==================================================================
[LOGO]
XXXXXX-XXXXX INDUSTRIES INC.
LETTER OF CREDIT AGREEMENT
among
MK GROUP, INC.,
MK HOLDINGS, INC.
(which shall be renamed
"XXXXXX-XXXXX INDUSTRIES, INC.")
and
BANKERS TRUST COMPANY
----------------------------------
Dated as of September 22, 1995
----------------------------------
$95,600,000
==================================================================
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Standby Letter of Credit...................................... 1
1.01 Standby Letter of Credit.................................... 1
1.02 Letter of Credit Request.................................... 1
1.03 Agreement to Repay Letter of Credit Drawings............... 2
1.04 Increased Costs............................................ 2
SECTION 2. Other Credit Terms........................................... 3
2.01 Fees....................................................... 3
2.02 Method and Place of Payment................................ 4
2.03 Net Payments; Taxes........................................ 4
SECTION 3. Conditions Precedent......................................... 5
3.01 Effective Date............................................. 5
3.02 No Default; Representations and Warranties................. 5
3.03 Opinion of Counsel......................................... 5
3.04 Corporate Proceedings...................................... 5
3.05 Adverse Change, etc........................................ 6
3.06 Litigation................................................. 6
3.07 Approvals, etc............................................. 6
3.08 Cash Collateral Agreement; Deposit into Cash Collateral
Account................................................... 6
3.09 Credit Agreement Conditions................................ 7
3.10 Payment of Fees............................................ 7
3.11 Letter of Credit Request................................... 7
3.12 Consent Letter............................................. 7
SECTION 4. Representations, Warranties and Agreements................... 7
4.01 Corporate Status........................................... 7
4.02 Corporate Power and Authority.............................. 8
4.03 No Violation............................................... 8
4.04 Litigation................................................. 8
4.05 Approvals.................................................. 8
4.06 Representations and Warranties in the Credit Agreement..... 9
4.07 Use of Credit.............................................. 9
4.08 Investment Company Aa 9
4.09 Public Utility Holding Company Act 9
SECTION 5. Covenants.................................................... 9
5.01 Incorporation by Reference................................. 9
(i)
Page
----
5.02 Consummation of the Merger................................. 10
SECTION 6. Events of Default............................................ 10
6.01 Payments................................................... 10
6.02 Covenants.................................................. 10
6.03 Default under Credit Agreement............................. 10
6.05 Cash Collateral Agreement.................................. 11
SECTION 7. Definitions.................................................. 11
SECTION 8. Miscellaneous................................................ 17
8.01 Payment of Expenses, etc................................... 17
8.02 Right of Setoff ........................................... 18
8.03 Notices.................................................... 19
8.04 Benefit of Agreement....................................... 19
8.05 No Waiver; Remedies Cumulative............................. 19
8.06 Computations............................................... 19
8.07 Governing Law; Submission to Jurisdiction; Venue........... 19
8.08 Counterparts............................................... 20
8.09 Effectiveness.............................................. 20
8.10 Headings Descriptive....................................... 20
8.11 Amendment or Waiver; etc................................... 21
8.12 Survival................................................... 21
8.13 Confidentiality............................................ 21
8.14 Waiver of Jury Trial....................................... 21
SECTION 9. Guaranty..................................................... 22
9.01 The Guaranty............................................... 22
9.02 Bankruptcy................................................. 22
9.03 Nature of Liability........................................ 22
9.04 Independent Obligation..................................... 23
9.05 Authorization.............................................. 23
9.06 Reliance................................................... 24
9.07 Subordination.............................................. 24
9.08 Waiver..................................................... 24
9.09 Maximum Liability.......................................... 25
(ii)
EXHIBIT A - Form of Letter of Credit
EXHIBIT B - Form of Letter of Credit Request
EXHIBIT C - Form of Opinion of Xxxxx, Xxxxx & Xxxxx
EXHIBIT D - Form of Officers' Certificate
EXHIBIT E - Form of Letter of Credit Cash Collateral Agreement
EXHIBIT F - Form of Consent Letter
EXHIBIT G-1 - Form of First Installment Note
EXHIBIT G-2 - Form of Second Installment Note
(iii)
LETTER OF CREDIT AGREEMENT, dated as of September 22, 1995, among MK GROUP,
INC., an Illinois corporation (the "Guarantor"), MK HOLDINGS, INC., an Illinois
corporation and a wholly-owned Subsidiary of the Guarantor ("Acquisition Corp.")
and BANKERS TRUST COMPANY (the "Bank"). Unless otherwise defined herein, all
capitalized terms used herein and defined in Section 7 are used herein as so
defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires that certain of its payment obligations under the
Installment Note be supported by a letter of credit; and
WHEREAS, subject to and upon the terms and conditions herein set forth
(including, without limitation, the guaranty by the Guarantor of all obligations
of the Company under this Agreement), the Bank is willing to issue at the
request and for the account of the Company its letter of credit;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Standby Letter of Credit.
------------------------
1.01 Standby Letter of Credit. Subject to and upon the terms and conditions
------------------------
herein set forth, on any single date occurring at any time on or after the
Effective Date and on the Initial Borrowing Date under the Credit Agreement, the
Company may request the Bank to issue, for the account of the Company and in
support of the payment obligations of the Company in respect of the principal
portion of the Installment Notes issued by the Company, and subject to and upon
the terms and conditions herein set forth the Bank agrees to issue, an
irrevocable standby letter of credit in the form of Exhibit A hereto (the
"Letter of Credit").
1.02 Letter of Credit Request. When the Company desires that the Letter of
------------------------
Credit bc issued, the Company shall give the Bank written notice (or telephonic
notice confirmed in writing) thereof prior to 12:00 Noon (New York time) on
September 22, 1995, which written notice shall be in the form of Exhibit B
hereto (the "Letter of Credit Request"). The Letter of Credit Request shall
include any other documents as the Bank customarily requires in connection
therewith.
1.03 Agreement to Repay Letter of Credit Drawings. (a) The Company hereby
--------------------------------------------
agrees to reimburse the Bank, by making payment to the Bank in immediately
available funds at the Payment Office, for any payment or disbursement made by
the Bank under the Letter of Credit (any such amount so paid or disbursed
until reimbursed, an "Unpaid Drawing") on the date of such payment or
disbursement, with interest on the amount so paid or disbursed by the Bank, to
the extent not reimbursed prior to 12:00 Noon (New York time) on the date of
such payment or disbursement, from and including the date paid or disbursed to
but not including the date the Bank is reimbursed therefor at a rate per annum
which shall be 1.5% plus the Base Rate as in effect from time to time (plus an
additional 2% per annum if not reimbursed by the third Business Day after the
date of such payment or disbursement), such interest also to be payable on
demand. The Bank shall provide the Company prompt notice of any payment or
disbursement made by it under the Letter of Credit, although the failure of, or
delay in, giving any such notice shall not release or diminish the obligations
of the Company under this Section 1.03(a) or under any other Section of this
Agreement.
(b) The Company's obligation under this Section 1.03 to reimburse the Bank
with respect to Unpaid Drawings (including, in each case, interest thereon)
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the Company
may have or have had against the Bank, the Guarantor, the Sellers or any other
Person, including, without limitation, any defense based upon the failure of a
drawing under the Letter of Credit to conform to the terms of the Letter of
Credit or any non-application or misapplication by the beneficiary of the
proceeds of such drawing; the Bank's only obligation to the Company being to
confirm that any documents required to be delivered under the Letter of Credit
appear to have been delivered and that they appear to substantially comply on
their face with the requirements of the Letter of Credit; provided, however,
------------------
that the Company shall not be obligated to reimburse the Bank for any wrongful
payment made by the Bank under the Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the
Bank. Any action taken or omitted to be taken by the Bank under or in connection
with the Letter of Credit if taken or omitted in the absence of gross negligence
or willful misconduct, shall not create for the Bank any resulting liability to
the Company.
1.04 Increased Costs. If at any time after the date of this Agreement the Bank
----------------
or any participant in the Letter of Credit determines that the introduction of
or any change in any applicable law, rule, regulation, order, guideline or
request or in the interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by the Bank or any such participant with any request or directive by
any such authority (whether or not having the force of law) shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against the Letter of Credit issued by the Bank or
participated in by any such participant, or (ii) impose on the Bank or any such
participant any other conditions relating, directly or indirectly, to this
Agreement or the Letter of Credit, and the
-2-
result of any of the foregoing is to increase the cost to the Bank or any such
participant of issuing, maintaining or participating in the Letter of Credit, or
reduce the amount of any sum received or receivable by the Bank or any such
participant hereunder or reduce the rate of return on its capital with respect
to the Letter of Credit, then, upon demand to the Company by the Bank or any
such participant (a copy of which demand shall be sent by such participant to
the Bank), the Company shall pay to the Bank or such participant such additional
amount or amounts as will compensate the Bank or such participant for such,
increased cost or reduction in the amount receivable or reduction on the rate of
return on its capital. The Bank or any participant in the Letter of Credit,
upon determining that any additional amounts will be payable pursuant to this
Section 1.04, will give prompt written notice thereof to the Company, which
notice shall include a certificate submitted to the Company by the Bank or such
participant (a copy of which certificate shall be sent by such participant to
the Bank), setting forth the basis for the calculation of such additional amount
or amounts necessary to compensate the Bank or such participant, although
failure to give any such notice shall not release or diminish the Company's
obligations to pay additional amounts pursuant to this Section 1.04. The
certificate required to be delivered pursuant to this Section 1.04 shall, absent
manifest error, be final, conclusive and binding on the Company.
SECTION 2. Other Credit Terms.
------------------
2.01 Fees (a) The Company shall pay to the Bank a fee in respect of the Letter
----
of Credit (the "Letter of Credit Fee"), for the period from and including the
date of issuance of the Letter of Credit to and including the termination of the
Letter of Credit, computed at a rate per annum equal to 1/8 of 1% on the daily
Stated Amount of the Letter of Credit. Accrued Letter of Credit Fees shall be
due and payable quarterly in arrears on each September 30, December 31, March
31 and June 30, commencing December 31, 1995 and on the earlier of (x) the
expiration date of the Letter of Credit and (y) the date of drawing under the
Letter of Credit.
(b) The Company shall pay to the Bank an upfront fee in respect of the Letter
of Credit (the "Upfront Fee"), equal to .05% of the Stated Amount of the Letter
of Credit (i.e. of $95,600,000). The Upfront Fee shall be due and payable on
the Effective Date.
(c) The Company hereby agrees to pay to the Bank upon each issuance of,
drawing under, and/or amendment of, the Letter of Credit such amount as shall
at the time of such issuance, drawing or amendment be the administrative
charge which the Bank is generally imposing in connection with issuances of,
drawings under or amendments of, letters of credit issued by it.
-3-
(d) The Company shall pay to the Bank such other fees (if any) as may be
agreed to from time to time between the Company and the Bank, when and as due.
(e) All computations of Fees shall be made in accordance with Section 8.06.
2.02 Method and Place of Payment. Except as otherwise specifically provided
---------------------------
herein, all payments under this Agreement shall bc made to the Bank not later
than 12:00 Noon (New York time) on the date when due and shall be made in
immediately available funds and in U.S. Dollars at the Payment Office. Any
payments under this Agreement which are made later than 12:00 Noon (New York
time) shall be deemed to have been made on the next succeeding Business Day.
Whenever any payment to be made hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be payable during such extension at the applicable rate in effect
immediately prior to such extension. All payments made by any Credit Party
hereunder will be made without setoff, counterclaim or other defense.
2.03 Net Payments; Taxes. (a) All payments made by any Credit Party hereunder
-------------------
will be made without setoff, counterclaim or other defense. All such payments
will be made free and clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by
any political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of the
Bank, pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of the
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
levies, imposts, duties, fees or other charges (all such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Company
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, the Company agrees to reimburse the
Bank, upon the written request of the Bank, for taxes imposed on or measured by
the net income or net profits of the Bank pursuant to the laws of the
jurisdiction in which the Bank is organized or in which the principal office or
applicable lending office of the Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which the
Bank is organized or in which the principal office or applicable lending office
of the Bank is located and for any withholding of income or similar taxes
as the Bank shall determine are payable by, or withheld from, the Bank in
respect of such amounts so paid to or on behalf of the Bank pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf
-4-
of the Bank pursuant to this sentence. The Company will furnish to the Bank
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Company. The Company agrees to indemnify and hold harmless the Bank, and
reimburse the Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by the Bank.
(b) If the Company pays any additional amount under this Section 2.03 to the
Bank and the Bank determines in its sole discretion that it has actually
received or realized in connection therewith any refund or any reduction of, or
credit against, its Tax liabilities in or with respect to the taxable year in
which the additional amount is paid, the Bank shall pay to the Company an
amount that the Bank shall, in its sole discretion, determine is equal to the
net benefit, after tax, which was obtained by the Bank in such year as a
consequence of such refund, reduction or credit.
SECTION 3. Conditions Precedent. The obligation of the Bank to issue the
--------------------
Letter of Credit hereunder is subject, at the time of such issuance, to the
satisfaction of the following conditions:
3.01 Effective Date. The Effective Date shall have occurred.
--------------
3.02 No Default; Representations and Warranties. At the time of such issuance,
------------------------------------------
and also after giving effect thereto (i) there shall exist no Default or Event
of Default and (ii) all representations and warranties contained herein and in
the other L/C Documents shall be true and correct in all material respects with
the same effect as though such representations and warranties had been made on
and as of the date of such issuance, 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.
3.03 Opinion of Counsel. The Bank shall have received an opinion, addressed
------------------
to the Bank and dated the date of such issuance, signed Xxxxx, Xxxxx & Xxxxx,
counsel to the Credit Parties, which opinion shall cover the matters contained
in Exhibit C and such other matters incident to the transactions contemplated
herein as the Bank may reasonably request.
3.04 Corporate Proceedings. (a) The Bank shall have received from each Credit
---------------------
Party a certificate, dated the date of such issuance, signed by the President or
any Vice-President of such Credit Party, and attested to by the Secretary or any
Assistant Secretary of such Credit Party, in the form of Exhibit D with
appropriate insertions, together with copies of the certificate of incorporation
and by-laws of such Credit Party and the resolutions of such Credit Party
referred to in such certificate, and all of the foregoing (including such
certificate of incorporation and by-laws) shall be satisfactory to the Bank.
-5-
(b) All corporate and legal proceedings and all instruments and agreements in
connection with the transactions contemplated by this Agreement and the other
L/C Documents shall be satisfactory in form and substance to the Bank, and the
Bank shall have received all information and copies of all certificates,
documents and papers, including good standing certificates, bring-down telegrams
or facsimiles and any other records of corporate proceedings and governmental
approvals, if any, which the Bank may have requested in connection therewith,
such documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities.
3.05 Adverse Change, etc. Since December 31, 1994, nothing shall have occurred
-------------------
(and the Bank shall have become aware of no facts, conditions or other
information not previously known) which the Bank shall reasonably determine (a)
has, or could have, a material adverse effect on the rights or remedies of the
Bank, or on the ability of any Credit Party to perform its obligations to the
Bank hereunder or under the other L/C Documents to which it is a party or (b)
has, or could have, a Material Adverse Effect.
3.06 Litigation. There shall be no actions, suits or proceedings pending or
-----------
threatened (a) with respect to the issuance of the Letter of Credit, this
Agreement or the other L/C Documents or any documentation executed in connection
herewith or the other L/C Documents or the transactions contemplated hereby or
thereby or (b) which the Bank shall reasonably determine could (i) have a
Material Adverse Effect or (ii) have a material adverse effect on the rights or
remedies of the Bank hereunder or under the other L/C Documents or on the
ability of any Credit Party to perform its obligations to the Bank hereunder or
under the other L/C Documents.
3.07 Approvals, etc. (i) All necessary governmental (domestic and foreign) and
--------------
third party approvals in connection with this Agreement and the other L/C
Documents and otherwise referred to herein or therein shall have been obtained
and remain in full force and effect and evidence thereof shall have been
provided to the Bank, and (ii) all applicable waiting periods shall have expired
without any action being taken by any competent authority which restrains,
prevents or imposes materially adverse conditions upon the issuance of the
Letter of Credit and the transactions contemplated by this Agreement and the
other L/C Documents or otherwise referred to herein or therein. Additionally,
there shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon the issuance
of the Letter of Credit or the transactions contemplated by this Agreement and
the other L/C Documents.
3.08 Cash Collateral Agreement; Deposit into Cash Collateral Account. The
---------------------------------------------------------------
Company shall have duly authorized, executed and delivered a cash collateral
agreement substantially in the form of Exhibit E attached hereto (as amended,
modified or supplemented from time to time, the "Cash Collateral Agreement") and
such Cash Collateral Agreement shall be in full force and effect. In addition,
the Company shall have
-6-
made or caused to be made or shall simultaneously make the deposit of
$95,600,000 into the Cash Collateral Account as required by the terms of the
Cash Collateral Agreement.
3.09 Credit Agreement Conditions. All conditions precedent set forth in
---------------------------
Sections 5 and 6 of the Credit Agreement shall have been satisfied (including,
without limitation, the issuance of the Installment Notes), and the Initial
borrowing Date under the Credit Agreement shall have occurred.
3.10 Payment of Fees. All costs, fees and expenses, and all other compensation
---------------
contemplated by this Agreement, due to the Bank (including, without limitation,
legal fees and expenses) shall have been paid to the extent due.
3.11 Letter of Credit Request. The Bank shall have received the Letter of
------------------------
Credit Request satisfying the requirements of Section 1.02 with respect to the
issuance of the Letter of Credit.
3.12 Consent Letter. The Bank shall have received a letter from CT Corporation
--------------
System, presently located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
substantially in the form of Exhibit F, indicating its consent to its
appointment by each Credit Party as its agent to receive service of process as
specified in Section 8.07.
The acceptance of the benefits of the issuance of the Letter of Credit shall
constitute a representation and warranty by each Credit Party to the Bank that
all of the applicable conditions specified above exist as of the date of such
issuance. All of the certificates, legal opinions and other documents and papers
referred to in this Section 3, unless otherwise specified, shall be delivered to
the Bank at its Notice Office and shall be satisfactory in form and substance to
the Bank.
SECTION 4. Representations, Warranties and Agreements. In order to induce the
------------------------------------------
Bank to enter into this Agreement and to issue the Letter of Credit provided for
herein, each Credit Party makes the following representations, warranties and
agreements with the Bank, all of which shall survive the execution and delivery
of this Agreement and the issuance of the Letter of Credit (with the issuance of
the Letter of Credit being deemed to constitute a representation and warranty
that the matters specified in this Section 4 are true and correct in all
material respects on and as of the date hereof, unless stated to relate to a
specific earlier date in which all such representations and warranties shall be
true and correct in all material respects as of such earlier date):
4.01 Corporate Status. Each Credit Party (i) is a duly organized and validly
----------------
existing corporation in good standing under the laws of the jursdiction of its
organization, (ii) has the corporate power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage and (iii)
-7-
is duly qualified and is authorized to do business and is in good standing in
all jurisdictions where the conduct of its business requires such
qualifications, except where failures to be so qualified, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.02 Corporate Power and Authority. Each Credit Party has the corporate power
-----------------------------
and authority to execute, deliver and perform the terms and provisions of each
of the L/C Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
each of such L/C Documents. Each Credit Party has duly executed and delivered
each of the L/C Documents to which it is a party, and each of such L/C Documents
constitutes the legal, valid and binding obligation of each such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
4.03 No Violation. Neither the execution, delivery or performance by any
------------
Credit Party of the L/C Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, nor the consummation of the transactions
contemplated therein, (i) will contravene any applicable provision of any law,
statute, rule or regulation, or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict or be inconsistent
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Cash Collateral Agreement) upon any of the property or assets of any
Credit Party or any of its Subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement, credit agreement or any other agreement
or instrument to which any Credit Party or any of its Subsidiaries is a party or
by which it or any of its property or assets are bound or to which it may be
subject or (iii) will violate any provision of the certificate of incorporation
or by-laws of any Credit Party or any of its Subsidiaries.
4.04 Litigation. There are no actions, suits or proceedings pending or
----------
threatened (i) with respect to any L/C Document or (ii) that could reasonably be
expected to have (a) a Material Adverse Effect or (b) a material adverse effect
on the rights or remedies of the Bank or on the ability of any Credit Party to
perform its obligations to the Bank hereunder and under the other L/C Documents
to which it is, or will be, a party. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the issuance of the Letter of Credit.
4.05 Approvals. No order, consent, approval, license, authorization, or
---------
validation of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, or any
other third party, is required to authorize or is required in connection with
(i) the execution, delivery and performance
-8-
of any L/C Document or (ii) the legality, validity, binding effect or
enforceability of any such L/C Document.
4.06 Representations and Warranties in the Credit Agreement. All
------------------------------------------------------
representations and warranties set forth in the Credit Agreement, are true and
correct in all material respects as of the date hereof.
4.07 Use of Credit. No part of the proceeds of any extension of credit under
-------------
this Agreement will be used for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purpose of buying or carrying any such margin
stock. The issuance of the Letter of Credit will not violate or be inconsistent
with the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
4.08 Investment Company Act. Neither Guarantor nor any of its Subsidiaries is
----------------------
an "investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
4.09 Public Utility Holding Company Act. Neither Guarantor nor any of its
----------------------------------
Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
SECTION 5. Covenants. Each Credit Party hereby covenants and agrees that on
---------
the Effective Date and thereafter for so long as this Agreement is in effect and
until the Letter of Credit is terminated and any Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder, are paid in full:
5.01 Incorporation by Reference. Each of the Guarantor and the Company will,
--------------------------
and will cause each of its respective Subsidiaries to, comply with, subject to
the following sentence, each of the covenants set forth in Sections 8 and 9 of
the Credit Agreement (including, without limitation, where pertinent, the
definitions of defined terms used in such incorporated Sections) to the extent
such covenants are applicable to the Guarantor, the Company or such Subsidiary,
each of which covenants (and definitions) is incorporated herein by reference as
if fully set forth herein in its entirety. Any such covenants set forth in
Sections 8 and 9 of the Credit Agreement (and corresponding definitions) and
incorporated herein by reference (i) shall, if Bankers Trust Company has
assigned more than 50% of its rights under this Agreement, be incorporated
herein as such covenants may have been terminated, waived or amended, modified
and supplemented from time to time in accordance with the terms of the Credit
Agreement and (ii) shall, so long
-9-
as Bankers Trust Company has not assigned more than 50% of its rights under
this Agreement, be incorporated herein as such covenants are in effect on the
Effective Date without giving effect to any termination, waiver, amendment,
modification or supplement thereto and will continue to be binding on the
Guarantor, the Company and their respective Subsidiaries notwithstanding any
such termination, waiver, amendment, modification or supplement, unless
Bankers Trust Company, as the Bank hereunder, has consented to any such
termination, waiver, amendment, modification or supplement in writing for
purposes of this Agreement in which case effect will be given to such
termination, waiver, amendment, modification or supplement for purposes of this
Agreement. In addition, the terms "this Agreement", "herein", "hereof" and words
of similar purport and the references to "Note" or "Notes" as used in the Credit
Agreement shall be deemed to refer to this Agreement and the obligations of the
Company to the Bank hereunder, respectively; all references to "Credit
Document," "Credit Documents," "Document" or "Documents" shall be deemed to
include this Agreement and the other L/C Documents; the term "Event of Default"
as used in the Credit Agreement shall be deemed to refer to an Event of Default
as defined in this Agreement; and the terms "the Agent," "the Banks" and "the
Required Banks" as used in the Credit Agreement shall be deemed to refer to the
Bank.
5.02 Consummation of the Merger. Promptly following the Acquisition, but in
--------------------------
any event on the date of the issuance of the Letter of Credit, Acquisition Corp.
shall consummate the Mergers in accordance with the Acquisition Documents and
all applicable laws. On the date of issuance of the Letter of Credit but after
giving effect to the Mergers, Acquisition Corp., as the surviving corporation of
the Mergers, shall change its name to "Xxxxxx-Xxxxx Industries, Inc.".
SECTION 6. Events of Default. Upon the occurrence of any of the following
-----------------
specified events (each, an "Event of Default"):
6.01 Payments. The Company shall default in the payment when due of (i) any
--------
Unpaid Drawing for three or more Business Days after the date the drawing was
made or (ii) any interest on any Unpaid Drawing, or any Fees or any other
amounts owing to the Bank hereunder or under any other L/C Document, and such
default shall continue unremedied for a period of three or more Business Days;
or
6.02 Covenants. Any Credit Party shall (i) default in the due performance or
---------
observance by it of any term, covenant or agreement contained in Section 5.02 or
(ii) default in the due performance or observance by it of any other term,
covenant or agreement contained in this Agreement and such default shall
continue unremedied for a period of 30 days after written notice to the Company
by the Bank; or
6.03 Default under Credit Agreement. Any "Default" under, and as defined in,
------------------------------
the Credit Agreement (as in effect on the Effective Date) under Section 10.01
-10-
or 10.05 of the Credit Agreement (as such Sections are in effect on the
Effective Date) or any "Event of Default" under, and as defined in, the Credit
Agreement (as in effect on the Effective Date) under Sections 10.03 (as a result
of a violation of any of the covenants contained in Sections 9.09, 9.10 and/or
9.11 thereof), 10.01 or 10.05 of the Credit Agreement (as such sections are in
effect on the Effective Date) (in each case without regard to any amendment,
modification, termination or waiver thereof) shall have occurred, or
6.04 Guaranty. The Guaranty or any provision thereof shall cease to be in full
---------
force or effect, or the Guarantor or any Person acting by or on behalf of the
Guarantor shall deny or disaffirm the Guarantor's obligations under the
Guaranty, or the Guarantor shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed
pursuant to the Guaranty; or
6.05 Cash Collateral Agreement. At any time after the execution and delivery
-------------------------
thereof, the Cash Collateral Agreement or any provision thereof shall cease to
be in full force or effect or shall cease to give the Bank the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a perfected security interest in, and Lien on, all of the
"Collateral" (as defined therein)), in favor of the Bank, superior to and prior
to the rights of all third Persons and subject to no other Liens, or the Company
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to the Cash
Collateral Agreement;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Bank may take any or all of the following actions
(provided, that, if an Event of Default specified in Section 6.03 as a result of
--------
an "Event of Default" (as defined in the Credit Agreement) under Section 10.05
of the Credit Agreement (as such Section is in effect on the Effective Date)
shall occur with respect to the Company, the result which would occur upon the
giving of written notice by the Bank to the Company as specified in clause (i)
below shall occur automatically without the giving of any such notice): (i) by
written notice to the Company, declare all Obligations (including Unpaid
Drawings) owing hereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Credit Party (ii) terminate the Letter of
Credit in accordance with its terms; and (iii) exercise all of its rights and
remedies under the Cash Collateral Agreement and the other L/C Documents,
including, without limitation, applying any or all proceeds in the Cash
Collateral Account in accordance with the terms of the Cash Collateral
Agreement.
SECTION 7. Definitions. As used herein, the following terms shall have the
------------
meanings herein specified unless the context otherwise requires. Defined terms
in this Agreement shall include in the singular number the plural and in the
plural the singular:
-11-
"Acquisition" shall have the meaning provided in the Credit Agreement.
"Acquisition Corp." shall have the meaning provided in the first paragraph of
this Agreement.
"Acquisition Documents" shall have the meaning provided in the Credit
Agreement.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Bank on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Bank, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member bank of the Federal Reserve System in excess of S100,000
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves), plus (2) the then daily net annual assessment rate as
estimated by the Bank for determining the current annual assessment payable by
the Bank to the Federal Deposit Insurance Corporation for insuring three month
certificates of deposit.
"Agreement" shall mean this Letter of Credit Agreement, as the same may be
from time to time modified, amended and/or supplemented.
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Base Rate" at any time shall mean the higher of (x) the rate which is 1/2 of
1% in excess of the Adjusted Certificate of Deposit Rate, (y) 1/2 of 1% in
excess of the Federal Funds Rate and (z) the Prime Lending Rate.
"Business Day" shall mean any day excluding Saturday, Sunday and any day which
shall be in the City of New York or Chicago, Illinois a legal holiday or a day
on which banking institutions are authorized by law or other governmental
actions to close.
"Cash Collateral Account" shall have the meaning provided in the Cash
Collateral Agreement.
-12-
"Cash Collateral Agreement" shall have the meaning provided in Section 3.08.
"Company" shall mean (i) prior to the consummation of the Mergers, Acquisition
Corp., and (ii) after the consummation of the Mergers, Acquisition Corp. as the
surviving corporation of the Mergers but which shall immediately change its name
to "Xxxxxx-Xxxxx Industries, Inc."
"Credit Agreement" shall mean the Credit Agreement, dated as of September 22,
1995, among the Guarantor, the Company, various lending institutions from time
to time party thereto and Bankers Trust Company, as Agent, and except as
otherwise provided herein, as the same may be modified, supplemented, amended,
restated, extended, renewed, refinanced, restructured or replaced from time to
time.
"Credit Party" shall mean the Company and the Guarantor.
"Default" shall mean any event, act or condition which with notice or lapse of
time or both would constitute an Event of Default.
"Effective Date" shall have the meaning provided in Section 8.09.
"Environmental Claims" shall mean any and all administrative, regulatory, or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations, orders or proceedings
relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (hereinafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding ant enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment relating to the environment, employee health
and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA;
the Federal Water Pollution Control Act, 33 U.S.C. (S) 2601 et seq., the Clean
-- ----
Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. (S)
-- ----
3803 et sec.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et seq.; the
---- -----
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C.
(S) 11001
-13-
et seq., the Hazardous Material Transportation Act, 49 U.S.C. (S) 1801 et seq.
-- ---- -- ---
and the Occupational Safety and Health Act, 29 U.S.C. (S) 651 et. seq. (to the
--- ---
extent it regulates occupational exposure to Hazardous Materials); and any state
and local or foreign counterparts or equivalents, in each case as amended from
time to time.
"Event of Default" shall have the meaning provided in Section 6.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest rate
equal for each day during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the Federal
Reserve 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 such day on such
transactions received by the Bank from three Federal Funds brokers of recognized
standing selected by the Bank.
"Fees" shall mean all amounts payable pursuant to, or referred to in, Section
2.01.
"Guaranteed Obligations" shall mean the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
reimbursement obligations and Unpaid Drawings with respect to the Letter of
Credit, together with all the other obligations (including obligations, which,
but for the automatic stay under Section 362(a) of the Bankruptcy Code, would
become due) and liabilities (including, without limitation, indemnities, fees
and interest thereon) of the Company to the Bank now existing or hereafter
incurred under, arising out of or in connection with this Agreement or the other
L/C Documents and the due performance and compliance with all the terms,
conditions and agreements contained in this Agreement and the other L/C
Documents by the Company.
"Guarantor" shall have the meaning provided in the first paragraph of this
Agreement.
"Guaranty" shall mean the guaranty of the Guarantor pursuant to Section 9 of
this Agreement.
"Hazardous Materials" shall mean (a) oil as defined by the Oil Pollution Act
of 1990, 33 U.S.C. (S) 2701 et. seq., (b) any petrochemical or petroleum
-- ---
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (c) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances", "toxic pollutants,"
-14-
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect under any applicable Environmental Law; or (d) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated by
any governmental authority.
"Initial Borrowing Date" shall have the meaning provided in the Credit
Agreement.
"Installment Notes" shall mean and include each of (i) the promissory note,
dated September 22, 1995, issued by the Company to the Sellers as partial
consideration for the Acquisition having a principal amount not to exceed
$90,000,000, which promissory note shall mature no later than December 31, 1996,
bc supported by the Letter of Credit and be in the form of Exhibit G-1 hereto
and (ii) the promissory note, dated September 22, 1995, issued by the Company to
the Sellers as partial consideration for the Acquisition having a principal
amount not to exceed $5,600,000, which promissory note shall mature no later
than December 31, 1996, be supported by the Letter of Credit and be in the form
of Exhibit G-2 hereto.
"L/C Documents" shall mean this Agreement, the Letter of Credit, the Letter
of Credit Request and the Cash Collateral Agreement.
"Letter of Credit" shall have the meaning provided in Section 1.01.
"Letter of Credit Fee" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Request" shall have the meaning provided in Section 1.02.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) 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 or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Material Adverse Effect" shall mean a material adverse effect on the
performance, business, operations, properties, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Acquired
Business (as defined in the Credit Agreement), the Guarantor, the Company, the
Guarantor and its Subsidiaries taken as a whole or the Company and its
Subsidiaries taken as a whole.
"Mergers" shall have the meaning provided in the Credit Agreement.
-15-
"Notice Office" shall mean the office of the Bank located at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxx Xxxxx, or such other
office as the Bank; may designate to the Borrower from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent or
absolute of every type or description, and at any time existing, owing to
the Bank pursuant to the terms of this Agreement or any other L/C Document.
"Payment Office" shall mean the office of the Bank located at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the Bank may
designate to the Borrower from time to time.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Prime Lending Rate" shall mean the rate which the Bank announces from time to
time as its prime lending rate, the Prime Lending Rate to change when and as
such prime lending rate changes. The Prime Lending Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. The Bank may make commercial loans or other loans at rates of interest
at, above or below the Prime Lending Rate.
"Real Property" of any Person shall mean all the right, title and interest of
such Person in and to land, improvements and fixtures, including leaseholds.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Release" shall mean disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the indoor or outdoor environment or into or out of any Real
Property, including the movement of Hazardous Materials through or in the air,
soil, service water, ground water or property.
"Sellers" shall mean collectively, each of the stockholders of Xxxxxx-Xxxxx
Industries, Inc., Mercury Industries, Inc. and Elmco Industries, Inc.
"Stated Amount" of the Letter of Credit shall mean at any time the maximum
amount available to be drawn thereunder (determined regardless of whether any
conditions for drawing could then be met).
-16-
"Subsidiary" of any Person shall mean and include (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries,
has more than a 50% equity interest at the time.
"Taxes" shall have the meaning provided in Section 2.03.
"UCC" shall mean the Uniform Commercial Code as in effect from time to time in
the relevant jurisdiction.
"Unpaid Drawing" shall have the meaning provided in Section 1.03(a).
"Upfront Fee" shall have the meaning provided in Section 2.01(b).
"U.S. Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States of America.
"Written," "written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.
SECTION 8. Miscellaneous.
-------------
8.01 Payment of Expenses, etc. The Company shall: (i) whether or not the
------------------------
transactions herein contemplated are consummated, pay all reasonable out-of-
pocket costs and expenses of the Bank (including, without limitation, the
reasonable fees and disbursements of White & Case) in connection with the
preparation, execution and delivery of this Agreement and the other L/C
Documents and the documents and instruments referred to herein and therein and
any amendment, waiver or consent relating hereto or thereto, and of the Bank in
connection with the enforcement of this Agreement and the other L/C Documents
and the documents and instruments referred to herein and therein (including,
without limitation, the reasonable fees and disbursements of counsel for the
Bank) and expenses incurred in connection with any reorganization or proposed
reorganization of the Guarantor, the Company or any of their respective
Subsidiaries; (ii) pay and hold the Bank harmless from and against any and all
present and future stamp, excise and other similar taxes with respect to the
foregoing matters and save the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to the Bank) to pay such taxes; and (iii) indemnify
the Bank and each of its officers. directors, employees, representatives and
-17-
agents from and hold each of them harmless against any and all liabilities,
obligations (including removal or remedial actions), losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
(including attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not the Bank is a party thereto) related to the
entering into and/or performance of this Agreement or any other L/C Document or
the use of the Letter of Credit or the consummation of any transactions
contemplated herein or in any other L/C Document or the exercise of any of their
rights or remedies provided herein or in the other L/C Documents, or (b) the
actual or alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property owned, leased
or at any time operated by any Credit Party or any of its Subsidiaries, the
Release, generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned, leased or operated by any
Credit Party or any of its Subsidiaries, the non-compliance of any Real Property
with foreign, federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any Real Property, or
any Environmental Claim asserted against any Credit Party, any of its
Subsidiaries, its operations or any Real Property owned, leased or at any time
operated by any Credit Party or any of its Subsidiaries, including, in each
case, without limitation, the fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the undertaking
to indemnify, pay or hold harmless the Bank set forth in the preceding sentence
may be unenforceable because it is violative of any law or public policy, each
Credit Party shall make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities which is permissible under applicable
law.
8.02 Right of Setoff. In addition to any rights now or hereafter granted under
---------------
applicable law or otherwise, and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, the Bank is hereby authorized at any
time or from time to time, without presentment, demand, protest or other notice
of any kind to any Credit Party or any of its Subsidiaries or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by the Bank (including, without
limitation, by branches and agencies of the Bank wherever located) to or for the
credit or the account of any Credit Party or any of its Subsidiaries against and
on account of the Obligations and liabilities of any Credit Party or any of its
Subsidiaries to the Bank under this Agreement or under any of the other L/C
Documents, and all other claims of any nature or description arising out of or
connected with this Agreement or any other L/C Document, irrespective of whether
or not the Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
-18-
8.03 Notices. Except as otherwise expressly provided herein, all notices and
-------
other communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered, if to any Credit Party, at the address
specified opposite its signature below; if to the Bank, at the Notice Office;
or, at such other address as shall be designated by any party in a written
notice to the other parties hereto. All such notices and communications shall,
when mailed, telegraphed telexed, telecopied or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the Bank shall
not be effective until received by the Bank.
8.04 Benefit of Agreement. This Agreement shall be binding upon and inure to
--------------------
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided, however, no Credit Party may assign or transfer
-------- --------
any of its rights, obligations or interest hereunder or under any other L/C
Document without the prior written consent of the Bank. The Bank may assign,
negotiate, pledge or otherwise hypothecate all or any portion of this Agreement
or the Cash Collateral Agreement, or grant participations herein, in the Letter
of Credit, the Cash Collateral Agreement or in any of its rights or security
hereunder or under the Cash Collateral Agreement, including, without limitation,
the instruments securing the Company's obligations hereunder.
8.05 No Waiver; Remedies Cumulative. No failure or delay on the part of the
------------------------------
Bank in exercising any right, power or privilege hereunder or under any other
L/C Document and no course of dealing between any Credit Party and the Bank
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder or under and other L/C Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights, powers and remedies herein or
in any other L/C Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which the Bank would otherwise have. No notice to
or demand on any Credit Party in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Bank to any other or further action in
any circumstances without notice or demand.
8.06 Computations. All computations of interest and Fees hereunder shall be
------------
made on the basis of a year of 360 days for the actual number of days including
the first day but excluding the last day) occurring in the period for which such
interest or Fees are payable.
8.07 Governing Law: Submission to Jurisdiction: Venue. (a) THIS AGREEMENT AND
THE OTHER L/C DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE
-19-
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. Any legal action or proceeding with respect to this Agreement or any other
L/C Document may be brought in the courts of the State of New York or of the
United States for the Southern District of New York, and, by execution and
delivery of this Agreement, each Credit Party hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each Credit Party hereby further
irrevocably designates, appoints and empowers CT Corporation System, with
offices on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
preceding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, each Credit Party agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purpose
of this provision satisfactory to the Bank under this Agreement. Each Credit
Party further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Guarantor or
the Company, as the case may be, at its address set forth opposite its signature
below, such service to become effective 30 days after such mailing. Nothing
herein shall affect the right of the Bank under this Agreement to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other L/C
Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
8.08 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts executed by all the parties hereto shall be lodged with the Company
and the Bank.
8.09 Effectiveness. This Agreement shall become effective on the date (the
-------------
"Effective Date") on which each Credit Party and the Bank shall have executed
and delivered a counterpart hereof (whether the same or different
counterparts).
8.10 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
-20-
8.11 Amendment or Waiver; etc. Neither this Agreement nor any terms hereof may
------------------------
be changed, waived, discharged or terminated unless such change, waiver,
discharge or termination is in writing signed by each Credit Party and the Bank.
8.12 Survival. All indemnities set forth herein including, without limitation,
--------
in Section 1.04, 2.03 and 8.01, shall survive the execution and delivery of this
Agreement, the issuance of the Letter of Credit and the repayment of all
Obligations.
8.13 Confidentiality. (a) Subject to the provisions of clause (b) of this
---------------
Section 8.13, the Bank agrees that it will use its best efforts not to disclose
without the prior consent of the Company (other than to its employees, auditors,
counsel or other advisors, to affiliates or to another bank party to the Credit
Agreement if the Bank or the Bank's holding or parent company in its sole
discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of this
Section 8.13 to the same extent as the Bank) any information with respect to
any Credit Party or any of their respective Subsidiaries which is furnished
pursuant to this Agreement and which is designated by the Company to the Bank in
writing as confidential; provided, that the Bank may disclose any such
--------
information (a) as has become generally available to the public or has become
available to the Bank on a non-confidential basis, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
the Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to the
Bank, and (e) to any prospective participant in the Letter of Credit; provided,
--------
that such prospective participant agrees to provisions substantially identical
to those contained in this Section.
(b) Each Credit Party hereby acknowledges and agrees that the Bank may share
with any of its affiliates any information related to such Credit Party or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of such Credit Party and its
Subsidiaries), provided that such Persons shall be subject to the provisions of
this Section 8.13 to the same extent as the Bank.
8.14 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
--------------------
IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER L/C
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
-21-
SECTION 9. Guaranty.
---------
9.01 The Guaranty. In order to induce the Bank to enter into this Agreement
------------
and to extend credit hereunder and in recognition of the direct benefits to be
received by the Guarantor from the issuance of the Letter of Credit, the
Guarantor or hereby agrees with the Bank as follows: the Guarantor hereby
unconditionally and irrevocably guarantees as primary obligor and not merely as
surety the full and prompt payment when due, whether upon maturity, acceleration
or otherwise, of any and all of the Guaranteed Obligations of the Company to the
Bank. If any or all of the Guaranteed Obligations of the Company to the Bank
becomes due and payable hereunder, the Guarantor unconditionally promises to pay
such indebtedness to the Bank, or order, on demand, together with any and all
expenses which may be incurred by the Bank in collecting any of the Guaranteed
Obligations. If claim is ever made upon the Bank for repayment or recovery of
any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and the Bank repays all or part of said amount by reason
of (i) any judgment, decree or order of any court or administrative body having
jurisdiction over the Bank or any of its property or (ii) any settlement or
compromise of any such claim effected by the Banks with any such claimant
(including the Company), then and in such event the Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding upon the
Guarantor, notwithstanding any revocation of this Guaranty other instrument
evidencing any liability of the Company, and the Guarantor shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
9.02 Bankruptcy. Additionally, the Guarantor unconditionally and irrevocably
----------
guarantees the payment of any and all of the Guaranteed Obligations of the
Company to the Bank whether or not due or payable by the Company upon the
occurrence of any of the events specified in Section 10.05 of the Credit
Agreement (as in effect on the Effective Date), and unconditionally promises to
pay such indebtedness to the Bank, or order, on demand, in lawful money of the
United States.
9.03 Nature of Liability. The liability of the Guarantor hereunder is
-------------------
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Company whether executed by the Guarantor, any
other guarantor or by any other party, and the liability of the Guarantor
hereunder is not affected or impaired by (a) any direction as to application of
payment by the Company or by any other party, or (b) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations of the Company, or (c) any payment on or
in reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Company, or (e)
any payment made to the Bank on the Guaranteed Obligations which the Bank repays
to the Company pursuant to court order in any bankruptcy, reorganization,
arrangement,
-22-
moratorium or other debtor relief proceeding, and the Guarantor waives any right
to the deferral or modification of its obligations hereunder by reason of any
such proceeding.
9.04 Independent Obligation. The obligations of the Guarantor hereunder are
----------------------
independent of the obligations of any other guarantor, any other party or the
Company, and a separate action or actions may be brought and prosecuted against
the Guarantor whether or not action is brought against any other guarantor, any
other party or the Company and whether or not any other guarantor, any other
party or the Company be joined in any such action or actions. The Guarantor
waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Company or other circumstance which operates to toll any statute
of limitations as to the Company shall operate to toll the statute of
limitations as to the Guarantor.
9.05 Authorization. The Guarantor authorizes the Bank without notice or demand
-------------
(except as shall be required by applicable statute and cannot be waived), and
without affecting or impairing its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or extend
the time of payment of, renew, increase, accelerate or alter, any of the
Guaranteed Obligations (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed Obligations and
sell, exchange, release, surrender, realize upon or otherwise deal with in any
manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the Company or
others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the Company
or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Company to its creditors other than the Bank;
-23-
(f) apply any sums by whomsoever paid or howsoever realized to any liability
or liabilities of any Guarantor to the Bank regardless of what liability or
liabilities of the Guarantor or the Company remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default under,
this Agreement or any of the instruments or agreements referred to herein, or
otherwise amend, modify or supplement this Agreement or any of such other
instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable principles
of common law, give rise to a legal or equitable discharge of the Guarantor from
its liabilities under this Guaranty.
9.06 Reliance. It is not necessary for the Bank to inquire into the capacity
--------
or powers of the Company or the officers, directors, partners or agents acting
or purporting to act on their behalf, and any Guaranteed Obligations made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
9.07 Subordination. Any of the indebtedness of the Company relating to the
-------------
Guaranteed Obligations now or hereafter owing the Guarantor is hereby
subordinated to the Guaranteed Obligations of the Company owing to the Bank; and
if the Bank so requests at a time when an Event of Default exists to all such
indebtedness relating to the Guaranteed Obligations of the Company to the
Guarantor shall be collected, enforced and received by the Guarantor for the
benefit of the Bank and be paid over to the Bank on account of the Guaranteed
Obligations of the Company to the Bank, but without affecting or impairing in
any manner the liability of the Guarantor under the other provisions of this
Guaranty. Prior to the transfer by the Guarantor of any note or negotiable
instrument evidencing any of the indebtedness relating to the Guaranteed
Obligations of the Company to the Guarantor, the Guarantor shall xxxx such note
or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, the Guarantor
hereby agrees with the Bank that it will not exercise any right of subrogation
which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full in cash.
9.08 Waiver. (a) The Guarantor waives any right (except as shall be required
------
by applicable statute and cannot be waived) to require the Bank to (i) proceed
against the Company, any other guarantor or any other party, (ii) proceed
against or exhaust any security held from the Company, any other guarantor or
any other party or (iii) pursue any other remedy in the Bank's power whatsoever.
The Guarantor waives any defense based on or arising out of any defense of the
Company, any other guarantor or any other party, other than payment in full of
the Guaranteed Obligations, based on or arising out of the disability of the
Company, any other guarantor or any other party, or the
-24-
unenforceability; of the Guaranteed Obligations or any part thereof from any
cause, or the cessation from any cause of the liability of the Company other
than payment in full of the Guaranteed Obligations. The Bank may, at its
election, foreclose on any security held by the Bank by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Bank may have against the Company or any other
party, or any security, without affecting or impairing in any way the liability
of the Guarantor hereunder except to the extent the Guaranteed Obligations have
been paid. The Guarantor waives any defense arising out of any such election by
the Bank, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of the Guarantor
against the Company or any other party or any security.
(b) The Guarantor waives all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notices of
protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation or incurring of new or additional Guaranteed
Obligations. The Guarantor assumes all responsibility for being and keeping
itself informed of the Company's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which the Guarantor
assumes and incurs hereunder, and agrees that the Bank shall have no duty to
advise the Guarantor of information known to them regarding such circumstances
or risks.
9.09 Maximum Liability. It is the desire and intent of the Guarantor and the
-----------------
Bank that this Guaranty shall be enforced against the Guarantor to the fullest
extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of the Guarantor under this Guaranty shall be adjudicated
to be invalid or unenforceable for any reason (including, without limitation,
because of any applicable state or federal law relating to fraudulent
conveyances or transfers), then the amount of the Guaranteed Obligations of the
Guarantor shall be deemed to be reduced and the Guarantor shall pay the maximum
amount of the Guaranteed Obligations which would be permissible under applicable
law.
-25-
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
0000 Xxxx Xxxx Xxxx, Xxxxx 000 MK GROUP,INC.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
By /s/
with copies to: ---------------------
Title: Vice President
Xxxxxxxx X. Xxxxxxx
The Jordan Company
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxx X. Xxxxxxx
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxx Xxxx Xxxx, Xxxxx 000 MK HOLDINGS, INC.
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
By /s/
---------------------
with copies to: Title: Vice President
Xxxxxxxx X. Xxxxxxx
The Jordan Company
0 Xxxx 00xx Xxxxxx,00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xxxxx X. Xxxxxxx
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-26-
000 Xxxxxxx Xxxxxx BANKERS TRUST COMPANY
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx Xxxxx
Telephone: (000) 000-0000
Fascimile: (000) 000-0000
BY /s/
-------------------------
Title:
-27-
EXHIBIT A
---------
Irrevocable Standby Letter of Credit No. S-10675
Beneficiary:
Xxxx X. Xxxxx Revocable Trust Under Agreement Dated November 5, 1988 000
Xxxxxxxx Xxxx Xxxx Xxxxx, Xxxxxxxx 00000 Attention: Xxxx X. Xxxxx
Applicant:
MK Holdings, Inc.
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
Gentlemen:
We, Bankers Trust Company (the "Bank"), hereby establish in your favor, as
Beneficiary, our irrevocable Standby Letter of Credit No. S-10675 (the "Letter
of Credit") in an amount not to exceed in the aggregate U.S. DOLLARS Ninety-
Five Million Six Hundred Thousand **U.S. $95,600,000** (as such amount may be
reduced from time to time in accordance with the terms hereof, the "Stated
Amount") for the account of MK Holdings, Inc. (which shall be renamed "Xxxxxx-
Xxxxx Industries, Inc.") (the "Company ), available by payment against
presentation at our office as stipulated herein, of your draft drawn at sight on
ourselves and accompanied by:"
(a) If the drawing is being made with respect to a principal payment
under the Secured Note, dated September 22, 1995, issued by the Company to
the Beneficiary in an aggregate principal amount equal to S90,000,000 (the
"First Installment Note"), your drawing certificate in the form of Annex
I attached hereto appropriately completed and duly signed by the Trustee
(as hereinafter defined) of the Beneficiary; or
(b) If the drawing is being made with respect to a principal payment
under the Secured Note, dated September 22, 1995, issued by the Company to
the Beneficiary, in an aggregate principal amount equal to S5,600,000 (the
"Second Installment Note"; the First Installment Note and the Second
Installment Note each,
EXHIBIT A
Page 2
an "Installment Note" and collectively, the "Installment Notes"), your
drawing certificate in the form of Annex 11 attached hereto appropriately
completed and duly signed by the Trustee of the Beneficiary; or
(c) If the drawing is being made with respect to principal payments
under the Installment Notes following your receipt of a Notice of
Termination (as hereinafter defined), your drawing certificate in the form
of Annex III attached hereto appropriately completed and duly signed by the
Trustee of the Beneficiary.
If a drawing is received by the Bank at or prior to 11:00 A.M., New York City
time, on a Business Day (as hereinafter defined), and provided that such drawing
conforms to the terms and conditions hereof, payment of the drawing amount shall
be made to the Beneficiary in immediately available funds on the same Business
Day. If a drawing is received by the Bank after 11:00 A.M., New York City time,
on a Business Day, and provided that such drawing conforms to the terms and
conditions hereof, payment of the drawing amount shall be made to the
Beneficiary in immediately available funds on the next succeeding Business Day.
If a demand for payment made by you hereunder does not, in any instance,
conform to the terms and conditions of this Letter of Credit, the Bank shall
give you notice by the Business Day immediately following the date the draw
request is made that the demand for payment was not effected in accordance with
the terms and conditions of this Letter of Credit, stating the reasons therefor
and that the Bank will upon your instructions hold any documents at your
disposal or return the same to you. Upon being notified that the demand for
payment was not effected in conformity with this Letter of Credit, you may
attempt to correct any such non-conforming demand for payment to the extent that
you are entitled to do so.
Only two drawings may be made hereunder, and the amount of each drawing made
hereunder and honored by the Bank shall permanently reduce the Stated Amount
hereof by the amount of each such drawing. No demand for payment hereunder shall
exceed the Stated Amount of this Letter of Credit in effect at such time.
The Stated Amount of this Letter of Credit shall also be reduced from time to
time, upon receipt by the Bank of a reduction certificate in the form of Annex
IV attached hereto (a "Reduction Certificate"), appropriately completed and
signed by the Trustee of the Beneficiary, by the amount set forth in such
reduction certificate, effective on the date of its receipt by the Bank. It is
agreed that the Beneficiary will notify the Bank
EXHIBIT A
Page 3
of a cancellation, termination, reduction or expiration of any Installment Note
by delivering a Reduction Certificate.
The Stated Amount of this Letter of Credit shall be reduced to zero and this
Letter of Credit shall automatically terminate and be delivered to us for
cancellation on the earliest of (i) the making by you of the final drawing
available to be made hereunder, (ii) receipt by us of a certificate of the
Trustee of the Beneficiary stating that both Installment Notes have been
cancelled in accordance with their respective terms and no principal amounts are
owing by the Company thereunder, (iii) the close of business on the Stated
Expiry Date, and (iv) if we have given you written notice (any such notice,
which shall be in the form of Annex V hereto, a "Notice of Termination") that an
Event of Default has occurred under the Letter of Credit Agreement, dated as of
September 22, 1995, among MK Group, Inc., the Company and the Bank, as amended,
modified, supplemented or replaced from time to time without your consent (the
"Letter of Credit Agreement"), and that this Letter of Credit will terminate, at
the close of business on the Business Day occurring thirty days after the
Business Day upon which we have so notified you. Following receipt of a Notice
of Termination from us pursuant to the preceding clause (iv) that the Letter of
Credit will terminate prior to the Stated Expiry Date, you shall bc entitled to
draw hereunder an amount equal to the lesser of (x) the Stated Amount of the
Letter of Credit as in effect on the date of drawing, and (b) the aggregate
principal amount outstanding under the Installment Notes on the date of drawing.
This Letter of Credit applies only to obligations of the Company to you in
respect of unpaid principal under the Installment Notes to make such principal
payments on the terms set forth therein.
As used herein (a) "Trustee" shall mean Xxxx X. Xxxxx or any successor trustee
of the Beneficiary, (b) "Stated Expiry Date" shall mean December 31, 1996, and
(c) "Business Day" shall mean any day except Saturday, Sunday and any other day
on which banking institutions located in the City of New York, New York and
Chicago, Illinois are required or authorized to close.
Drafts must be presented to Bankers Trust Company at its office located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Commercial Loan Division,
Standby Letter of Credit Unit, not later than the Stated Expiry Date.
Drafts must be marked "Drawn under Bankers Trust Company Letter of Credit No.
S-10675".
EXHIBIT A
Page 4
Your draft and drawing certificate may be delivered to the Bank by facsimile
transmission (Fax No: (000) 00X-0000 Attention: Standby Commercial Loan
Division, Letter of Credit Unit). Any fax transmission pursuant to which a
drawing is made or reduction is notified hereunder, shall be promptly confirmed
in writing to the Bank.
If so requested by the Beneficiary, payment under this Letter of Credit may be
made by wire transfer in accordance with the payment instructions submitted with
the Beneficiary's draft and drawing certificate.
Only you may make a drawings under this Letter of Credit. Upon the payment to
you or to your account or accounts of the amount of the drawing demanded
hereunder, we shall be fully discharged of our obligation under this Letter of
Credit in respect of such drawing and we shall not thereafter be obligated to
make any further payments under this Letter of Credit in respect of any demand
for payments to you or any other person. By paying to you the amount of the
drawings demanded in accordance herewith, we make no representation as to the
correctness of the amount demanded.
This Letter of Credit sets forth in full the terms of our undertaking and
such undertaking shall not in any way be modified, amended or amplified or
limited by reason of our reference to any document, agreement or instrument
referred to herein or in which this Letter of Credit is referred to except the
Annexes referred to herein; and any such reference shall not be deemed to
incorporate herein by reference any document, agreement or instrument except for
such Annexes.
This Letter of Credit may not be transferred or assigned, either in whole or
in part.
We hereby agree with you that drafts drawn under and in compliance with the
terms and conditions of this Letter of Credit shall be duly honored on due
presentation to the Bank as set forth above.
Communications to us with respect to this Letter of Credit must be in writing
and shall be addressed to us at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Commercial Loan Division, Standby Letter of Credit Unit,
specifically referring thereon to this Letter of Credit by number.
This Letter of Credit is issued subject to the Uniform Customs and Practice
for Documentary Credits (1993 Revision) ICC Publication No. 500 (the "Uniform
Customs"). This Letter of Credit shall be deemed to be a contract made
EXHIBIT A
Page 5
under the laws of the State of New York and shall, as to matters not governed by
the Uniform Customs, be governed by and construed in accordance with the laws of
the State of New York including, without limitation, Article 5 of the Uniform
Commercial Code as in effect in the State of New York.
Very truly yours,
BANKERS TRUST COMPANY
By:
----------------------
Title
ANNEX I
-------
FORM OF FIRST INSTALLMENT NOTE DRAWING CERTIFICATE
--------------------------------------------------
To: Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Commercial Loan Division, Standby Letter of Credit Unit
Re: Irrevocable Standby Letter of Credit No. S-10675.
Gentlemen:
The undersigned, the Trustee of the Xxxx X. Xxxxx Revocable Trust Under
Agreement Dated November 5, 1988 (the "Beneficiary") hereby certifies to Bankers
Trust Company (the "Bank") with respect to the above-referenced standby letter
of credit (the "Letter of Credit," the terms defined therein and not otherwise
defined herein being used herein as therein defined) in favor of the
Beneficiary, that:
The Beneficiary is making a drawing under the Letter of Credit in an
amount of USD , which amount represents the unpaid principal of the
---------
First Installment Note, dated September 22, 1995, issued by the Company to
the Beneficiary in an initial aggregate principal amount equal to
$90,000,000, which principal is due and payable in accordance with the
terms of the First Installment Note. Payment of the amount being drawn
hereunder was demanded of the Company on and has not yet been
----------
paid. The amount demanded hereby does not on the date hereof, and will not
on the date payment hereunder is required to be made, exceed the Stated
Amount of the Letter of Credit.
Upon its receipt of the amount demanded under the Letter of Credit,
the Beneficiary will apply all of such amounts directly to the payment of
the outstanding principal of the First Installment Note.
Payment of this drawing is required to be made in immediately available funds
by wire transfer to the Beneficiary in accordance with the following payment
instructions.
[Insert Payment Instructions]
ANNEX I
Page 2
IN WITNESS WHEREOF, the Beneficiary has executed and delivered this
certificate as of the day of , 199 .
--------- ------------ -
Very truly yours,
XXXX X. XXXXX REVOCABLE
TRUST UNDER AGREEMENT DATED
NOVEMBER 5, 1988
By:
-----------------------------------
Name:
Title:
ANNEX II
FORM OF SECOND INSTALLMENT NOTE DRAWING CERTIFICATE
---------------------------------------------------
To: Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Commercial Loan Division, Standby Letter of Credit Unit
Re: Irrevocable Standby Letter of Credit No. S-10675.
Gentlemen:
The undersigned, the Trustee of the Xxxx X. Xxxxx Revocable Trust Under
Agreement Dated November 5, 1988 (the "Beneficiary") hereby certifies to Bankers
Trust Company (the "Bank") with respect to the above-referenced standby letter
of credit (the "Letter of Credit," the terms defined therein and not otherwise
defined herein being used herein as therein defined) in favor of the
Beneficiary, that:
The Beneficiary is making a drawing under the Letter of Credit in an
amount of USD , which amount represents the unpaid principal of
the Second Installment Note, dated September 22, 1995, issued by the
Company to the Beneficiary in an aggregate principal amount equal to
$5,600,000, which principal is due and payable in accordance with the terms
of the Second Installment Note. Payment of the amount being drawn
hereunder was demanded of the Company on and has not yet been
paid. The amount demanded hereby does not on the date hereof, and will not
on the date payment hereunder is required to be made, exceed the Stated
Amount of the Letter of Credit.
Upon its receipt of the amount demanded under the Letter of Credit,
the Beneficiary will apply all of such amounts directly to the payment of
the outstanding principal of the Second Installment Note.
Payment of this drawing is required to be made in immediately available funds
by wire transfer to the Beneficiary in accordance with the following payment
instructions.
[Insert Payment Instructions]
---------------------------
ANNEX II
Page 2
IN WITNESS WHEREOF, the Beneficiary has executed and delivered this
certificate as of the day of , 19 .
---------- --------------- -
Very truly yours,
XXXX X. XXXXX REVOCABLE
TRUST UNDER AGREEMENT DATED
NOVEMBER 5, 1988
By:
---------------------------
Name:
Title:
ANNEX III
---------
FORM OF TERMINATION DRAWING CERTIFICATE
---------------------------------------
To: Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Commercial Loan Division, Standby Letter of Credit Unit
Re: Irrevocable Standby Letter of Credit No. S-10675.
Gentlemen:
The undersigned, the Trustee of the Xxxx X. Xxxxx Revocable Trust Under
Agreement Dated November 5, 1988 (the "Beneficiary") hereby certifies to Bankers
Trust Company (the "Bank") with respect to the above-referenced standby letter
of credit (the "Letter of Credit," the terms defined therein and not otherwise
defined herein being used herein as therein defined) in favor of the
Beneficiary, that:
The Beneficiary has received written notice from the Bank that an
Event of Default has occurred under the Letter of Credit Agreement and that
the Letter of Credit is to be terminated prior to the Stated Expiry Date
and is making a drawing under the Letter of Credit in the amount of
USD__________, which amount is the lesser of (x) the Stated Amount of the
Letter of Credit as in effect on the date hereof and (y) the aggregate
principal amount outstanding under the Installment Notes, dated September
22, 1995, issued by the Company to the Beneficiary on the date hereof.
Upon receipt of the amount demanded under the Letter of Credit, the
Beneficiary will apply all of such amount directly to the payment of the
outstanding principal of the Installment Notes.
Payment of this drawing is required to be made in immediately available funds
by wire transfer to the Beneficiary in accordance with the following payment
instructions.
[Insert Payment Instructions]
---------------------------
ANNEX III
Page 2
IN WITNESS WHEREOF, the Beneficiary has executed and delivered this
certificate as of the day of , 19 .
------------ ---------- --
Very truly yours,
XXXX X. XXXXX REVOCABLE
TRUST UNDER AGREEMENT DATED
NOVEMBER 5, 1988
By:
-------------------------------
Name:
Title:
ANNEX IV
--------
FORM OF REDUCTION CERTIFICATE
-----------------------------
To: Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Commercial Loan Division, Standby Letter of Credit Unit
Re: Irrevocable Standby Letter of Credit No. S-10675.
Gentlemen:
The undersigned, the Trustee of the Xxxx X. Xxxxx Revocable Trust Under
Agreement Dated November 5, 1988 (the "Beneficiary") hereby certifies to Bankers
Trust Company (the "Bank") with respect to the above-referenced standby letter
of credit (the "Letter of Credit," the terms defined therein and not otherwise
defined herein being used herein as therein defined) in favor of the
Beneficiary, that the principal amount of the [First] [Second] Installment Note
has been reduced by $ .
-----------------------------
The Bank is hereby instructed and authorized to reduce the Stated Amount of
the Letter of Credit by the amount set forth in the preceding paragraph without
a drawing under the Letter of Credit.
IN WITNESS WHEREOF, the Beneficiary has executed and delivered this
certificate as of the day of , 19 .
------- ----------
Very truly yours,
XXXX X. XXXXX REVOCABLE
TRUST UNDER AGREEMENT DATED
NOVEMBER 5, 1988
By:
--------------------
Name:
Title:
ANNEX V
FORM OF NOTICE OF TERMINATION OF LETTER OF CREDIT
-------------------------------------------------
[Date]
Xxxx X. Xxxxx Revocable Trust
Under Agreement Dated November 5, 1988
000 Xxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Gentlemen:
Reference is made to Irrevocable Standby Letter of Credit No. S-10675 (the
"Letter of Credit"), dated September 22, 1995, issued by us in your favor, as
Beneficiary. Unless otherwise defined herein, all capitalized terms used herein
which are defined in the Letter of Credit shall have the respective meaning
provided therein.
This constitutes our notice to you pursuant to the Letter of Credit that (i)
an Event of Default under, and as defined in, the Letter of Credit Agreement has
occurred and (ii) the Letter of Credit shall terminate on , 19 ./l/
Very truly yours,
BANKERS TRUST COMPANY
By
---------------------------
Title:
cc: Xxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Wildman, Harrold, Xxxxx & Xxxxx
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
----------
Insert the date which is thirty (30) days after the date hereof.
EXHIBIT B
---------
FORM OF LETTER OF CREDIT REQUEST
--------------------------------
No. 1 Dated (l)
-------------
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Pursuant to Section 1.02 of the Letter of Credit Agreement, we hereby request
that Bankers Trust Company issue the Letter of Credit for the account of the
undersigned on (2) (the "Date of Issuance") in the form of Exhibit A to the
--------
Letter of Credit Agreement (as hereafter defined).
For purposes of this Letter of Credit Request, unless otherwise defined
herein, all capitalized terms used herein which are defined in the Letter of
Credit Agreement, dated as of September 22, 1995, among MK Group, Inc., MK
Holdings, Inc. (which shall be renamed "Xxxxxx-Xxxxx Industries, Inc."), and
Bankers Trust Company (as amended, modified or supplemented from time to time,
the "Letter of Credit Agreement") shall have the respective meaning provided
therein.
We hereby certify that:
(1) each of the conditions precedent set forth in Section 3 of the Letter of
Credit Agreement will be satisfied prior to the issuance of the Letter of
Credit.
(2) the representations and warranties contained in the Letter of Credit
Agreement and the other L/C Documents are and will be true and correct in all
material respects on the Date of Issuance, both before and after giving effect
to the issuance of the Letter of Credit requested hereby (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date); and
----------
(1) Date of Letter of Credit Request.
(2) Date of Issuance.
EXHIBIT B
Page 2
(3) no Default or Event of Default has occurred and is continuing after
giving effect to the issuance of the Letter of Credit requested hereby, would
such a Default or Event of Default occur.
Copies of all documentation with respect to the supported transaction are
attached hereto.
MK HOLDINGS, INC.
By
--------------------------
Title
EXHIBIT C
---------
FORM OF OPINION OF XXXXX, XXXXX & XXXXX
---------------------------------------
[Date]
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as counsel to MK Group, Inc., an Illinois corporation (the
"Guarantor"), and MK Holdings, Inc., an Illinois corporation which will be
merged with Xxxxxx-Xxxxx, Industries, Inc., Mercury Industries, Inc. and Elmco
Industries, Inc. and shall be the surviving corporation of such mergers and
shall be renamed "Xxxxxx-Xxxxx Industries, Inc." immediately thereafter the
"Company", and together with the Guarantor, collectively, the "Credit Parties"),
in connection with the execution and delivery of (i) the Letter of Credit
Agreement, dated as of September 22, 1995 (the "Agreement"), among the
Guarantor, the Company and Bankers Trust Company (the "Bank") and (ii) the
Letter of Credit Cash Collateral Agreement, dated as of September 22, 1995,
between the Company and the Bank (the "Cash Collateral Agreement"). This
opinion is delivered to you pursuant to Section 3.03 of the Agreement. Unless
otherwise indicated, capitalized terms used herein but not otherwise defined
herein shall have the respective meanings set forth in the Agreement.
In connection with this opinion, we have examined the Agreement and the Cash
Collateral Agreement, as well as originals or copies, certified or otherwise
identified to our satisfaction, of such public and corporate documents and
records and have made such examination of law as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
As to questions of fact not independently verified by us, we have relied, to
the extent we deemed appropriate, upon representations and certificates of
officers of the Credit Parties, public officials and other appropriate persons.
EXHIBIT C
Page 2
The opinions expressed herein are limited to matters governed by the internal
laws of New York and Illinois and the federal law of the United States of
America.
Based upon the foregoing and subject to the additional qualifications set
forth below, we are of the opinion that:
1. Each Credit Party (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its incorporation, (ii)
has the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to engage
and (iii) is duly qualified and is authorized to do business and is in good
standing in all jurisdictions where it is required to be so qualified, except
where failure to be so qualified, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
2. Each Credit Party has the corporate power and authority to execute, deliver
and perform the terms and provisions of each of the L/C Documents to which it
is a party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each of such L/C Documents. Each
Credit Party has duly executed and delivered each of the L/C Documents to which
it is a party, and each of such L/C Documents constitutes the legal, valid and
binding obligation of each such Credit Party, enforceable against each such
Credit Party in accordance with its terms, except to the extent that the
foregoing may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
3. Neither the execution, delivery or performance by any Credit Party of the
L/C Documents to which it is a party, nor compliance by it with the terms and
provisions thereof, nor the consummation of the transactions contemplated
therein, (i) will contravene any applicable provision of any law, statute, rule
or regulation (including, without limitation, Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System) or any order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will conflict or
be inconsistent with or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Cash Collateral Agreement) upon any of the property or
assets of any Credit Party or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement or instrument to which any Credit Party or any of its
Subsidiaries is a party or by which it or any of its property or
EXHIBIT C
Page 3
assets are bound or to which it may be subject or (iii) will violate any
provision of the certificate of incorporation or by-laws of any Credit Party or
any of its Subsidiaries.
4. No order, consent, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, any governmental or
public body or authority, or any subdivision thereof, or any other third party,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of any L/C Document or (ii) the legality, validity,
binding effect or enforceability of any such L/C Document.
5. There are no actions, suits or proceedings pending or threatened (i) with
respect to any L/C Document or (ii) that could reasonably be expected to have
(a) a Material Adverse Effect or (b) a material adverse effect on the rights or
remedies of the Bank or on the ability of any Credit Party to perform its
obligations to the Bank under the L/C Documents to which it is a party.
Additionally, there does not exist any judgment, order or injunction
prohibiting or imposing material adverse conditions upon the issuance of the
Letter of Credit.
6. No Credit Party is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
7. No Credit Party is a "holding company", or a subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
This opinion is being furnished only to the addressee and is solely for its
benefit and the benefit of its participants and assigns in connection with the
above transaction. This opinion may not be relied upon for any other purpose, or
relied upon by any other person, firm or corporation for any purpose, without
our prior written consent.
Very truly yours,
EXHIBIT D
---------
FORM OF OFFICERS' CERTIFICATE
-----------------------------
I, the undersigned, [President/Vice President] of [Name of Credit Party], a
corporation organized and existing under the laws of the State of Illinois (the
"Company"), do hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to the Letter of Credit Agreement,
dated as of September 22, 1995, between MK Group, Inc., MK Holdings, Inc., and
Bankers Trust Company (such Letter of Credit Agreement, as in effect on the date
of this Certificate, being herein called the "Letter of Credit Agreement").
Unless otherwise defined herein, capitalized terms used in this Certificate
shall have the meanings set forth in the Letter of Credit Agreement.
2. The following named individuals are elected officers of the Company, each
holds the office of the Company set forth opposite his name and has held such
office since , 19 ./l/ The signature written opposite the name and
----------- --
title of each such officer is his genuine signature.
Name/2/ Office Signature
------------------ ------------------ ------------------
------------------ ------------------ ------------------
------------------ ------------------ ------------------
3. Attached hereto as Exhibit A is a certified copy of the Certificate of
Incorporation of the Company, as filed in the Office of the Secretary of State
of the State of Illinois on , 19 , together with all amendments
------------ --
thereto adopted through The date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of the By-Laws of
the Company which were duly adopted, are in full force and effect on the date
hereof, and have been in effect since , 19 .
----------- --
5. Attached hereto as Exhibit C is a true and correct copy of resolutions
which were duly adopted on , 19 [by unanimous written consent of the
----------- --
Board of Directors of the Company [by a meeting of the Board of Directors of the
Company at
/1/ Insert a date prior to the time of any corporate action relating to the L/C
Documents or related documentation.
/2/ Include name, office and signature of the officer who will sign any L/C
Document on behalf of the Company, including the officer who will sign the
certification at the end of this Certificate or related documentation.
EXHIBIT D
Page 2
which a quorum was present and acting throughout], and said resolutions have not
been rescinded, amended or modified. Except as attached hereto as Exhibit C, no
resolutions have been adopted by the Board of Directors of the Company which
deal with the execution, delivery or performance of any of the L/C Documents to
which the Company is party.
6. On the date hereof, the representations and warranties contained in the
Letter of Credit Agreement and in the other L/C Documents are true and correct
in all material respects with the same effect as though such representations and
warranties had been made on the date hereof, both before and after giving effect
to the issuance of the Letter of Credit on the date hereof, unless stated to
relate to a specific earlier date, in which case such representations and
warranties were true and correct in all material respects as of such earlier
date.
7. On the date hereof, no Default or Event of Default has occurred and is
continuing or would result from the issuance of the Letter of Credit.
8. There is no proceeding for the dissolution or liquidation of the Company or
threatening its existence.
1N WITNESS WHEREOF, I have hereunto set my hand this day of September, 1995.
----
[NAME OF CREDIT PARTY]
-------------------------
Name:
Title:
EXHIBIT D
Page 3
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly elected and
qualified [President/Vice President] of the Company and the signature above is
his genuine signature.
2. The certifications made by [Name of Person making above certifications] on
behalf of the Company in Items 2, 3, 4, 5 and 8 above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
------------
September, 1995.
[NAME OF CREDIT PARTY]
-------------------------------
Name:
Title:
EXHIBIT E
---------
FORM OF
LETTER OF CREDIT
CASH COLLATERAL AGREEMENT
-------------------------
LETTER OF CREDIT CASH COLLATERAL AGREEMENT (as amended, modified or
supplemented from time to time, this "Agreement"), dated as of September 22,
1995, between MK HOLDINGS, INC. (which shall be renamed "Xxxxxx-Xxxxx
Industries, Inc."), an Illinois corporation (the "Assignor"), and BANKERS TRUST
COMPANY, a New York banking corporation (the "Bank") in connection with the
Letter of Credit Agreement hereinafter referred to. Except as otherwise defined
herein, terms used herein and defined in the Letter of Credit Agreement shall
be used herein as so defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, MK Group, Inc., the Assignor and the Bank have entered into a Letter
of Credit Agreement, dated as of September 22, 1995 (as the same may be amended,
modified or supplemented from time to time, the "Letter of Credit Agreement"),
providing for the issuance of the Letter of Credit as contemplated therein;
WHEREAS, the Assignor desires to have the Letter of Credit issued for its
account pursuant to the Letter of Credit Agreement;
WHEREAS, it is a condition to the issuance of the Letter of Credit that the
Assignor shall have executed and delivered to the Bank this Agreement and shall
have made the deposit in the Cash Collateral Account as required hereby, and
WHEREAS, the Assignor desires to execute this Agreement in order to satisfy
the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the extension of credit to be made to the
Assignor and the other benefits accruing to the Assignor, the receipt and
sufficiency of which are hereby acknowledged, the Assignor hereby makes the
following representations and warranties to the Bank and hereby covenants and
agrees with the Bank as follows:
EXHIBIT E
Page 2
SECTION 1. PLEDGE AND GRANT OF SECURITY INTEREST.
1.01. Obligations Secured. This Agreement is made for the benefit of the Bank
-------------------
to secure the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of (i) all reimbursement obligations and Unpaid
Drawings with respect to the Letter of Credit issued under the Letter of Credit
Agreement and all Letter of Credit Fees and other Fees with respect thereto
(including, in each case, all interest thereon), (ii) all other obligations and
indebtedness (including, without limitation, indemnities, other fees and
interest thereon) of the Assignor, whether now existing or hereinafter incurred,
direct or indirect, absolute or contingent, secured or unsecured, matured or
unmatured, under, arising out of, or in connection with, the Letter of Credit
Agreement or the obligations described in the preceding clause (i) and the due
performance and compliance with the terms of the Letter of Credit Agreement by
the Assignor, (iii) any and all sums advanced by the Bank in order to preserve
the Collateral (as hereinafter defined) or preserve its security interest in the
Collateral, (iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of the Assignor
referred to in clauses (i) or (ii) above, after an Event of Default shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, or of any exercise by the Collateral Agent of its rights
hereunder, together with reasonable attorneys' fees and court costs and (v) all
amounts paid by any Indemnitee (as hereinafter defined) as to which such
Indemnitee has the right to reimbursement under Section 10 of this Agreement
(all such obligations, liabilities, sums and expenses referred to in clauses (i)
through (v) above are hereinafter called the "Obligations").
1.02. Pledge and Grant of Security Interest. As collateral security for the
--------------------------------------
Obligations, the Assignor hereby pledges and assigns to the Bank, a continuing
possessory lien and security interest in all of the right, title and interest of
the Assignor in and to the Cash Collateral Account (as defined below), in all
funds deposited therein, in all investments from time to time therein, and in
all cash and non-cash proceeds of any of the foregoing (collectively, the
"Collateral"), from the date of the establishment of the Cash Collateral Account
until the termination thereof pursuant to the terms hereof.
SECTION 2. ESTABLISHMENT OF CASH COLLATERAL ACCOUNT; ETC.
2.01. Establishment. The Bank has established in its own name and for its own
-------------
benefit an account (Account No. 18181 (the "Cash Collateral Account")) for
purposes
EXHIBIT E
Page 3
of this Agreement, which Cash Collateral Account is maintained at the Bank's
office located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. Subject to the
provisions of this Agreement, the Cash Collateral Account shall be under the
sole dominion and control of the Bank and the Bank shall have the sole right to
make withdrawals from the Cash Collateral Account and to exercise all rights
with respect to the Collateral from time to time therein. All Collateral
delivered to or held by or on behalf of the Bank pursuant hereto shall be held
in the Cash Collateral Account in accordance with the provisions hereof.
2.02. Deposit to the Cash Collateral Account. Prior to the issuance of the
--------------------------------------
Letter of Credit, the Assignor shall deposit into the Cash Collateral Account an
amount of cash equal to $95,600,000.
2.03. Investment of Funds Deposited in the Cash Collateral Account. Until the
-------------------------------------------------------------
date on which all amounts have been withdrawn from the Cash Collateral Account,
and so long as no Default or Event of Default is in existence, the Bank will
from time to time, at the request of the Assignor, invest funds on deposit in
the Cash Collateral Account in Cash Equivalents (as hereinafter defined). All
investments made pursuant to this Section 2.03 (and any instruments evidencing
same), and all proceeds thereof, shall be held in the Cash Collateral Account as
part of the Collateral. All such investments shall be made in the name of the
Bank. All risk of loss in respect of investments made pursuant to this Section
2.03 shall be on the Assignor. Under no circumstances shall the Bank be liable
or accountable to the Assignor or any other Person for any decrease in the value
of the Cash Collateral Account, or for any loss resulting from the sale of any
investment so made. For purposes of this Agreement "Cash Equivalents" shall mean
(i) securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
--------
and credit of the United States is pledged in support thereof) having maturities
of not more than three months from the date of acquisition thereof, (ii) time
deposits and certificates of deposit of the Bank with maturities of not more
than three months from the date of acquisition thereof, (iii) commercial paper
issued by the Bank maturing not more than three months after the date
of acquisition thereof, (iv) the Bankers Trust Company Institutional Cash
Management Fund and (v) the Bankers Trust Institutional Treasury Money Fund.
SECTION 3. WITHDRAWALS, APPLICATIONS AND REMEDIES.
3.01. Withdrawals. (a) Subject to Section 3.01(b), the Assignor shall have no
-----------
right to withdraw any Collateral from the Cash Collateral Account, and such
Collateral
EXHIBIT E
Page 4
shall remain in the Cash Collateral Account until applied by the Bank pursuant
to Section 3.02 hereof, or until released in accordance with Section 11 hereof.
(b) Without in any way limiting the Bank's ownership of the Cash Collateral
Account, on any Business Day prior to the Termination Date (as hereinafter
defined), following the delivery by the Chief Executive, the President, Chief
Financial Officer, any Vice-President or Treasurer (each, an "Authorized
Officer") of the Assignor to the Bank, not later than 12:00 Noon (New York time)
on the preceding Business Day, of a certificate stating that (i)) no Default or
Event of Default then exists, (ii) interest is due and owing under an
Installment Note on the next succeeding Business Day and certifying the amount
thereof, and (iii) the amount of cash and Cash Equivalents held in the Cash
Collateral Account exceeds the sum of (x) the Stated Amount of the Letter of
Credit at such time, (y) the amount of all Unpaid Drawings at such time and (z)
the amount of due and unpaid Letter of Credit Fees and other Fees that have
accrued on the Letter of Credit through the date of the proposed release of
funds, the Bank, so long as no Default or Event of Default then exists and so
long as the Bank does not believe in good faith that such certificate is
inaccurate, will release (without recourse and without any representation or
warranty) an amount of cash from the Cash Collateral Account equal to such
excess to the Assignor.
(c) Without in any way limiting the Bank's ownership of the Cash Collateral
Account, on any Business Day prior to the Termination Date, following the
delivery by an Authorized Officer of the Assignor to the Bank, not later than
12:00 Noon (New York time) on the preceding Business Day or following drawing
under the Letter of Credit effecting a reduction in the Stated Amount of the
Letter of Credit on the preceding Business Day which has been reimbursed to the
Bank other than from proceeds of the Cash Collateral Account, the Bank will
release to the Assignor (without recourse and without any representation or
warranty) an amount of cash from the Cash Collateral Account equal to such
access of (i) the amount of cash and Cash Equivalents held in the Cash
Collateral Account exceeds (ii) the sum of (x) the Stated Amount of the
Letter of Credit as so reduced, (y) the amount of all Unpaid Drawings at such
time and (z) the amount of due and unpaid Letter of Credit Fees and other Fees
that have accrued on the Letter of Credit through the date of the proposed
release of funds.
(d) Notwithstanding anything to the contrary contained in preceding Section
3.01(b), all Collateral in the Cash Collateral Account shall be subject, at any
time when an Event of Default shall have occurred and be continuing, to any
prior application required by Section, 3.02 hereof.
EXHIBIT E
Page 5
3.02. Remedies upon an Event of Default; Application of Proceeds. If an Event
-----------------------------------------------------------
of Default: shall occur and be continuing:
(a) The Bank may, subject to any mandatory requirements of applicable law, (i)
exercise in respect of all of the Collateral in addition to other rights and
remedies provided for herein or otherwise available to it under applicable law,
all of the rights and remedies of a secured party on default under the Uniform
Commercial Code then in effect in the State of New York, (ii) withdraw any
Collateral from the Cash Collateral Account, and (iii) without notice except as
specified below, sell or liquidate any or all of the non-cash Collateral in one
or more parcels at any public or private sale, at any exchange, broker's board
or at any of the Bank's offices or elsewhere, for cash, on credit or for future
delivery, at such price or prices and upon such other terms as the Bank may
deem commercially reasonable. The Assignor agrees that, to the extent notice of
sale shall be required by law, at least 10 days' written notice to the Assignor
of the time and place of any public sale or the time after, which any private
sale or other disposition is to be made shall constitute reasonable
notification. The Bank shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Bank may adjourn any public
or private sale from time to time (by announcement, in the case of any public
sale, at the time and place fixed therefore), and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) All cash proceeds received by the Bank in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral
shall be applied to the payment of the Obligations as follows:
(i) first, to the payment of all amounts owing the Bank of the type described
in clauses (iii), (iv) and (v) of the definition of "Obligations" set forth in
Section 1.01 of this Agreement;
(ii) second, to the extent proceeds remain after the application pursuant to
the preceding clause (i), to the payment of those Obligations described in
clauses (i) and (ii) of the definition of "Obligations" set forth in Section
1.01 of this Agreement; and
(iii) third, to the extent proceeds remain after the application pursuant to
the preceding clauses (i) and (ii)), and following the termination of this
Agreement pursuant to Section 11 hereof, to the Assignor or to whomever may be
lawfully entitled to receive such surplus.
EXHIBIT E
Page 6
(c) It is understood that the Assignor shall remain liable to the extent
of any deficiency between the amount of the proceeds of the Collateral applied
as provided in preceding clause (b) and the aggregate amount of the Obligations.
SECTION 4. FURTHER ASSURANCES.
The Assignor agrees that it will, at any time and from time to time at its
expense, promptly execute and deliver all further agreements, instruments and
other documents and take all further action that may be necessary or that the
Bank may reasonably request in order to perfect and protect the security
interest purported to be created hereby or otherwise to enable the Bank to
exercise and enforce its rights and remedies hereunder.
SECTION 5. TRANSFERS AND OTHER LIENS.
The Assignor agrees that it will not (i) sell, assign (by operation of law or
otherwise) or otherwise dispose of any interest hereunder or that the Assignor
may purport to have in respect of the Collateral or (ii) create or suffer to
exist any Lien upon or with respect to any Collateral (except for the security
interest purported to be created hereby).
SECTION 6. ATTORNEY-IN-FACT.
The Assignor hereby irrevocably appoints the Bank its attorney-in-fact, with
full authority after the occurrence of and during the continuance of an Event of
Default, in the place and stead of the Assignor and in the name of the Assignor
or otherwise, from time to time in the Bank's discretion to execute any
instrument and to take any other action which the Bank may deem necessary or
advisable to accomplish the purposes of this Agreement or to facilitate the
assignment or other transfer by the Bank of any or all of its rights hereunder,
including, without limitation, (i) to receive, endorse and collect all
instruments made payable to the Assignor and representing any interest payment
or other distribution in respect of the Collateral and to give full discharge
for the same, and (ii) to execute and deliver any and all instruments and other
documents that the Bank may request in connection with the exercise by the Bank
of any or all of its rights hereunder.
EXHIBIT E
Page 7
SECTION 7. PERFORMANCE BY THE BANK
If the Assignor fails to perform any agreement or obligation contained herein,
the Bank itself may perform or cause performance of such agreement or
obligation, and the expenses of the Bank incurred in connection therewith shall
be payable to the Bank by the Assignor.
SECTION 8. RESPONSIBILITY OF THE BANK
Neither the Bank nor any of its directors, officers, agents, employees,
affiliates, representatives and agents shall be liable (i) for any failure to
invest or reinvest any cash in the (Cash Collateral Account in accordance
herewith, provided that such Person shall be liable for its gross negligence or
--------
willful misconduct, (ii) or for any losses incurred by reason of investments
made by the Bank pursuant to Section 2.03 hereof or (iii) for any action taken
or omitted to be taken by the Bank (x) in good faith in accordance with the
advice of counsel with respect to any question as to the construction of any
provision hereof or any action to be taken by the Bank hereunder or (y) in
accordance with any instructions or other notice which the Bank believes in good
faith to be properly given by the assignor hereunder.
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ASSIGNOR.
The Assignor represents and warrants that (a) on the date of the deposit of
any Collateral in the Cash Collateral Account, it will be the legal, record and
beneficial owner of, and will have good and marketable title to, the Collateral
subject to no pledge, lien, mortgage, hypothecation, security interest, charge,
option or other encumbrance whatsoever, except the liens and security interests
created by this Agreement; (b) it has full corporate power, authority and legal
right to pledge all the Collateral pledged by it pursuant to this Agreement; (c)
this Agreement has been duly authorized, executed and delivered by the Assignor
and constitutes a legal, valid and binding obligation of the Assignor
enforceable in accordance with its terms, except to the extent that the
enforceability hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law); (d) the pledge, assignment and granting of a security
interest in the Cash Collateral Account pursuant to this Agreement creates, and
upon the deposit in the Cash Collateral Account of any other Collateral
pursuant to this Agreement will create, a valid and perfected first security
interest in all of the Assignor's
EXHIBIT E
Page 8
right, title and interest in and to the Cash Collateral Account and the
Collateral so deposited, as the case may be, and the proceeds thereof subject to
no prior lien or encumbrance or to any agreement purporting to grant any third
party lien or encumbrance on property or assets of the Assignor which would
include the Collateral, and no UCC or other filings are required to be made in
connection with the foregoing or to perfect the security interests created
hereby: (e) no consent of any other party (including, without limitation, any
stockholder or creditor of the Assignor or any of its Subsidiaries) and no
consent, license, permit, approval or authorization of, exemption by, notice or
report to, or registration, filing or declaration with (except, in each case, as
have been obtained or made on or prior to the Effective Date), any governmental
authority is required to be obtained in connection with the execution, delivery
or performance of this Agreement; and (f) the execution, delivery and
performance of this Agreement will not violate any provision of any applicable
law or regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign or of the certificate
of incorporation or by-laws of the Assignor or any of its Subsidiaries or of any
securities issued by the Assignor or any of its Subsidiaries, or of any
indenture, mortgage, deed of trust, lease, credit agreement or loan agreement,
or any other agreement, contract or other instrument to which the Assignor or
any of its Subsidiaries is a party or which purports to be binding upon the
Assignor or any of its Subsidiaries or upon any of their respective assets and
will not result in the creation or imposition of (or the obligation to create or
impose) any lien or encumbrance on any of the assets of the Assignor or any of
its Subsidiaries except as contemplated by this Agreement. The Assignor
covenants and agrees that it will defend the Bank's right, title and security
interest in and to the Collateral and the proceeds thereof, against the claims
and demands of all persons whomsoever; and the Assignor covenants and agrees
that it will have like title to and right to pledge any other property at any
time hereafter pledged to the Bank as Collateral hereunder and will likewise
defend the right thereto and security interest therein of the Bank.
SECTION 10. INDEMNITY.
10.1. Indemnity. (a) The Assignor agrees to indemnify, reimburse and hold the
---------
Bank:, its successors, assigns, employees, agents and servants (hereinafter in
this Section 10.1 referred to individually as "Indemnitee," and collectively
as "Indemnitees") harmless from any and all liabilities, obligations, damages,
injuries, penalties, claims, demands, actions, suits, judgments and any and all
costs, expenses or disbursements (including attorneys' fees and expenses) of
whatsoever kind and nature (for the purposes of this Section 10.1 the foregoing
are collectively called "expenses") imposed on, asserted against or incurred
by any of the Indemnitees in any way relating to or arising out of this
EXHIBIT E
Page 9
Agreement, the Letter of Credit Agreement, any other L/C Document or any other
document executed in connection herewith and therewith or in any other way
connected with the administration of the transactions contemplated hereby and
thereby or the enforcement of any of the terms of, or the preservation of any
rights under any thereof or in any way relating to or arising out of the use of
the Collateral; provided that no Indemnitee shall be indemnified pursuant to
--------
this Section 10.1(a) for expenses to the extent caused by the gross negligence
or willful misconduct of such Indemnitee. The Assignor agrees that upon written
notice by any Indemnitee of the assertion of such a liability, obligation,
damage, injury, penalty, claim, demand, action, suit or judgment, the Assignor
shall assume full responsibility for the defense thereof. Each Indemnitee agrees
to use its best efforts to promptly notify the Assignor of any such assertion of
which such Indemnitee has knowledge.
(b) Without limiting the application of Section 10.1(a) hereof, the Assignor
agrees to pay, or reimburse the Bank for any and all fees, costs and expenses of
whatever kind or nature incurred in connection with the creation, preservation
or protection of the Bank's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Bank's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.
(c) Without limiting the application of Section 10.#l(a) or (b) hereof, the
Assignor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, costs, damages and expenses which such Indemnitee may suffer,
expend or incur in consequence of or growing out of any misrepresentation by
the Assignor in this Agreement, the Letter of Credit Agreement, any other L/C
Document or in any writing contemplated by or made or delivered pursuant to or
in connection with this Agreement, the Letter of Credit Agreement or any other
L/C Document.
(d) If and to the extent that the obligations of the Assignor under this
Section 10.1 are unenforceable for any reason, the Assignor hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
EXHIBIT E
Page 10
10.2. Indemnity Obligations Secured by Collateral; Survival. Any amounts paid
-----------------------------------------------------
by any Indemnitee as to which such Indemnitee has the right to reimbursement
shall constitute Obligations secured by the Collateral. The indemnity
obligations of the Assignor contained in this Section 10 shall continue in full
force and effect notwithstanding the full payment of all Obligations.
SECTION 11. TERMINATION; RELEASE.
(a) After the Termination Date, this Agreement shall terminate, and the Bank,
at the request and expense of the Assignor will execute and deliver to the
Assignor, a proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to the
Assignor (without recourse and without any representation or warranty) such of
the Collateral as may remain in the possession of the Bank and has not
theretofore been sold or otherwise applied or released pursuant to this
Agreement together with any monies at the time held by the Bank hereunder. As
used in this Agreement, "Termination Date" shall mean the date upon which the
Letter of Credit issued pursuant to the Letter of Credit Agreement has been
terminated in accordance with its terms, and all Obligations then outstanding
have been paid in full.
(b) At any time that the Assignor desires that Collateral be released as
provided in the foregoing Section 11(a), the Assignor shall deliver to the Bank
a certificate signed by any Authorized Officer of the Assignor stating that the
release of the respective Collateral is permitted pursuant to said Section
11(a).
SECTION 12. NOTICES, ETC.
Except as otherwise specified herein, all notices, requests, demands or other
communications to or upon the respective parties hereto shall be in writing and
deemed to have been duly given or made when delivered to the party to which such
notice, request, demand or other communication is required or permitted to be
given or made under this Agreement, addressed as follows:
EXHIBIT E
PAGE 11
(a) if to the Assignor, at:
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
with copies to:
The Jordan Company
0 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
and
Xxxxx Xxxxxxx, Esq.
Xxxxx Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(b) if to the Bank, at:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx Xxxxx
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
Section 13. MISCELLANEOUS.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE W1TH AND BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK. This
EXHIBIT E
Page 12
Agreement shall be binding upon the Assignor and its successors and assigns and
shall inure to the benefit of and be enforceable by the Bank and its successors
and assigns. The headings in this Agreement are for purposes of reference only
and shall not limit or define the meaning hereof. This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which shall constitute one instrument. Delivery of an executed counterpart of
the signature pages to this Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Agreement. This Agreement
shall become effective on the date on which each of the parties shall have
executed and delivered a copy hereof. In the event that any provision of this
Agreement shall prove to be invalid or unenforceable, such provision shall be
deemed to be severable from the other provisions of this Agreement Which shall
remain binding on all parties hereto.
SECTION 14. WAIVER; AMENDMENT.
None of the terms and conditions of this Agreement may be changed, waived,
modified or varied in any manner whatsoever unless in writing duly signed by the
Assignor and the Bank.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
MK HOLDINGS, INC., as Assignor
By
----------------------------
Title:
BANKERS TRUST COMPANY
By
----------------------------
Title:
EXHIBIT F
---------
[LETTERHEAD OF CT CORPORATION SYSTEM]
-----------------------------------
[Date]
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Letter of Credit Agreement, dated as of September 22,
1995, among MK Group, Inc. ("Parent"), MK Holdings, Inc. (which shall be renamed
"Xxxxxx-Xxxxx Industries, Inc.") (the "Company"), and Bankers Trust
Company (the "Bank") (as such Letter of Credit Agreement may be modified,
supplemented or amended from time to time, the "Credit Agreement"). Unless
otherwise defined herein, capitalized terms used in this letter shall have the
meanings set forth in the Credit Agreement.
Pursuant to Section 8.07 of the Credit Agreement each of Parent and the
Company has irrevocably designated, appointed and empowered the undersigned, CT
Corporation System, with offices currently located at 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, as its authorized designee, appointee and agent to receive,
accept and acknowledge for and on its behalf, and in respect of its property,
service of any and all legal process, summons, notices and documents which may
be served in any such action or proceeding brought in the courts of the State of
New York or of the United States of America for the Southern District of New
York with respect to the Credit Agreement or any other L/C Document.
EXHIBIT F
Page 2
The undersigned hereby informs you that it irrevocably accepts such
appointment as agent as set forth in Section 8.07 of the Credit Agreement and
agrees with you that the undersigned (i) shall inform the Bank promptly in
writing of any change of its address in New York City, (ii) shall perform its
obligations as such process agent in accordance with the provisions of Section
8.07 of the Credit Agreement and (iii) shall forward promptly to Parent or the
Company, as the case may be, any legal process, summons, notices and
documents received by the undersigned in its capacity as process agent.
As process agent, the undersigned, and its successor or successors, agree to
discharge the above-mentioned obligations and will not refuse fulfillment of
such obligations under Section 8.07 of the Credit Agreement.
Very truly yours,
CT CORPORATION SYSTEM
By
---------------------------
Title:
EXHIBIT G-1
-----------
THIS NOTE HAS NOT BEEN REGISTERED UNDER THF SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAWS AND ACCORDINGLY MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR LAWS OR PURSUANT TO AN EXEMPTION THEREFROM.
MK HOLDINGS, INC.
SECURED NOTE
DUE DECEMBER 26, 1996
$90,000,000 Deerfield, Illinois
September 22, 1995
FOR VALUE RECEIVED, the undersigned, MK HOLDINGS, INC., an Illinois
corporation (the "Corporation"), hereby promises to pay to the Xxxx X. Xxxxx
Revocable Trust Under Agreement dated November 5, 1988 c/o XXXX X. XXXXX, as
agent for the Sellers (as defined in the Purchase Agreement) (together with his
successors and permitted assigns, the "Note Holders' Agent"), in immediately
available funds by wire transfer in accordance with written instructions
provided to the Corporation by the Note Holders' Agent, or in the absence of
such instructions by cashier's check at the office of the Note Holders' Agent at
000 Xxxxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxxx 00000, the aggregate principal amount of
NINETY MILLION DOLLARS U.S. $90,000,000 on December 26, 1996 (subject to Section
1.2 hereof). Certain capitalized terms are used in this Note as defined in
Section 4.
Section 1. Payment.
-------
1.1 Interest. The outstanding principal amount of this Note which is due in
--------
accordance with the provisions hereof shall bear interest (computed on the basis
of a three hundred sixty-five (365) or three hundred sixty-six (366) day year,
as the case may be) at a rate equal to the Secured Note Interest Rate from
September 23, l995 to (but excluding) the date on which the principal amount of
this Note is paid in full. Such interest shall be due and payable on or before
the close of business in the Note Holders' Agent's account at Bankers Trust
Company on each Acceleration Date provided below and any unpaid balance of such
interest shall be due and payable on or before the close of business in the Note
Holders' Agent's account at Bankers Trust Company on the Maturity Date.
1.2 Principal. The Corporation shall pay the entire unpaid balance of
---------
principal on this Note on December 26, 1996, except that
-1-
such payment of such principal amount and all accrued interest may be
accelerated by
(i) the Note Holders' Agent in writing by five (5) Business Days prior
notice to the Corporation to any of the four Acceleration Dates provided below:
provided, however, such notice shall not be given by the Note Holders' Agent
unless and until the earliest to occur of December 28, l995, March 28, 1996,
June 27, 1996, or September 26, 1996 (said four dates referred to as the
"Acceleration Dates"), after the enactment and effective date of an amendment to
the Internal Revenue Code of 1986 as amended (the "Code") with the direct or
indirect result that the maximum effective rate of tax that will be payable on
any payments made under this Note that constitute, in part, Net Capital Gains
(as defined in Section 1222 of the Code) realized from payments hereunder
accounted for under the "installment method" (as defined in Section 453 (c) of
the Code) and received after such change in law becomes effective, is lower
than twenty-eight percent (28%); or
(ii) the occurrence of an Event of Default under this Note; or
(iii) receipt of written notice fron Bankers Trust by the Note Holders'
Agent of pending termination of the Letter of Credit.
1.3 Business Days. Whenever payment of principal of, or interest on, this
-------------
Note shall be due on a date that is not a Business Day, the date for payment
thereof shall be the next succeeding Business Day and interest due at the rate
then in effect on the unpaid principal and any other amounts payable hereunder
shall accrue during such extension and shall be payable on such succeeding
Business Day.
1.4 Note Holder Agreement. All payments of principal and interest hereunder
---------------------
and all notices, information, approvals, or disclosures required hereunder
shall be made to the Note Holders' Agent, who is the payee of this Note for all
purposes of this Note. The Note Holders' Agent shall accept said payments
subject to the terms and provisions of that certain Note Holder Agreement
("Note Holder Agreement") dated September 22, l995, by and among the Note
Holders' Agent and the Sellers (said parties to such Note Holder Agreement are
herein collectively referred to as the "Holders"). No change in the Note
Holders' Agent shall be effective until given to the Corporation in Writing.
1.5 Cost of Collection. In the event this Note, or any part hereof, is not
------------------
paid when due, the Corporation agrees to pay on demand all costs of collection,
including reasonable attorneys' fees. Any amount of principal, interest or other
amounts due hereunder which are not paid when due, whether by acceleration or
otherwise, shall bear interest at the rate of seven and a quarter percent
(7.25%) per annum, until such amounts are paid.
-2-
1.6 No Set-off. All obiligations of the Corporation hereunder are
----------
independent covenants from the obligations of the Holders under the Purchase
Agreement. The Corporation shall not be entitled to set-off or reduce any
amounts of interest payable hereunder for any obligations or liabilities of
the Holders, to the Corporation or any claims by the Corporation against the
Holders except for liabilities or obligations under Section 1.07, of the
Purchase Agreement.
1.7 No Prepayment. The Corporation shall not prepay this Note in whole or
-------------
in part.
Section 2. Supporting Letter of Credit.
---------------------------
2.1 Letter of Credit. This Note is supported by a Letter of Credit dated
----------------
this date issued by Bankers Trust Company in favor of Note Holders' Agent. The
terms of the Letter of Credit are incorporated into this Note by reference to
the same effect as if set forth in this Note in their entirety. In the event of
a default under this Note, the Note Holders' Agent may exercise any of the
remedies granted hereunder or by the Letter of Credit.
Section 3. Defaults
--------
3.1 Events of Default. If one or more of the following events ("Event of
-----------------
Default") shall have occurred and be continuing:
(a) the Corporation shall fail to pay on the due date thereof any
principal of this Note or shall fail to pay on the due date thereof any
interest and the same shall not have been cured within 3 days after written
notice thereof has been given by the Note Holders' Agent to the
Corporation;
(b) the Corporation or Bankers Trust Company shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors; or
(c) an involuntary case or other proceeding shall be comnenced against
the Corporation or Bankers Trust Company seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the
-3-
appointment of a trustee, receiver, liquidator, custodian or other similar
official, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 90 days; or an order for relief
shall be entered against the Corporation or Bankers Trust Company under the
Federal bankruptcy laws as now or hereafter in effect;
then, and in every such event, the Note Holders' Agent shall have the right to
elect without notice, to (i) declare the principul balance remaining unpaid
under this Note, and all unpaid interest accrued hereon immediately due and
payable in full, (ii) draw on the Letter of Credit, and/or (iii) exercise any
and all other rights and remedies available at law or in equity.
3.2 Waiver. The Corporation hereby waives presentment, demand, protest,
------
notice of dishonor and/or protest, notice of nonpayment and all other notices
and demands, and assents to the extension of the time of payment, forbearance or
other indulgence, without notice.
Section 4. Definitions. For purposes of this Note, the following terms have
-----------
the meanings set forth below:
"Business Day" means any day except a Saturday, Sunday or other days on
------------
which commercial banks in New York City are required or authorized by law to
close.
"Letter of Credit" means the $95,600,000 Letter of Credit issued of even
----------------
date herewith in favor of the Note Holders' Agent by Bankers Trust Company at
the request of the Corporation.
"Maturity Date" means December 26, 1996, or such earlier date when this
-------------
Note is due and payable in full pursuant to the terms hereof.
"Note" means this Secured Promissory Note dated September 22, 1995.
----
"Purchase Agreement" means the Agreement for Purchase and Sale of Stock of
------------------
Xxxxxx-Xxxxx Industries, Inc., Mercury Industries, Inc. and Elmco Industries,
Inc. dated as of May 26, 1995, among the Corporation and the Sellers, as
amended.
-4-
"Secured Note Interest Rate" means, (i) from and including September 23,
--------------------------
1995 through Septedber 27, l995, 5.16% per annum; (ii) from September 28, 1995
through December 27, l995, an amount exactly equal to the rate per annum paid
on ninety day Treasury Bills issued on September 28, l995; (iii) from December
28, 1995 through March 27, 1996, an amount exactly equal to the rate per annum
paid on ninety day U.S. Treasury Bills issued on December 28, 1995; (iv) from
March 28, 1996 through June 26, l996, an amount exactly equal to the rate per
annum paid on ninety day U.S. Treasury Bills issued on March 28, 1996; (v)
from June 27, 1996 through September 25, 1996, an amount exactly equal to the
rate per annum paid on ninety day U.S. Treasury Bills issued on June 27, 1996;
and (vi) from September 26, 1996 through December 25, 1996, an amount exactly
equal to the rate per annum paid on ninety day Treasury Bills issued on
September 26, 1996.
Section 5. Miscellaneous.
-------------
5.1 Notices. All notices, requests and other communications to any party
-------
hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission or sent by certified, registered or express mail, postage
prepaid, and shall be deemed given when so delivered personally, or sent by
facsimile transmission, or if mailed or sent overnight courier, upon receipt
thereof, as follows:
If to the Corporation to:
Xxxxxx X. Xxxxx, President
Jordan Industries, Inc.
ArborLake Centre
Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to:
G. Xxxxxx Xxxxxx, Esq.
Xxxxxxx X. Xxx Xxxx, Esq.
Xxxxx Xxxx LLP
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
-5-
If to the Note Holders' Agent, to:
c/o Xxxx X. Xxxxx
00x Xxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
with a copy to:
Xxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Wildman, Harrold, Xxxxx & Dlxon
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone: 000-000-0000
Telecopier: 312-201-2555
Each party may, by notice given in accordance with this Section to the other
party, designate another address or person for receipt of notices hereunder.
5.2 No Waivers. No failure or delay by the Note Holders' Agent in
----------
exercising any right, power or privilege hereunder or under this Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law. The
acceptance by the Note Holders' Agent of any partial payment made hereunder
after the time when any of the Corporation's liabilities hereunder become due
and payable will not waive, affect or diminish any right of the Note Holders'
Agent to require strict compliance and performance herewith. No notice to or
demand on the Corporation in any case shall entitle the Corporation to any
other or further notice or demand in or related to similar circumstances
requiring such notice.
5.3 Amendments and Waivers. Any provision of this Note may be amended or
----------------------
waived if, but only if, such amendment or waiver is in writing, signed by the
Corporation and the Note Holders' Agent.
5.4 Successors and Assigns. The provisions of this Note shall be binding
----------------------
upon and inure to the benefit of the Note Holders' Agent and his successors and
permitted assigns under Section 1.4. Without the prior written consent of the
Corporation the Note Holders' Agent agrees not to, (a) sell, assign, pledge or
otherwise transfer, in whole or in part, directly or indirectly, this Note or
any interest therein or (b) create, incur or suffer to exist any security
interest, lien, charge or other encumbrance whatsoever upon this Note.
-6-
5.5 Company Obligations. The Holders agree and acknowledge that this Note
-------------------
and the Corporation's obligations hereunder are solely obligations and
liabilities of the Corporation. None of the Corporation's directors, officers,
employees, stockholders, advisors, consultants and affiliates or any other
persons shall be obligated or liable in respect of this Note, and the Note
Holders' Agent hereby releases them from any such obligation of liability.
5.6 LITIGATION. THIS NOTE SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND
----------
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, AND NO
CHOICE OF LAW PROVISION SHALL BE USED TO APPLY ANY LAW OTHER THAN THAT OF
ILLINOIS, AND NO DEFENSE, COUNTERCLAIM OR RIGHT OF SET-OFF GIVEN OR ALLOWED BY
THE LAWS OF ANY STATE OR JURISDICTION, OR ARISING OUT OF THE ENACTMENT,
MODIFICATION OR REPEAL OF ANY LAW, REGULATION, ORDINANCE OR DECREE OF ANY
FOREIGN JURISDICTION, SHALL BE INTERPOSED IN ANY ACTION HEREON. SUBJECT TO
SECTION 5.7, THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING TO ENFORCE OR
ARISING OUT OF THIS NOTE SHALL BE COMMENCED IN THE STATE COURTS, OR IN THE
UNITED STATES DISTRICT COURTS IN CHICAGO, ILLINOIS. THE PARTIES CONSENT TO SUCH
JURISDICTION, AGREE THAT VENUE WILL BE PROPER IN SUCH COURTS AND WAIVE ANY
OBJECTIONS BASED UPON FORUM NON CONVENIENS. THE CHOICE OF FORUM SET FORTH IN
----- --- ----------
THIS SECTION 5.6 SHALL BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY ACTION UNDER
THIS AGREEMENT IN ANY JURISDICTION.
5.7 JURY WAIVER. THE CORPORATION IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY
-----------
JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR
IN CONNECTION WITH THIS NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
(II) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO
THIS NOTE OR ANY SUCH AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT, AND AGREES
THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY.
MK HOLDINGS, INC.
By /s/ Xxxxxxxx X. Xxxxxxx
-------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice-President
-7-
EXHIBIT G-2
-----------
New Exhibit 1.02 (a) (2)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY APPLICABLE STATE SECURITIES LAWS AND ACCORDINGLY MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR LAWS OR PURSUANT TO AN EXEMPTION THEREFROM.
MK HOLDINGS, INC.
SECURED NOTE
DUE SEPTEMBER 25, 1996
$5,600,000 Deerfield, Illinois
September 22, 1995
FOR VALUE RECEIVED, the undersigned, MK HOLDINGS, INC., an Illinois
corporation (the "Corporation"), hereby promises to pay to the Xxxx X. Xxxxx
Revocable Trust Under Agreement dated November 5, 1988 c/o XXXX X. XXXXX, as
agent for the Sellers (as defined in the Purchase Agreement) (together with his
successors and permitted assigns, the "Note Holders' Agent"), in immediately
available funds by wire transfer in accordance with written instructions
provided to the Corporation by the Note Holders' Agent, or in the absence of
such instructions by cashier's check at the office of the Note Holders' Agent at
000 Xxxxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxxx 00000, the aggregate principal amount of
FIVE MILLION SIX HUNDRED THOUSAND DOLLARS U.S. $5,600,000 on September 25, 1995.
Certain capitalized terms are used in this Note as defined in Section 4.
Section 1. Payment.
-------
1.1 Interest. The outstanding principal amount of this Note which is due in
--------
accordance with the provisions hereof shall bear interest (computed on the basis
of a three hundred sixty-five (365) or three hundred sixty-six (366) day year,
as the case may be) at a rate equal to the Secured Note Interest Rate from
September 23, 1995 to (but excluding) the date on which the principal amount of
this Note is paid in full. Such interest shall be due and payable on or before
the close of business on the Maturity Date.
1.2 Princical. The Corporation shall pay the entire unpaid balance of
---------
principal on this Note on or before the close of business on Sectember 25, 1995.
-1-
1.3 Business Days. Whenever payment of principal of, or interest on, this
-------------
Note shall be due on a date that is not a Business Day, the date for payment
thereof shall be the next succeeding Business Day and interest due at the rate
then in effect on the unpaid principal and any other amounts payable hereunder
shall accrue during such extension and shall be payable on such succeeding
Business Day.
1.4 Note Holder Agreement. All payments of principal and interest hereunder
---------------------
and all notices, information, approvals, or disclosures required hereunder shall
be made to the Note Holders' Agent, who is the payee of this Note for all
purposes of this Note. The Note Holders' Agent shall accept said payments
subject to the terms and provisions of that certain Note Holder Agreement
("Note Holder Agreement") dated September 22, 1995, by and among the Note
Holders' Agent and the Sellers (said parties to such Note Holder Asreement are
herein collectively referred to as the "Holders").
No change in the Note Holders' Agent shall be effective until given to the
Corporation in writing signed by all of the parties thereto.
1.5 Cost of Collection. In the event this Note, or any part hereof, is not
------------------
paid when due, the Corporation agrees to pay on demand all costs of collection,
including reasonable attorneys' fees. Any amount of principal, interest or
other amounts due hereunder which are not paid when due, whether by acceleration
or otherwise, shall bear interest at the rate of seven and a quarter percent
(7.25%) per annum, until such amounts are paid.
1.6 No Set-off. ALL obligations of the Corporation hereunder are
----------
independent covenants from the obligations of the Holders under the Purchase
Agreement. The Corporation shall not be entitled to set-off and reduce any
amounts of interest payable hereunder for any obligations or liabilities of the
Holders to the Corporation or any claims by the Corporation against the Holders
except for claiming under Section 1.07 of the Purchase Agreement.
1.7 No Prepayment. The Corporation shall not prepay this Note in whole or
-------------
in part.
Section 2. Supporting Letter of Credit.
---------------------------
2.1 Letter of Credit. This Note is supported by a Letter of Credit dated
----------------
this date issued by Bankers Trust Company in favor of Note Holders' Agent. The
terms of the Letter of Credit are incorporated into this Note by reference to
the same effect as if set forth in this Note in their entirety. In the event of
a default under this Note, the Note Holders' Agent may exercise any of the
remedies granted hereunder or by the Letter of Credit.
-2-
Section 3. Defaults
--------
3.1 Events of Default. If one or more of the following events ("Event of
-----------------
Default") shall have occurred and be continuing:
(a) the Corporation shall fail to pay on the due date thereof any
principal of this Note or shall fail to pay on the due date thereof any
interest and the same shall not have been cured within 5 days after written
notice thereof has been given by the Note Holders' Agent to the
Corporation;
(b) the Corporation or Bankers Trust Company shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for
the benefit of creditors; or
(c) an involuntary case or other proceeding shall be commenced against
the Corporation or Bankers Trust Company seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 90 days; or an
order for relief shall be entered against the Corporation under the
Federal bankruptcy laws as now or hereafter in effect;
then, and in every such event, the Note Holders' Agent shall have the right to
elect without notice, to (i) declare the principal balance remaining unpaid
under this Note, and all unpaid interest accrued hereon immediately due and
payable in full, (ii) draw on the Letter of Credit, and/or (iii) exercise any
and all other rights and remedies available at law or in equity. Failure to
exercise these options shall not constitute a waiver of the right to exercise
the same in the event of any subsequent Event of Default due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby waived by the Corporation.
3.2 Waiver. The Corporation hereby waives presentment, demand, protest,
------
notice of dishonor and/or protest, notice of nonpayment and all other notices
and demands, and assents to the extension of the time of payment, forbearance
or other indulgence, without notice.
-3-
Section 4. Definitions. For purposes of this Note, the following terms have
-----------
the meanings set forth below:
"Business Day" means any day except a Saturday, Sunday or other days on
------------
which commercial banks in New York City are required or authorized by law to
close.
"Letter of Credit" means the $95,600,000 Letter of Credit issued of even
----------------
date herewith in favor of the Note Holders' Agent by Bankers Trust Company at
the request of the Corporation.
"Maturity Date" means September 25, 1995, or such earlier date when this
-------------
Note is due and payable in full pursuant to the terms hereof.
"Note" means this Secured Promissory Note dated September 22, 1995.
----
"Purchase Aqreement" means the Agreement for Purchase and Sale of Stock of
------------------
Xxxxxx-Xxxxx Industries, Inc., Mercury Industries, Inc. and Elmco Industries,
Inc. dated as of May 26, 1995, among the Corporation and the Sellers, as
amended.
"Secured Note Interest Rate" means 5.16% per annum.
Section 5. Miscellaneous.
-------------
5.1 Notices. All notices, requests and other communications to any party
-------
hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission or sent by certified, registered or express mail, postage
prepaid, and shall be deemed given when so delivered personally, or sent by
facsimile transmission, or if mailed or sent by overnight courier, upon receipt
thereof, as follows:
If to the Corporation to:
Xxxxxx X. Xxxxx, President
Jordan Industries, Inc.
ArborLake Centre
Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
-4-
with a copy to:
G. Xxxxxx Xxxxxx, Esq.
Xxxxxxx X. Xxx Xxxx, Esq.
Xxxxx Xxxx LLP
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
If to the Note Holders' Agent, to:
c:/o Xxxx X. Xxxxx
000 Xxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
Telephone: 000-000-0000
with a copy to:
Xxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Wildman, Harrold, Xxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone: 000-000-0000
Telecopier: 312-201-2555
Each party may, by notice given in accordance with this Section to the other
party, designate another address or person for receipt of notices hereunder.
5.2 No Waivers. No failure or delay by the Note Holders' Agent in
----------
exercising any right, power or privilege hereunder or under this Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law. The
acceptance by the Note Holders' Agent of any partial payment made hereunder
after the time when any of the Corporation's liabilities hereunder become due
and payable will not waive, affect or diminish any right of the Note Holders'
Agent to require strict compliance and performance herewith. No notice to or
demand on the Corporation in any case shall entitle the Corporation to any other
or further notice or demand in or related to similar circumstances requiring
such notice.
-5-
5.3 Amendments and Waivers. Any provision of this Note may be amended or
----------------------
waived if, but only if, such amendment or waiver is in writing, signed by the
Corporation and the Note Holders' Agent.
5.4 Successors and Assigns. The provisions of this Note shall be binding
----------------------
upon and inure to the benefit of the Note Holders' Agent and his successors and
permitted assigns under Section 1.4. Without the prior written consent of the
Corporation the Note Holders' Agent agrees not to, (a) sell, assign, pledge or
otherwise transfer, in whole or in part, directly or indirectly, this Note or
any interest therein or (b) create, incur or suffer to exist any security
interest, lien, charge or other encumbrance whatsoever upon this Note.
5.5 Company Obligations. The Holders agree and acknowledge that this Note
-------------------
and the Corporation's obligations hereunder are solely obligations and
liabilities of the Corporation. None of the Corporation's directors, officers,
employees, stockholders, advisors, consultants and affiliates or any other
persons shall be obligated or liable in respect of this Note, and the Note
Holders' Agent hereby releases them from any such obligation of liability.
5.6 LITIGATION. THIS NOTE SHALL BE GOVERNED BY, CONSTRUED, APPLIED AND
----------
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, AND NO
CHOICE OF LAW PROVISION SHALL BE USED TO APPLY ANY LAW OTHER THAN THAT OF
ILLINOIS, AND NO DEFENSE, COUNTERCLAIM OR RIGHT OF SET-OFF GIVEN OR ALLOWED BY
THE LAWS OF ANY STATE OR JURISDICTION, OR ARISING OUT OF THE ENACTMENT,
MODIFICATION OR REPEAL OF ANY LAW, REGULATION, ORDINANCE OR DECREE OF ANY
FOREIGN JURISDICTION, SHALL BE INTERPOSED IN ANY ACTION HEREON. SUBJECT TO
SECTION 5.7, THE PARTIES AGREE THAT ANY ACTION OR PROCEEDING TO ENFORCE OR
ARISING OUT OF THIS NOTE SHALL BE COMMENCED IN THE STATE COURTS, OR IN THE
UNITED STATES DISTRICT COURTS IN CHICAGO, ILLINOIS. THE PARTIES CONSENT TO SUCH
JURISDICTION, AGREE THAT VENUE WILL BE PROPER IN SUCH COURTS AND WAIVE ANY
OBJECTIONS BASED UPON FORUM NON CONVENIENS. THE CHOICE OF FORUM SET FORTH IN
----- --- ----------
THIS SECTION 5.6 SHALL BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY ACTION UNDER
THIS AGREEMENT IN ANY JURISDICTION
5.7 JURY WAIVER. THE CORPORATION IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY
-----------
JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR (II)
ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS
NOTE OR ANY SUCH AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT,
-6-
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
MK HOLDINGS, INC.
By /s/ Xxxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxxx X. Xxxxxxx
---------------------
Title: Vice-President
--------------------
-7-
ANNEX III
---------
FORM OF TERMINATION DRAWING CERTIFICATE
---------------------------------------
To: Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Commercial Loan Division, Standby Letter of Credit Unit
Re: Irrevocable Standby Letter of Credit No. S-10675.
Gentlemen:
The undersigned, the Trustee of the Xxxx X. Xxxxx Revocable Trust Under
Agreement Dated November 5, 1988 (the "Beneficiary") hereby certifies to
Bankers Trust Company (the "Bank") with respect to the above-referenced standby
letter of credit (the "Letter of Credit," the terms defined therein and not
otherwise defined herein being used herein as therein defined) in favor of the
Beneficiary, that:
The Beneficiary has received written notice from the Bank that
an Event of Default has occurred under the Letter of Credit Agreement
and that the Letter of Credit is to be terminated prior to the Stated
Expiry Date and is making a drawing under the Letter of Credit in the
amount of USD_____________, which amount is the lesser of (x) the
Stated Amount of the Letter of Credit as in effect on the date
hereof and (y) the aggregate principal amount outstanding under the
Installment Notes, dated September 22, 1995, issued by the Company to
the Beneficiary on the date hereof.
Upon receipt of the amount demanded under the Letter of Credit,
the Beneficiary will apply all of such amount directly to the payment
of the outstanding principal of the Installment Notes.
Payment of this drawing is required to be made in immediately
available funds by wire transfer to the Beneficiary in accordance with the
following payment instructions.
[Insert Payment Instructions]
ANNEX III
Page 2
IN WITNESS WHEREOF, the Beneficiary has executed and delivered this
certificate as of the _________ day of _____________, 19__.
Very truly yours,
XXXX X. XXXXX REVOCABLE
TRUST UNDER AGREEMENT DATED
NOVEMBER 5, 1988
By:
---------------------
Name:
Title:
