Security
Agreement; the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred in reliance upon this Security
Agreement; and all dealings between the Company and the Administrative Agent,
the Issuing Lender or any Lender, shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Security Agreement. The
Company waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Company with respect to the Obligations.
4.2 Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest.
4.3 Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
4.4 Section Headings. The section headings used in this Security
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
4.5 No Waiver; Cumulative Remedies. Neither the Administrative Agent,
the Issuing Lender nor any Lender shall by any act (except by a written
instrument pursuant to Subsection 4.6 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any
9
right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof. No failure
to exercise, nor any delay in exercising, on the part of the Administrative
Agent, the Issuing Lender or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent, the Issuing Lender or any Lender of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Administrative Agent, the Issuing Lender or such Lender would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
4.6 Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Security Agreement represents the entire agreement of the
Company with respect to the subject matter hereof and there are no promises or
representations by the Administrative Agent or any Lender relative to the
subject matter hereof not reflected herein or in the other Credit Documents.
None of the terms or provisions of this Security Agreement may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Company and the Administrative Agent, provided that any
provision of this Security Agreement may be waived by the Administrative Agent
in a written letter or agreement executed by the Administrative Agent or by
telex or facsimile transmission from the Administrative Agent. This Security
Agreement shall be binding upon the successors and assigns of the Company and
shall inure to the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
4.7 Notices. All notices, requests and demands to or upon the Company
or the Administrative Agent or any Lender to be effective shall be in writing or
by telecopy or telex and unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or, in the case
of mail, three days after deposit in the postal system, first class postage
prepaid, or, in the case of telecopy notice, when sent, or, in the case of telex
notice, when sent, answerback received, addressed to a party at the address
provided for such party in the Credit Agreement.
4.8 Counterparts. This Security Agreement may be executed by one or
more of the parties hereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
4.9 Authority of Administrative Agent. The Company acknowledges that
the rights and responsibilities of the Administrative Agent under this Security
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Security Agreement shall, as between the
10
Administrative Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Company, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Lenders with full and valid authority so to act or refrain from acting, and
the Company shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
4.10 Releases. The Administrative Agent and the Lenders agree to
cooperate with the Company and its Subsidiaries with respect to any sale
permitted by subsection 8.5 of the Credit Agreement and promptly take such
action and execute and deliver such instruments and documents necessary to
release the Liens and security interests created hereby relating to any of the
assets or property affected by any sale permitted by subsection 8.5 of the
Credit Agreement including, without limitation, any necessary Uniform Commercial
Code amendment, termination or partial termination statement.
4.11 Termination. This Security Agreement (other than with respect to
any cash collateral securing any outstanding Letter of Credit) shall terminate
when all the Obligations have been paid in full, the Commitments are terminated
and either no Letters of Credit are outstanding or each outstanding Letter of
Credit has been cash collateralized so that it is fully secured to the
satisfaction of the Administrative Agent. Upon such termination, the
Administrative Agent shall reassign and redeliver (or cause to be reassigned and
redelivered) to the Company, or to such person or persons as the Company shall
designate, or to whomever may be lawfully entitled to receive such surplus,
against receipt, such of the Collateral (if any) (other than with respect to any
cash collateral securing any outstanding Letter of Credit) as shall not have
been sold or otherwise applied by the Administrative Agent pursuant to the terms
hereof and shall still be held by it hereunder, together with appropriate
instruments or reassignment and release. Any such reassignment and release shall
be without recourse upon or warranty by the Administrative Agent (other than a
warranty that the Administrative Agent has not assigned its rights and interests
hereunder to any Person) and at the expense of the Company.
11
IN WITNESS WHEREOF, the Company and the Administrative Agent have
caused this Security Agreement to be duly executed and delivered as of the date
first above written.
TWCC ACQUISITION CORP.
By: /s/
--------------------------------
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: /s/
--------------------------------
Title:
Schedule I to the Trademark Security Agreement
I. Trademarks and Servicemarks (Registration or Application)
All registered trademarks, unless otherwise noted, are registered in the United
States
Xxxx Number Date Comments
B# SHARP and design 704,992 9/27/60 Security interest
B# SHARP and design 1,245,366 7/12/83 Security interest; CANCELLED
9/14/90
CARTER'S 74/006,465 11/16/89 Published 6/18/91; Security interest;
Pending opposition action by Xxxxxx
Footwear, Inc. filed 9/13/91
CARTER'S 74/006,457 11/16/89 ABANDONED 1/5/91
CARTER'S 74/006,465 11/16/89 Allowance filed; 8/25/92; Security
interest
CARTER'S 1,117,280 5/1/79 Security interest
CARTER'S 1,823,529 2/22/94 Security interest
CARTER'S 1,830,836 4/12/94 Security interest
CARTER'S 1,839,028 6/7/94 Security interest
CARTER'S 1,861,582 1/8/94
CARTER'S block letters 65,969 11/5/07 Renewed 11/5/87; Security interest
CARTER'S stylized letters 153,906 3/28/22 Renewed 3/28/82; Security interest
CARTER'S stylized letters 328,815 10/8/35 Renewed 8/28/95; Security interest
XXXXXX BABY 1,255,389 10/25/83 CANCELLED 2/28/90; Security
interest
CARTERETTE stylized letters 551,796 12/4/51 EXPIRED; Security interest
CARTER'S COMFORT YOU'VE 74/485,195 2/1/95 ABANDONED 7/20/95
GROWN TO LOVE
CARTER'S COMFORT YOU'VE 74/654,960 4/3/95 Pending
GROWN TO LOVE
CARTER'S DIFFERENT BY 74/428,169 8/24/93 ABANDONED 7/20/95
DESIGN
CARTER'S DIFFERENT BY 74/654,959 4/3/95 Pending
DESIGN
CARTER'S DIFFERENT BY 74/428,159 8/24/93 ABANDONED 7/20/95
DESIGN and design
CARTER'S DIFFERENT BY 74/654,962 4/3/95 Pending
DESIGN and design
2
Xxxx Number Date Comments
CARTER'S FOR KIDS 74/723,096 8/31/95 Pending
CARTER'S FUZZY FLEECE 75/063,631 2/26/96 Pending
CARTER'S GROWBODY and 1.819.993 2/8/94
design
CARTER'S LITTLE HEIRLOOMS 74/646,836 3/15/95 Pending
XXXXXX-SET 685,606 9/22/59 Renewed 9/22/79; Security interest
XXXXXX-SET stylized letters 572,460 3/24/53 EXPIRED; Security interest
THIS GARMENT IS XXXXXX-SET 572,462 3/24/53 Renewed 8/6/93; Security interest
WILL NOT SHRINK OUT OF FIT
and design
COMFORT YOU'VE GROWN TO 74/485,175 2/1/94 ABANDONED 7/20/95
LOVE
COMFORT YOU'VE GROWN TO 74/654,961 4/3/95
LOVE
Design only 74/163,278 5/3/91 ABANDONED 1/15/93; Security
interest
Design only 1,305,988 1/20/84 CANCELLED 11/4/92; Security
interest
Design only 1,813,781 12/28/93
DIAPENDA 507,250 3/1/49 EXPIRED 3/1/89; Security interest
HANDY-CUFFS stylized letters 608,901 7/12/55 Renewed 7/12/95; Security interest
HEART/TREE LOGO 74/059,944 5/17/90 ABANDONED 6/24/91; Security
interest
JAMAKINS 1,418,444 11/25/86 Security interest
JIFFON 333,749 4/7/36 Renewed 1/23/96; Security interest
NEVABIND 500,112 4/20/48 Renewed 4/20/88; Security interest
SINGING NEEDLES and design 620,434 1/31/56 Renewed 1/31/76; Renewed in 1966;
Security interest
SPANKY PANTS stylized letters 583,493 12/8/53 EXPIRED; Security interest
TODAY'S CLASSICS 1,552,944 8/22/89 Security interest
T.O.T.S. 74/555,673 8/1/94 Allowance filed 3/5/96
TRIGS 993,457 9/24/74 EXPIRED; Security interest
TYKES 1,515,444 12/6/88 Security interest
TYKES and design 1,515,445 12/6/88 Security interest
TYKES stylized letters 353,040 12/21/37 Renewed 12/21/77; Security interest
3
II. Trademark Licenses
A. The Xxxxxxx Xxxxxx Company, as Licensor
Licensee Expiration Date Renewal Options
Xxxxxx Home Wallcoverings 12/31/97 No
Dolly, Inc. 12/31/96 No
Excellence Underwear 12/31/99 No
Gold, Inc. 12/31/00 Yes
Kolcraft Enterprises, Inc. 12/31/97 No
Xxxxx International 12/31/96 Yes
Monogram 12/31/96 No
Mount Xxxxxx Xxxxx 12/31/97 Yes
Prestige Toy Corp. 12/31/00 Exercised
Samara Bros., Inc. 12/31/99 Exercised
Xxxx Xxx 12/21/00 Yes
Stonemark, Inc. 12/31/98 Yes
B. The Xxxxxxx Xxxxxx Company, as Licensee
Licensee Expiration Date Renewal Options
Christian Dior New York, Inc., 12/31/98 No
licensing to Xxxxxx Xxxxxxx Designs,
licensing to Lehoc, Inc., licensing
to The Xxxxxxx Xxxxxx Company
III. Trade Names
BABY DIOR
BOYNTON FOR KIDS
XXXXXXXX KIDS
CARTERS
CARTER'S
CARTER'S GROWBODY
CARTER'S NATURAL
CHRISTIAN DIOR
INNERWOOL
REMIRA
TYKES