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EXHIBIT 10.48
EXECUTION COPY
LITIGATION L/C AND TERM LOAN C AGREEMENT
LITIGATION L/C AND TERM LOAN C AGREEMENT, dated as of October 24, 1997
among Code-Alarm, Inc., a Michigan corporation (a "Borrower"); GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation (in its individual capacity, "GE
Capital"), for itself, as a Term Lender, and as Agent for Term Lenders, and the
other Term Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrower desires that the Term Lenders provide financial
accommodations in the form of a risk participated guaranty issued by Agent for
the benefit of a surety which may issue a Bond or Bonds in connection with
Borrower's potential appeal of a certain potential adverse judgment or
judgments in or relating to the DEI Litigation; and for these purposes, Agent
is willing to enter into this Agreement and issue such guaranty and the Term
Lenders are willing to provide the Term Loan C Commitment, advance Term Loan C
and enter into such risk participations, subject to the terms and conditions
set forth herein and in the "Credit Agreement" referred to below;
WHEREAS, Borrower desires that the Term Lenders may alternatively make a
direct term loan for Borrower's benefit to satisfy a final judgment or
settlement with respect to the DEI Litigation without first issuing a
Litigation L/C or after terminating the Litigation L/C prior to its being
drawn;
WHEREAS, Borrower desires to secure all of its obligations under this
Agreement by granting to Agent, for the benefit of Agent and the Term Lenders,
security interests in and liens upon all of its existing and after-acquired
personal and real property, provided that such security interests and liens
shall be subordinate to all other liens and security interests granted to
Agent, for the benefit of Agent and the Term Lenders, in connection with the
Credit Agreement (as defined below) in accordance with the terms and condition
of this Agreement; and
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in that certain Credit Agreement of even date herewith among
Borrower, certain other Credit Parties thereto, the Lenders from time to time
party thereto and Agent, and in Annex A thereto (such Credit Agreement,
together with its exhibits, schedules and annexes, as amended, restated,
supplemented, extended and otherwise modified from time to time being
hereinafter referred to as the "Credit Agreement").
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Reimbursement of Litigation L/C Obligations; Term Loan C. (a)
Subject to the terms and conditions set forth in this Agreement, the Credit
Agreement and Annex B to the Credit Agreement, Agent and Term Lenders shall
incur Litigation L/C Obligations in connection with the issuance of the
Litigation L/C. Alternatively, and subject to the terms and conditions set forth
in this Agreement and the Credit Agreement, the Term Lenders shall make a term
loan in connection with the settlement or other final disposition of the DEI
Litigation. Borrower hereby acknowledges and agrees that, notwithstanding
anything contained herein to the contrary, Borrower's Litigation Obligations
shall arise, and shall be deemed to arise, immediately upon Borrower's execution
of this Agreement.
1.1 (b) If Agent and Term Lenders shall have incurred Litigation L/C
Obligations, then, upon payment by the L/C Issuer under the Litigation L/C, and
regardless of whether an Event of Default or Default shall then exist and
notwithstanding the failure of Borrower to satisfy any of the conditions set
forth in Section 2.4 of the Credit Agreement, each Term Lender shall fund its
Pro Rata Share of such payment to Agent pursuant to Annex B of the Credit
Agreement and in accordance with their respective Term Loan C Commitments, and,
upon such payments, Borrower's Obligations to reimburse Agent for the
Litigation L/C Obligations shall thereafter be payable directly to such Term
Lenders pursuant to the terms of this Agreement and Annex B to the Credit
Agreement (which Obligations to the Term Lenders shall thereafter constitute
"Term Loan C" hereunder and thereunder). Borrower's request for Agent's and
Term Lenders' incurrence of Litigation L/C Obligations shall be made on notice
by Borrower to Agent two (2) Business Days prior to incurrence pursuant to
Annex B of the Credit Agreement. Notwithstanding anything herein to the
contrary, such recharacterization of Borrower's Litigation L/C Obligations
hereunder shall occur solely for purposes of references herein, in the Credit
Agreement and in the other Loan Documents, to such Obligations and shall not be
construed to constitute a refinancing, repayment or novation of any such
Obligations. All liens and security interests in the Collateral which are
granted to Agent under the Litigation Collateral Documents to secure the
Litigation L/C Obligations shall continue to secure Borrower's Obligations with
respect to Term Loan C as so recharacterized. The obligations of the Term
Lenders to pay to Agent their respective Pro Rata Shares of payments under the
Litigation L/C hereunder shall be several and not joint.
(c) If Agent shall not have incurred Litigation L/C Obligations, or shall
have terminated the Litigation L/C prior to its being drawn, Borrower may
request that Term Lenders directly advance the Term Loan C by delivering to
Agent a Notice of Term Loan C Advance pursuant to the terms of the Credit
Agreement.
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(d) Each Term Loan C shall be evidenced by a promissory note substantially
in the form of Exhibit A hereto (each a "Term C Note" and collectively the
"Term C Notes"), and Borrower shall execute and deliver its Term C Note to each
Term Lender on the Closing Date in an amount equal to such Term Lender's Term
Loan C Commitment. Each Term C Note, following the applicable Term Lenders'
payment to Agent of its Pro Rata Share of payment under the Litigation L/C, or
following Term Lenders' advance of the Term Loan C pursuant to the Credit
Agreement, shall represent the Obligation of Borrower to pay the amount of the
applicable Term Lender's Term Loan C, together with interest thereon as
prescribed in Section 1.4.
(e) The Litigation L/C and Litigation L/C Obligations shall be subject to
all of the terms and conditions set forth in Annex B to the Credit Agreement,
which Annex is hereby incorporated in its entirety by this reference.
(f) Borrower shall pay the aggregate principal amount of the Term Loan C
in equal, consecutive quarterly installments equal to the lesser of $250,000
and one-twelfth (1/12) of the aggregate original principal amount of such Loan,
on the first day of January, April, July and October of each year, commencing
on the first of such dates occurring after the date on which the L/C Issuer
makes payment under the Litigation L/C or the Term Lenders otherwise advance
the Term Loan C (unless the first of such dates is less than forty-five (45)
days following the date of such payment by the L/C Issuer, in which case such
installments shall commence on the second of such dates occurring after the
date of such payment).
(g) Notwithstanding the foregoing clause (b), the aggregate outstanding
principal balance of the Term Loan C, shall be due and payable in full in
immediately available funds on the Commitment Termination Date, if not sooner
paid in full.
(h) Each payment of principal with respect to the Term Loan C shall be
paid to Agent for the ratable benefit of each Term Lender making a Term Loan C
ratably in proportion to each such Term Lender's respective Term Loan C
Commitment.
1.2 Payments and Prepayments. Borrower may voluntarily prepay, and shall
mandatorily prepay and provide cash collateral for, the Litigation Obligations
in accordance with the terms and conditions of the Credit Agreement. The
proceeds of such prepayments and cash collateral payments, and all other
payments received by Agent and the Term Lenders shall be applied by Agent in
accordance with the terms and conditions of the Credit Agreement.
1.3 Utilization of Litigation L/C and Use of Proceeds. Borrower shall
utilize the Litigation L/C solely to obtain and secure a Bond or Bonds
exclusively in accordance with the terms and conditions set forth in the Credit
Agreement. Borrower shall utilize the proceeds of any direct advance of Term
Loan C under Section 1.1(c) hereof solely for the payment of the Final
Judgment.
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1.4 Interest on Term Loan C. (a) Borrower shall pay interest to Agent,
for the ratable benefit of the Term Lenders, in arrears on each applicable
Interest Payment Date with respect to the outstanding principal balance of Term
Loan C, at the Index Rate plus the Applicable Term Loan Index Margin per annum
or, at the election of Borrower, the applicable LIBOR Rate plus the Applicable
Term Loan LIBOR Margin per annum.
(b) Borrower shall pay Fees with respect to the Litigation L/C as provided
in Annex B to the Credit Agreement.
(c) If any payment on Term Loan C becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension.
(d) All computations of Fees calculated on a per annum basis and interest
shall be made by Agent on the basis of a three hundred and sixty (360) day
year, in each case for the actual number of days occurring in the period for
which such interest and Fees are payable. The Index Rate shall be determined
each day based upon the Index Rate as in effect each day. Each determination
by Agent of an interest rate hereunder shall be conclusive, absent manifest
error.
(e) At the election of Agent (or upon the written request of Requisite
Lenders) confirmed by written notice from Agent to Borrower, and so long as any
Default or Event of Default shall have occurred and be continuing, the interest
rates applicable to the Term Loan C and the Letter of Credit Fees with respect
to the Litigation L/C shall be increased by two percentage points (2%) per
annum above the rates of interest or the rate of such Fees otherwise applicable
hereunder ("Default Rate"). Interest and Letter of Credit Fees at the Default
Rate shall accrue from the date of such notice until such Default or Event of
Default is cured or waived, or the Agent (upon written authorization therefor
from the Requisite Lenders) notifies Borrower that the Default Rate no longer
applies, and shall be payable upon demand.
(f) So long as no Default or Event of Default shall have occurred and be
continuing, and subject to the additional conditions precedent set forth in
Section 2.4 of the Credit Agreement Borrower shall have the option to (i)
convert at any time all or any part of outstanding Term Loan C from Index Rate
Loans to LIBOR Loans, (ii) convert any portion thereof constituting a LIBOR
Loan to an Index Rate Loan, subject to payment of LIBOR breakage costs in
accordance with Section 1.13(b) of the Credit Agreement if such conversion is
made prior to the expiration of the LIBOR Period applicable thereto, or (iii)
continue all or any portion of Term Loan C as a LIBOR Loan upon the expiration
of the applicable LIBOR Period and the succeeding LIBOR Period of that
continued portion of Term Loan C shall commence on the last day of the LIBOR
Period of the Loan to be continued. Any portion of Term Loan C to be made or
continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of such amount. Any
such election must
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be made by 11:00 a.m. (Chicago time) on the third (3rd) Business Day prior to
(1) the date of any proposed Advance which is to bear interest at the LIBOR
Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be
continued as such, or (3) the date on which Borrower wishes to convert any
Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by Borrower in
such election. If no election is received with respect to a LIBOR Loan by
11:00 a.m. (Chicago time) on the third (3rd) Business Day prior to the end of
the LIBOR Period with respect thereto (or if a Default or an Event of Default
shall have occurred and be continuing or if the additional conditions precedent
set forth in Section 2.4 of the Credit Agreement shall not have been
satisfied), that LIBOR Loan shall be converted to an Index Rate Loan at the end
of its LIBOR Period. Borrower must make such election by notice to Agent in
writing, by telecopy or overnight courier. In the case of any conversion or
continuation, such election must be made pursuant to a Notice of
Conversion/Continuation.
(g) Notwithstanding anything to the contrary set forth in this Section
1.4, if a court of competent jurisdiction determines in a final order that the
rate of interest payable hereunder exceeds the Maximum Lawful Rate, then so
long as the Maximum Lawful Rate would be so exceeded, the rate of interest
payable hereunder shall be equal to the Maximum Lawful Rate; provided, however,
that if at any time thereafter the rate of interest payable hereunder is less
than the Maximum Lawful Rate, Borrower shall continue to pay interest hereunder
at the Maximum Lawful Rate until such time as the total interest received by
Agent, on behalf of Term Lenders, is equal to the total interest which would
have been received had the interest rate payable hereunder been (but for the
operation of this paragraph) the interest rate payable since the Closing Date
as otherwise provided in this Agreement. Thereafter, interest hereunder shall
be paid at the rate(s) of interest and in the manner provided elsewhere in this
section, unless and until the rate of interest again exceeds the Maximum Lawful
Rate, and at that time this paragraph shall again apply. In no event shall the
total interest received by any Term Lender pursuant to the terms hereof exceed
the amount which such Term Lender could lawfully have received had the interest
due hereunder been calculated for the full term hereof at the Maximum Lawful
Rate. If the Maximum Lawful Rate is calculated pursuant to this paragraph,
such interest shall be calculated at a daily rate equal to the Maximum Lawful
Rate divided by the number of days in the year in which such calculation is
made. If, notwithstanding the provisions of this Section 1.4(g), a court of
competent jurisdiction shall finally determine that a Term Lender has received
interest hereunder in excess of the Maximum Lawful Rate, Agent shall, to the
extent permitted by applicable law, promptly apply such excess in the order
specified in Section 1.11 of the Credit Agreement and thereafter shall refund
any excess to Borrower or as a court of competent jurisdiction may otherwise
order.
2. CONDITIONS PRECEDENT
The Agent and Term Lenders shall not be obligated to incur Litigation L/C
Obligations, cause the Litigation L/C to be issued or renewed, extended or
modified, or directly advance the Term Loan C pursuant to Section 1.1(c)
hereof, unless and until each of the conditions set forth in Sections 2.1, 2.3
and 2.4 of the Credit Agreement shall have been satisfied
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or provided for in a manner satisfactory to Agent, or waived in writing by
Agent and Term Lenders.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
Agent and Term Lenders, in connection with their respective obligations
under this Agreement, have relied upon the truth, accuracy and completeness of
each of the representations, warranties and covenants set forth in the Credit
Agreement, and all other provisions set forth in the Credit Agreement and
Litigation Collateral Documents, all of which are hereby incorporated herein in
their entirety by this reference.
4. EVENTS OF DEFAULT
Upon the occurrence and during the continuation of any Event of Default or
Default, Agent and Term Lenders shall have, with respect to this Agreement, the
Litigation Obligations and the Collateral securing the Litigation Obligations,
all of the rights and remedies as are provided in the Credit Agreement and the
Litigation Collateral Documents following such occurrences.
5. MISCELLANEOUS
5.1 Amendments and Waivers. This Agreement may be amended or otherwise
modified only upon the express written agreement of the parties hereto.
5.2 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
5.3 GOVERNING LAW. THIS AGREEMENT, LITIGATION COLLATERAL DOCUMENTS AND
THE LITIGATION OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS LOCATED IN XXXX COUNTY, CITY OF CHICAGO, ILLINOIS SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
CREDIT PARTIES, AGENT AND TERM LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF
THE LITIGATION COLLATERAL DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OF THE LITIGATION COLLATERAL DOCUMENTS,
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PROVIDED, THAT AGENT, TERM LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
XXXX COUNTY, CITY OF CHICAGO, ILLINOIS AND, PROVIDED, FURTHER NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE LITIGATION OBLIGATIONS, OR TO ENFORCE
A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION
WHICH SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH
CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THE
CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
5.4 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other parties, or whenever any of the parties desires to
give or serve upon any other parties any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be deemed to have been
validly served, given or delivered as provided in the Credit Agreement. The
giving of any notice required hereunder may be waived in writing by the party
entitled to receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other communication
to any Person (other than Borrower or Agent) designated on Annex I of the
Credit Agreement to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration
or other communication.
5.5 Section Titles. The Section titles contained in this Agreement are
and shall be without substantive meaning or content of any kind whatsoever and
are not a part of the agreement between the parties hereto.
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5.6 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
5.7 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, TERM LENDERS AND ANY CREDIT PARTY
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE
LITIGATION COLLATERAL DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
5.8 Reinstatement. Notwithstanding anything contained herein to the
contrary, this Agreement shall remain in full force and effect and continue to
be effective should any petition be filed by or against Borrower for
liquidation or reorganization, should Borrower become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of Borrower's assets, and
shall continue to be effective or to be reinstated, as the case may be, if at
any time payment and performance of the Litigation Obligations, or any part
thereof, is, pursuant to applicable law, rescinded, avoided or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Litigation Obligations, whether as a "voidable preference," "fraudulent
transfer", "fraudulent conveyance," or otherwise, all as though such payment or
performance had not been made. Notwithstanding anything contained herein to
the contrary, in the event that any payment, or any part thereof, is rescinded,
avoided, reduced, restored or returned, the Litigation Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
avoided, reduced, restored or returned.
5.9 Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 5.3 and 5.7, with its counsel.
5.10 No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
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5.11 Subordination. The Credit Parties, Agent and Term Lenders hereby
agree that, notwithstanding anything in any of the Loan Documents to the
contrary, all Liens of Agent and Term Lenders now or hereafter securing the
Litigation Obligations or any portion thereof shall be subordinate in priority
to all Liens of Agent and Lenders now or hereafter securing the Obligations
which do not constitute Litigation Obligations. From and after the occurrence
of any Event of Default, unless consented to by Agent and the Requisite
Lenders, no payments shall be made, received or enforced with respect to the
Litigation Obligations unless and until all other Obligations shall have been
indefeasibly paid in full and all Commitments shall have expired or been
terminated.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
CODE-ALARM, INC.
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
--------------------------
Title: President
-------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Term Lender
By: /s/ Xxxxxxx X. Xxx Xxxx
----------------------------------
Name: Xxxxxxx X. Xxx Xxxx
----------------------------
Title: Duly Authorized Signatory
---------------------------
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EXHIBIT A
TO
LITIGATION L/C AND TERM LOAN C AGREEMENT
DATED AS OF OCTOBER 24, 1997
Form of Term Loan C Note
Attached.
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EXHIBIT A (1.1 (d)(i))
TO
LITIGATION L/C AND TERM LOAN C AGREEMENT
FORM OF TERM C NOTE
Chicago, Illinois
12,000,000 October 24, 1997
FOR VALUE RECEIVED, the undersigned, CODE-ALARM, INC., a Michigan
corporation ("Borrower"), HEREBY PROMISES TO PAY to the order of GENERAL
ELECTRIC CAPITAL CORPORATION ("Lender") at the offices of GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation, as Agent for Lenders ("Agent"), at
its address at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000,
or at such other place as Agent may designate from time to time in writing, in
lawful money of the United States of America and in immediately available
funds, the amount of TWELVE MILLION DOLLARS AND NO CENTS ($12,000,000) or such
lesser amount as may have been advanced as Term Loan C to the undersigned under
the "Credit Agreement" (as hereinafter defined). All capitalized terms used
but not otherwise defined herein have the meanings given to them in the Credit
Agreement or in Annex A thereto.
This Term C Note is one of the Term C Notes issued pursuant to that
certain Litigation L/C and Term Loan C Agreement dated as of October 24, 1997
by and among Borrower, the other Persons named therein as Credit Parties,
Agent, Lender and the other Persons signatory thereto from time to time as
Lenders (including all annexes, exhibits and schedules thereto and as from time
to time amended, restated, supplemented or otherwise modified, the "Credit
Agreement"), evidences Lender's Term Loan C, and is entitled to the benefit and
security of the Credit Agreement and the Litigation Collateral Documents
referred to therein. Reference is hereby made to the Credit Agreement for a
statement of all of the terms and conditions under which such Term Loan C is
made and is to be repaid. The principal balance of such Term Loan C, the rates
of interest applicable thereto and the date and amount of each payment made on
account of the principal thereof, shall be recorded by Agent on its books;
provided that the failure of Agent to make any such recordation shall not
affect the obligations of Borrower to make a payment when due of any amount
owing under the Credit Agreement or this Term C Note.
Borrower shall pay the aggregate amount of the Term Loan C evidenced
hereby in equal, consecutive quarterly installments equal to the lesser of
(i) $250,000 or (ii) one-twelfth (1/12) of the aggregate original principal
amount of such Loan on the first day of January, April, July and October of
each year, commencing, subject to the terms of the Credit Agreement, on the
first of such dates occurring after the Term Loan C Funding Date. Interest
thereon shall be paid
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until such principal amount is paid in full at such interest rates and at such
times, and pursuant to such calculations, as are specified in the Credit
Agreement. The terms of the Credit Agreement are hereby incorporated herein by
reference.
If any payment on this Term C Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day (except as otherwise provided in the Credit Agreement)
and, with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default, this Term Note
may, as provided in the Credit Agreement, and without demand, notice or legal
process of any kind, be declared, and immediately shall become, due and
payable.
Time is of the essence of this Term C Note. Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by Borrower.
Except as provided in the Credit Agreement, this Term C Note may not be
assigned by Lender to any Person.
THIS TERM C NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE.
CODE-ALARM, INC.
By:___________________________
Name:___________________
Title:__________________
