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EXHIBIT 4(d)
EXECUTION COPY
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CREDIT AGREEMENT
AMONG
GULTON ACQUISITION CORP.
(To be merged first into Gulton Industries,
Inc., which will then be merged into Electro-Voice, Incorporated,
which will then be renamed EV International, Inc.)
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
AND
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
DATED AS OF FEBRUARY 10, 1997
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS......................................................... 2
1.1 Defined Terms..................................................... 2
1.2 Other Definitional Provisions..................................... 30
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS..................................... 30
2.1 Revolving Credit Commitments...................................... 30
2.2 Revolving Credit Notes............................................ 31
2.3 Procedure for Revolving Credit Borrowing.......................... 31
2.4 Termination or Reduction of Revolving Credit
Commitments................................................ 32
2.5 Swing Line Commitment............................................. 32
2.6 Term Loans........................................................ 34
2.7 Term Notes........................................................ 34
2.8 Procedure for Term Loan Borrowing................................. 35
2.9 Repayment of Loans................................................ 35
SECTION 3. LETTERS OF CREDIT................................................... 36
3.1 L/C Commitment.................................................... 36
3.2 Procedure for Issuance of Letters of Credit....................... 37
3.3 Fees, Commissions and Other Charges............................... 37
3.4 L/C Participations................................................ 38
3.5 Reimbursement Obligation of the Borrower.......................... 39
3.6 Obligations Absolute.............................................. 39
3.7 Letter of Credit Payments......................................... 40
3.8 Application....................................................... 40
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT........ 40
4.1 Interest Rates and Payment Dates.................................. 40
4.2 Conversion and Continuation Options............................... 41
4.3 Minimum Amounts of Sets........................................... 42
4.4 Optional and Mandatory Prepayments................................ 42
4.5 Commitment Fees................................................... 45
4.6 Computation of Interest and Fees.................................. 45
4.7 Inability to Determine Interest Rate.............................. 45
4.8 Pro Rata Treatment and Payments................................... 46
4.9 Illegality........................................................ 47
4.10 Requirements of Law.............................................. 48
4.11 Taxes ........................................................... 49
4.12 Indemnity........................................................ 52
4.13 Certain Rules Relating to the Payment of Additional Amounts...... 52
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SECTION 5. REPRESENTATIONS AND WARRANTIES...................................... 54
5.1 Financial Condition............................................... 54
5.2 No Change; Solvent................................................ 55
5.3 Corporate Existence; Compliance with Law.......................... 55
5.4 Corporate Power; Authorization; Enforceable Obligations........... 55
5.5 No Legal Bar...................................................... 56
5.6 No Material Litigation............................................. 56
5.7 No Default......................................................... 56
5.8 Ownership of Property; Liens....................................... 56
5.9 Intellectual Property.............................................. 56
5.10 No Burdensome Restrictions........................................ 57
5.11 Taxes ............................................................ 57
5.12 Federal Regulations............................................... 57
5.13 ERISA ............................................................ 57
5.14 Collateral........................................................ 58
5.15 Investment Company Act; Other Regulations......................... 59
5.16 Subsidiaries...................................................... 59
5.17 Purpose of Loans.................................................. 59
5.18 Environmental Matters............................................. 59
5.19 No Material Misstatements......................................... 60
5.20 Delivery of the Transaction Documents............................. 60
5.21 Representations and Warranties Contained in the
Transaction Documents....................................... 61
5.22 Labor Matters..................................................... 61
SECTION 6. CONDITIONS PRECEDENT................................................. 61
6.1 Conditions to Initial Extension of Credit.......................... 61
6.2 Conditions to Each Other Extension of Credit....................... 67
SECTION 7. AFFIRMATIVE COVENANTS................................................ 68
7.1 Financial Statements............................................... 68
7.2 Certificates; Other Information.................................... 69
7.3 Payment of Obligations............................................. 70
7.4 Conduct of Business and Maintenance of Existence................... 70
7.5 Maintenance of Property; Insurance................................. 70
7.6 Inspection of Property; Books and Records; Discussions............. 70
7.7 Notices............................................................ 71
7.8 Environmental Laws................................................. 73
7.9 After-Acquired Real Property and Fixtures.......................... 74
SECTION 8. NEGATIVE COVENANTS................................................... 75
8.1 Financial Condition Covenants...................................... 75
8.2 Limitation on Indebtedness......................................... 77
8.3 Limitation on Liens................................................ 79
8.4 Limitation on Guarantee Obligations................................ 81
8.5 Limitation on Fundamental Changes.................................. 82
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8.6 Limitation on Sale of Assets....................................... 83
8.7 Limitation on Restricted Payments.................................. 84
8.8 Limitation on Capital Expenditures................................. 85
8.9 Limitation on Investments, Loans and Advances...................... 85
8.10 Limitation on Transactions with Affiliates........................ 87
8.11 Limitation on Sale and Leaseback Transactions..................... 88
8.12 Limitation on Optional Payments and Modifications
of Debt Instruments and Other Documents..................... 88
8.13 Limitation on Changes in Fiscal Year.............................. 89
8.14 Limitation on Negative Pledge Clauses............................. 89
8.15 Limitation on Lines of Business; Creation of Subsidiaries......... 90
8.16 Limitations on Currency and Commodity Hedging Transactions........ 90
8.17 Holding Company Status of EVI Audio............................... 90
8.18 Establishment and Maintenance of Lockbox Accounts................. 91
SECTION 9. EVENTS OF DEFAULT................................................... 91
SECTION 10. THE ADMINISTRATIVE AGENT AND THE OTHER REPRESENTATIVES.............. 95
10.1 Appointment....................................................... 95
10.2 Delegation of Duties.............................................. 95
10.3 Exculpatory Provisions............................................ 95
10.4 Reliance by Administrative Agent.................................. 96
10.5 Notice of Default................................................. 96
10.6 Acknowledgements and Representations by Lenders................... 97
10.7 Indemnification................................................... 97
10.8 Administrative Agent and Other Representatives in
Their Individual Capacity................................... 98
10.9 Successor Administrative Agent.................................... 98
10.10 Swing Line Lender................................................ 98
SECTION 11. MISCELLANEOUS....................................................... 99
11.1 Amendments and Waivers............................................ 99
11.2 Notices........................................................... 100
11.3 No Waiver; Cumulative Remedies.................................... 101
11.4 Survival of Representations and Warranties........................ 101
11.5 Payment of Expenses and Taxes..................................... 101
11.6 Successors and Assigns; Participations and Assignments............ 102
11.7 Adjustments; Set-off.............................................. 105
11.8 Counterparts...................................................... 106
11.9 Severability...................................................... 106
11.10 Integration...................................................... 106
11.11 GOVERNING LAW.................................................... 106
11.12 Submission To Jurisdiction; Waivers.............................. 106
11.13 Acknowledgements................................................. 107
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11.14 WAIVER OF JURY TRIAL............................................. 107
11.15 Confidentiality.................................................. 107
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SCHEDULES
I Commitments and Addresses
II Applicable Margin Step-Downs
III Lockbox Banks
3.1 Continued Letters of Credit
5.2(a) Material Adverse Effect Disclosure
5.4 Consents Required
5.6 Litigation
5.8 Mortgaged Real Property
5.9 Intellectual Property Claims
5.14 Filing Jurisdictions and Lien Searches
5.16 Subsidiaries
6.1(o) Local Counsel Jurisdictions
7.9(c) Leased U.S. Inventory Locations
8.2(g) Permitted Indebtedness
8.3(j) Permitted Liens
8.4(a) Permitted Guarantee Obligations
8.9(c) Permitted Investments
8.10 Permitted Transactions with Affiliates
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Term Note
A-3 Form of Swing Line Note
B Guarantee and Collateral Agreement
C Form of Patent and Trademark Security Agreement
D Form of Mortgage
E Form of Solvency Opinion
F Form of Opinions of Counsel to the Loan Parties
G Form of U.S. Tax Compliance Certificate
H Form of Assignment and Acceptance
I-1 Form of Borrowing Certificate
I-2 Form of Borrowing Base Certificate
J Form of Landlord Waiver
K Form of Swing Line Participation Certificate
L Form of Lockbox Agreement
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CREDIT AGREEMENT, dated as of February 10, 1997, among GULTON
ACQUISITION CORP., a Delaware corporation ("Acquisition Co."), the several banks
and other financial institutions from time to time parties to this Agreement
(collectively, the "Lenders"; individually, a "Lender"), and THE CHASE MANHATTAN
BANK ("Chase"), a New York banking corporation, as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent").
WHEREAS, Gulton Holdings Corp., a Delaware corporation which,
on or after the Effective Date, will be renamed EVI Audio Holding, Inc.
("Holdings"), and Acquisition Co., its direct Wholly Owned Subsidiary, are newly
formed companies organized by an investor group led by Greenwich Street Capital
Partners, Inc., a Delaware corporation ("GSCP");
WHEREAS, Acquisition Co. proposes to acquire Gulton
Industries, Inc., a Delaware corporation ("GII"), which is a subsidiary of Xxxx
XX Industries, Inc. ("Xxxx XX") through the purchase from Xxxx XX and Xxxx XX
PLC of the capital stock of GII (the "Acquisition") pursuant to the Stock
Purchase Agreement, dated as of December 12, 1996, by and among Xxxx XX, Xxxx XX
PLC and Acquisition Co. (as previously amended and as further amended,
supplemented, waived or otherwise modified from time to time in accordance with
this Agreement, the "Stock Purchase Agreement");
WHEREAS, immediately following the Acquisition, Acquisition
Co. will merge with and into GII (the "First Merger"), and GII as surviving
corporation of the First Merger will merge (the "Second Merger"; the First
Merger together with the Second Merger, the "Mergers") with and into
Electro-Voice, Incorporated, a Delaware corporation and a Wholly Owned
Subsidiary of GII, which will thereupon be renamed EV International, Inc. ("EV
International") and which shall be the Borrower hereunder;
WHEREAS, the other domestic subsidiaries of EV International
will be merged with and into EV International concurrently with the consummation
of the Second Merger, with EV International as surviving corporation of any such
merger;
WHEREAS, in connection with the Acquisition, EV International
will contribute or otherwise transfer Capital Stock and Indebtedness held by it
of certain Foreign Subsidiaries (as hereinafter defined) to EVI Audio
International Holding Corporation, Inc. ("EVI Audio"), a Delaware corporation
and wholly-owned subsidiary of EV International (such contribution or transfer,
the "Foreign Subsidiary Transfer");
WHEREAS, in order to (i) finance a portion of the Acquisition
Consideration (as defined in the Stock Purchase Agreement), (ii) refinance a
portion of the existing indebtedness of GII and its subsidiaries, (iii) pay
certain fees, taxes and expenses related to (x) the Acquisition and the
financing thereof and (y) the refinancing of such existing indebtedness of GII
and its subsidiaries and (iv) finance the working capital and other business
requirements of the Borrower and its Subsidiaries following the consummation of
the Acquisition and the Mergers, Acquisition Co. has requested that the Lenders
make the Loans and issue and participate in the Letters of Credit (as
hereinafter defined) provided for herein; and
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WHEREAS, all the obligations of the Borrower hereunder shall
be secured and guaranteed by, among other things, (i) a perfected first lien on
and security interest in certain collateral described in the Security Documents
(as hereinafter defined), (ii) a pledge of all the issued and outstanding
Capital Stock (as hereinafter defined) of the Borrower and each of the direct or
indirect Domestic Subsidiaries (as hereinafter defined) of the Borrower (it
being understood that as of the Effective Date and after giving effect to the
Mergers there are no Domestic Subsidiaries of the Borrower in existence), 65% of
the issued and outstanding Capital Stock of EVI Audio and 65% of the issued and
outstanding Capital Stock of any direct Foreign Subsidiary (as hereinafter
defined) of the Borrower and its Domestic Subsidiaries that is not a Foreign
Subsidiary of EVI Audio and (iii) unconditional guarantees by each of the
Guarantors (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate (grossed up for
maximum statutory reserve requirements) in effect on such day plus 1%
and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by Chase as its
prime rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged
by Chase in connection with extensions of credit to debtors); "Base CD
Rate" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one
and the denominator of which is one minus the C/D Reserve Percentage
and (b) the C/D Assessment Rate; "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if
such day shall not be a Business Day, the next preceding Business Day)
by the Board of Governors of the Federal Reserve System (the "Board")
through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at
approximately 10:00 A.M., New York City time, on such day (or, if such
day shall not be a Business Day, on the next preceding Business Day) by
the Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it;
and "Federal Funds
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Effective Rate" shall mean, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. Any change in the
ABR due to a change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Acceleration": as defined in Section 9(e).
"Account": as defined in the Uniform Commercial Code as in
effect in the State of New York.
"Acquisition": as defined in the Recitals hereto.
"Acquisition Co." as defined in the Preamble hereto.
"Adjustment Date": each date on or after the first anniversary
of the Effective Date that is the second Business Day following receipt
by the Lenders of both (i) the financial statements required to be
delivered pursuant to subsection 7.1(a) or 7.1(b), as applicable, for
the most recently completed fiscal period and (ii) the related
compliance certificate required to be delivered pursuant to subsection
7.2(b) with respect to such fiscal period.
"Adjustment Payment": the portion of the excess, if any, of
(x) the Estimated Purchase Price over (y) the Final Purchase Price (as
each such term is defined in the Stock Purchase Agreement) which is
directly attributable to the application of the provisions in clause
(i) of the third sentence of Section 2.7(a) of the Stock Purchase
Agreement and which is actually paid to the Borrower by Xxxx XX, net of
any costs, charges, expenses or other amounts relating to the
calculation and payment of such portion which are of a type referred to
in clauses (i)-(iii) of the definition of "Net Cash Proceeds" in this
subsection 1.1.
"Administrative Agent": as defined in the Preamble hereto.
"Affected Eurodollar Loans": as defined in subsection 4.9.
"Affected Eurodollar Rate": as defined in subsection 4.7.
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"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Aggregate Outstanding Revolving Credit": as to any Revolving
Credit Lender at any time, an amount equal to the sum of (a) the
aggregate principal amount of all Revolving Credit Loans made by such
Revolving Credit Lender then outstanding, (b) such Revolving Credit
Lender's Revolving Credit Commitment Percentage of the L/C Obligations
then outstanding and (c) such Revolving Credit Lender's Revolving
Credit Commitment Percentage of the Swing Line Loans then outstanding.
"Agreement": this Credit Agreement, as amended, supplemented,
waived or otherwise modified from time to time.
"Applicable Margin": during the period from the Effective Date
until the first Adjustment Date, the Applicable Margin shall equal (i)
1.75% per annum with respect to ABR Loans and (ii) 2.75% per annum with
respect to Eurodollar Loans. The Applicable Margin will be adjusted on
each Adjustment Date to the applicable rate per annum set forth under
the heading "ABR Loans Applicable Margin" or "Eurodollar Loans
Applicable Margin" on Schedule II which corresponds to the achievement
of certain performance criteria determined from the financial
statements and compliance certificate relating to the end of the fiscal
quarter immediately preceding such Adjustment Date; provided that in
the event that the financial statements required to be delivered
pursuant to subsection 7.1(a) or 7.1(b), as applicable, and the related
compliance certificate required to be delivered pursuant to subsection
7.2(b), are not delivered when due, then
(a) if such financial statements and compliance
certificate are delivered after the date such financial
statements and compliance certificate were required to be
delivered (without giving effect to any applicable cure
period) and the Applicable Margin increases from that
previously in effect as a result of the delivery of such
financial statements, then the Applicable Margin in respect of
the Loans during the period from the date upon which such
financial statements were required to be delivered (without
giving effect to any applicable cure period) until the date
upon which they actually are delivered shall, except as
otherwise provided in clause (c) below, be the Applicable
Margin as so increased;
(b) if such financial statements and compliance
certificate are delivered after the date such financial
statements and compliance certificate were required to be
delivered and the Applicable Margin decreases from that
previously in
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effect as a result of the delivery of such financial
statements, then such decrease in the Applicable Margin shall
not become applicable until the date upon which the financial
statements and certificate actually are delivered; and
(c) if such financial statements and compliance
certificate are not delivered prior to the expiration of the
applicable cure period, then, effective upon such expiration,
for the period from the date upon which such financial
statements and compliance certificate were required to be
delivered (after the expiration of the applicable cure period)
until two Business Days following the date upon which they
actually are delivered, the Applicable Margin in respect of
the Loans shall be 1.75% per annum, in the case of ABR Loans,
and 2.75% per annum, in the case of Eurodollar Loans (it being
understood that the foregoing shall not limit the rights of
the Administrative Agent and the Lenders set forth in Section
9).
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
open a Letter of Credit.
"Asset Sale": any sale, issuance, conveyance, transfer, lease
or other disposition (including, without limitation, through a Sale and
Leaseback Transaction) (a "Disposition") by the Borrower or any of its
Subsidiaries, in one or a series of related transactions, of any real
or personal, tangible or intangible, property (including, without
limitation, Capital Stock) of the Borrower or such Subsidiary to any
Person (other than to Acquisition Co., Holdings or any of their
respective Wholly Owned Subsidiaries).
"Assignee": as defined in subsection 11.6(c).
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) the amount of such Revolving Credit Lender's Revolving Credit
Commitment at such time over (b) the sum of (i) the aggregate unpaid
principal amount at such time of all Revolving Credit Loans made by
such Revolving Credit Lender and (ii) an amount equal to such Revolving
Credit Lender's Revolving Credit Commitment Percentage of the aggregate
unpaid principal amount at such time of all Swing Line Loans, provided
that for purposes of calculating Available Revolving Credit Commitments
pursuant to subsection 4.5 such amount shall be zero, and (iii) an
amount equal to such Revolving Credit Lender's Revolving Credit
Commitment Percentage of the outstanding L/C Obligations at such time;
collectively, as to all the Lenders, the "Available Revolving Credit
Commitments".
"Base CD Rate": as defined in the definition of the term "ABR"
in this subsection 1.1.
"Board": as defined in the definition of the term "ABR" in
this subsection 1.1.
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"Borrower": Acquisition Co. until the consummation of the
First Merger, and thereafter GII until the consummation of the Second
Merger, and thereafter the corporation currently named Electro-Voice,
Inc., which will be renamed EV International, Inc. (it being understood
that the First Merger and the Second Merger will be consummated on the
Effective Date).
"Borrower Patent and Trademark Security Agreement": the Patent
and Trademark Security Agreement executed and delivered by the
Borrower, substantially in the form of Exhibit C, as the same may be
amended, supplemented, waived or otherwise modified from time to time.
"Borrowing Base": at any date of determination thereof, an
amount equal to the sum of (i) 80% of the Eligible Accounts Receivable
at such date and (ii) 50% of the Eligible Inventory at such date;
provided that the amount represented by the Eligible Inventory shall at
no time be more than 50% of the Borrowing Base. The Borrowing Base
shall be determined from time to time by the Administrative Agent in
its reasonable judgment by reference to the Borrowing Base Certificate
then most recently delivered to it; provided that the information
contained in such Borrowing Base Certificate shall not be conclusive in
calculating the Borrowing Base and, after consultation with the
Borrower, the Administrative Agent shall be entitled to adjust the
amounts and other information contained therein to the extent that it
believes in its reasonable credit judgment that such adjustment is
appropriate to cause the Borrowing Base (as so adjusted) to reflect the
standards set forth in the definitions of the terms "Eligible Accounts
Receivable" and "Eligible Inventory".
"Borrowing Base Certificate": a certificate executed and
delivered by the Borrower, substantially in the form of Exhibit I-2,
delivered pursuant to subsection 7.2(e).
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.3, 2.5, 2.8 or 3.2 as a date on which the
Borrower requests the Lenders to make Loans hereunder or the Issuing
Lender to issue Letters of Credit hereunder.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or
required by law to close, except that, when used in connection with a
Eurodollar Loan, "Business Day" shall mean, any Business Day on which
dealings in Dollars between banks may be carried on in London, England
and New York, New York.
"Capital Expenditures": with respect to any Person for any
period, the sum of the aggregate of all expenditures by such Person and
its consolidated Subsidiaries during such period which, in accordance
with GAAP, are or should be included in "capital expenditures."
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"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents": (a) securities issued or fully guaranteed
or insured by the United States Government or any agency or
instrumentality thereof, (b) time deposits, certificates of deposit or
bankers' acceptances of (i) any Lender or (ii) any commercial bank
having capital and surplus in excess of $500,000,000 and the commercial
paper of the holding company of which is rated at least A-2 or the
equivalent thereof by Standard & Poor's Ratings Group (a division of
McGraw Hill Inc.) or any successor rating agency ("S&P") or at least
P-2 or the equivalent thereof by Xxxxx'x Investors Service, Inc. or any
successor rating agency ("Moody's") (or if at such time neither is
issuing ratings, then a comparable rating of such other nationally
recognized rating agency as shall be approved by the Administrative
Agent in its reasonable judgment), (c) commercial paper rated at least
A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent
thereof by Moody's (or if at such time neither is issuing ratings, then
a comparable rating of such other nationally recognized rating agency
as shall be approved by the Administrative Agent in its reasonable
judgment) and (d) investments in money market funds complying with the
risk limiting conditions of Rule 2a-7 or any successor rule of the
Securities and Exchange Commission under the Investment Company Act.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as well-capitalized and
within supervisory subgroup "B" (or a comparable successor assessment
risk classification) within the meaning of 12 C.F.R. Section 327.4 (or
any successor provision) to the Federal Deposit Insurance Corporation
(or any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the United
States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal time deposits
in Dollars of $100,000 or more having a maturity of 30 days or more.
"Change of Control": the occurrence of any of the following
events: (i) the GSCP Group shall in the aggregate beneficially,
directly or indirectly, own shares of Capital Stock having less than
51% of the total voting power of all of the outstanding Capital Stock
of Holdings, (ii) one or more members of the GSCP Group shall not have
the power (whether or not exercised), by virtue of owning shares of the
Capital Stock of Holdings or by contract or otherwise, to elect or
cause the election of a majority of the board of directors of Holdings,
(iii) Holdings shall cease to own 100% of the Capital Stock of the
Borrower or (iv) a "Change of Control" as defined in the
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Senior Subordinated Credit Agreement or the Senior Subordinated
Indenture shall have occurred at a time when any principal amount of
Indebtedness is outstanding under, respectively, such agreement or
indenture.
"Chase": The Chase Manhattan Bank, a New York banking
corporation.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commercial Letter of Credit": as defined in subsection
3.1(a).
"Commitments": the collective reference to the Revolving
Credit Commitments, the Swing Line Commitment, the Term Loan
Commitments and the L/C Commitment; individually, a "Commitment".
"Commitment Percentage": as to any Lender, the percentage of
the aggregate Revolving Credit Commitments and Term Loan Commitments
constituted by such Lender's Revolving Credit Commitment and Term Loan
Commitment, or following the Effective Date, the percentage
representing a fraction the numerator of which is the sum of (i) the
aggregate principal amount of such Lender's Term Loans then outstanding
plus (ii) the Revolving Credit Commitment of such Lender (or, following
the termination or expiration of the Revolving Credit Commitments, the
sum of (x) the aggregate principal amount of such Lender's Revolving
Credit Loans then outstanding plus (y) such Lender's Revolving
Commitment Percentage of all L/C Obligations and Swing Line Loans then
outstanding), and the denominator of which is the sum of (i) the
aggregate principal amount of Term Loans of all Lenders then
outstanding plus (ii) the aggregate Revolving Credit Commitments of all
Lenders (or, following the termination or expiration of the Revolving
Credit Commitments, the sum of (x) the aggregate principal amount of
all Revolving Credit Loans then outstanding plus (y) the aggregate
principal amount of all L/C Obligations and Swing Line Loans then
outstanding).
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with Acquisition Co. within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section
302 of ERISA and Section 412 of the Code, is treated as a single
employer under Sections 414(m) and (o) of the Code.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period adjusted to exclude the following items (without
duplication) of income or expense to the extent that such items are
included in the calculation of Consolidated Net Income: (a)
Consolidated Interest Expense, (b) any non-cash expenses and charges,
(c) total income tax expense, (d) depreciation expense, (e) the expense
associated with
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amortization of intangible and other assets (including amortization or
other expense recognition of any costs associated with asset write-ups
in accordance with APB Nos. 16 and 17), (f) non-cash provisions for
reserves for discontinued operations, (g) any gain or loss associated
with the sale or write-down of assets not in the ordinary course of
business, (h) all cash expenses relating to the Transactions, (i) any
income or loss accounted for by the equity method of accounting (except
in the case of income to the extent of the amount of cash dividends or
cash distributions paid to the Borrower or any of its Subsidiaries by
the entity accounted for by the equity method of accounting) and (j),
except for purposes of calculating "Excess Cash Flow", cash payments
made to GSCP permitted by subsection 8.10(ii) hereof for the rendering
of management consulting or financial advisory services.
"Consolidated Funded Indebtedness": at the date of
determination thereof, all Indebtedness of the Borrower and its
consolidated Subsidiaries which by its terms matures more than one year
after the date of calculation, including, in any event, under this
Agreement, the Senior Subordinated Credit Agreement and the Senior
Subordinated Notes, and any such Indebtedness maturing within one year
from such date which is renewable or extendable at the option of the
obligor to a date more than one year from such date, including, in any
event, the Term Loans, the Revolving Credit Loans and the Swing Line
Loans, in each case determined on a consolidated basis in accordance
with GAAP.
"Consolidated Fixed Charges": for any period the sum of: (i)
Consolidated Interest Expense; (ii) required amortization of
Indebtedness for the period involved and any discount or premium
relating to any such Indebtedness for any period involved, whether
expensed or capitalized; (iii) Capital Expenditures; and (iv) taxes
paid in cash for the period involved, net of tax credits and benefits
(including tax benefits arising from net operating losses) created in
such year and available for use in reducing cash taxes payable in
subsequent years; in each case of the Borrower and its consolidated
Subsidiaries determined on a consolidated basis in accordance with
GAAP.
"Consolidated Fixed Charges Ratio": for any period the ratio
of (i) Consolidated EBITDA for such period to (ii) Consolidated Fixed
Charges for such period.
"Consolidated Interest Expense": for any period, the sum of
(a) interest expense (accrued and paid or payable in cash for such
period, and in any event excluding any amortization or write-off of
financing costs) on Indebtedness of the Borrower and its consolidated
Subsidiaries for such period minus (b) interest income (accrued and
received or receivable in cash for such period) of the Borrower and its
consolidated Subsidiaries for such period, in each case determined on a
consolidated basis in accordance with GAAP.
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"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period to (b) Consolidated
Interest Expense for such period.
"Consolidated Net Income": for any period, net income of the
Borrower and its consolidated Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP.
"Consolidated Net Worth": means as to any Person, the
consolidated common stockholders' equity of such Person and its
consolidated Subsidiaries, as determined in accordance with GAAP.
"Contractual Obligation": as to any Person, any provision of
any material security issued by such Person or of any material
agreement, instrument or other undertaking to which such Person is a
party or by which it or any of its property is bound.
"Debt Portion": the portion of any Adjustment Payment
representing the percentage of the initial capitalization of the
Borrower constituted by the Loans, the aggregate principal amount of
the loans under the Senior Subordinated Credit Agreement and any the
aggregate principal amount of any other Indebtedness of the Borrower.
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice (other than, in the
case of Section 9(e), a Default Notice), the lapse of time, or both, or
any other condition, has been satisfied.
"Defaulted Account": any Account of the Borrower or its
Subsidiaries which has been or should have been charged- off as not
collectable in conformity with the accounting policies of the Borrower
and its Subsidiaries as in effect from time to time.
"Default Notice": as defined in Section 9(e).
"Disposition": as defined in the definition of the term "Asset
Sale" in this subsection 1.1.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower which is
not a Foreign Subsidiary or EVI Audio (it being understood that as of
the Effective Date and after giving effect to the Mergers, there are no
Domestic Subsidiaries of the Borrower in existence).
"Effective Date": the date on which all the conditions
precedent set forth in subsection 6.1 shall be satisfied or waived.
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"Eligible Accounts Receivable": at any time, an amount equal
to the aggregate outstanding balance of all Accounts of the Borrower
and its Domestic Subsidiaries payable in the United States of America
in Dollars, as set forth in the aging reports of billed Accounts for
the Borrower and its Domestic Subsidiaries as of such time, provided
that, unless otherwise approved in writing by the Administrative Agent,
no amount owing in respect of any Account of the Borrower or any of its
Domestic Subsidiaries shall be deemed to be included in any calculation
of Eligible Accounts Receivable if:
(a) (i) such Account is not a bona fide, valid and legally enforceable
obligation of the Obligor thereon arising from the actual sale and delivery of
goods to or rendition to and acceptance of services by such Obligor, (ii) the
goods giving rise to such Account have not been shipped and delivered to the
Obligor thereon or the services giving rise to such Account have not been
performed, (iii) such Account arises from a progress billing or percentage of
completion invoice, but only to the extent the amount billed exceeds the value
of the goods sold and delivered or the services performed with respect thereto,
or (iv) such Account otherwise does not represent a final sale or transfer of
title to such Obligor;
(b) such Account has been adjusted to reflect the return or rejection
of, or any loss of or damage to, any of the Inventory giving rise to
such Account; provided that amounts owing in respect of such Account
shall only be excluded to the extent of such adjustment;
(c) such Account includes any material financing charges or late or
other fees; provided that amounts owing in respect of such Account
shall only be excluded to the extent of such charges or fees;
(d) the Obligor thereon is the Borrower or any Subsidiary or Affiliate
thereof or any employee, officer, sales representative, agent (other
than any such sales representative or agent which has an independent
contractor relationship with the Borrower or its Subsidiaries),
director or stockholder of the Borrower or any of its Subsidiaries or
Affiliates or the sale giving rise to such Account is to an Obligor in
any jurisdiction outside the United States unless the obligations of
such Obligor thereunder are backed by a letter of credit acceptable to
the Administrative Agent;
(e) the Obligor thereon is any Governmental Authority unless all
Requirements of Law relating to the creation and perfection of a Lien
thereon in favor of the Administrative Agent for the benefit of the
Lenders shall have been satisfied in all material respects;
(f) such Account was, at the date of the original issuance of the
respective invoice therefor, payable more than 90 days after such date;
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(g) such Account remains unpaid for more than 60 days after the date
set forth for payment in the invoice originally issued therefor;
provided that amounts owing in respect of such Account shall only be
excluded to the extent of the amount which remains unpaid for more than
60 days after the date set forth for payment in the invoice originally
issued therefor;
(h) greater than 50% of the aggregate amount owing in respect of
Accounts by the Obligor thereon to the Borrower and its Subsidiaries
remain unpaid more than 60 days after the date set forth for payment in
the respective invoices originally issued therefor;
(i) such Account is a Defaulted Account, unless the obligations of the
Obligor under such Account are supported by a letter of credit issued
by a bank or other credit insurance reasonably acceptable to the
Administrative Agent;
(j) the Obligor thereon has been the Obligor in respect of Defaulted
Accounts at any time during the immediately preceding 12-month period
unless the payment of Accounts from such Obligor is secured in a manner
reasonably satisfactory to the Administrative Agent or, if the Account
arises subsequent to a decree or order for relief with respect to such
Obligor under the federal bankruptcy laws, as now or hereinafter in
effect, the timely payment and collection of such Account will not be
impaired, as determined by the Administrative Agent in its reasonable
judgment;
(k) a proceeding under bankruptcy or similar laws has occurred and is
continuing with respect to the Obligor thereon unless the payment of
Accounts from such Obligor is secured in a manner reasonably
satisfactory to the Administrative Agent or, if the Account arises
subsequent to a decree or order for relief with respect to such Obligor
under the federal bankruptcy laws, as now or hereinafter in effect, the
timely payment and collection of such Account will not be impaired, as
determined by the Administrative Agent in its reasonable judgment;
(l) it is an Account which pursuant to any agreement between the
Borrower or any of its Domestic Subsidiaries, on the one hand, and the
Obligor thereon, on the other hand, may be set off or charged against
(i) any adverse security deposit or other similar deposit made by or
for the benefit of such Obligor or (ii) any trade payable, rebate
obligation or other similar liability owing to such Obligor; provided
that amounts owing in respect of such Account shall only be excluded to
the extent of such set-off or charge against such adverse security
deposit, payable, rebate obligation or other similar liability;
(m) if the aggregate amount owing in respect of Accounts by the Obligor
thereon to the Borrower and its Domestic Subsidiaries exceeds 20% of
the aggregate of all amounts owing in respect of all Accounts of the
Borrower and its Domestic Subsidiaries at such time; provided that
amounts owing by such Obligor in respect of Accounts shall only be
excluded to the extent such amounts exceed 20% of the
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aggregate of all amounts owing in respect of all Accounts of the
Borrower and its Domestic Subsidiaries at such time;
(n) such Account is the result of a chargeback, debit memo or a
reinvoice of a disputed Account or Defaulted Account;
(o) such Account arises from (i) the sale to the Obligor on a
xxxx-and-hold, guarantied sale, sale-or-return, sale on approval,
consignment, sample or trial basis, (ii) a sale subject to any
retainages or holdbacks of any type or (iii) any other sale to the
Obligor made pursuant to any other written agreement providing for
repurchase or return; provided that no amount owing in respect of such
Account shall be excluded pursuant to this clause solely as a result of
customary quality warranties or the general right to return goods
provided by the Borrower or any of its Domestic Subsidiaries;
(p) the Obligor thereon has disputed its liability on, or the Obligor
thereon has made any claim or defense with respect to, such Account or
any other Account due from such Obligor to any Loan Party, which has
not been resolved; provided that (x) amounts owing in respect of such
Account shall only be excluded to the extent of the amount owed by such
Loan Party to the Obligor thereon or the amount of such dispute, claim
or defense, as applicable, and (y) routine adjustments to an Account
common in the industry in which the Borrower and its Domestic
Subsidiaries participate and common to their businesses, such as for
volume or quantity differences or returned goods, will be deemed not to
constitute a dispute, claim, defense or set-off;
(q) such Account does not comply in all material respects with all
applicable legal requirements;
(r) such Account is not owned solely by the Borrower or any of its
Domestic Subsidiaries free and clear of all Liens or other rights or
claims of any other Person (except in favor of the Administrative
Agent);
(s) such Account is subject to any material restrictions on the
transfer, assignability or sale thereof, enforceable against the
assignee, except pursuant to any Loan Document or any other agreement
or instrument governing any Indebtedness of the Borrower or any of its
Domestic Subsidiaries which is permitted to be incurred by the Borrower
or such Domestic Subsidiary pursuant to this Agreement; or
(t) the Administrative Agent does not have a valid and perfected first
priority security interest in such Account for the benefit of the
Lenders (except for liens arising by operation of law, appropriate
reserves for which have been reasonably established for borrowing base
purposes by the Borrower or a Domestic Subsidiary) or such Account does
not conform in all material respects to the representations and
warranties contained in this Agreement or any of the Security
Documents.
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For purposes of determining Eligible Accounts Receivable, the aggregate
amount owing in respect of Accounts meeting the foregoing criteria for
inclusion in the determination of Eligible Accounts Receivable shall be
reduced by (i) an amount equal to the amount of any reserve for the
value of an accrual for the estimated current liability for rebates and
return and credit memos with respect to such Accounts, determined in
conformity with the accounting policies of the Borrower and its
Subsidiaries as in effect from time to time and (ii) an amount equal to
the portion of any Account representing delivery or freight which has
been or should have been charged-off as not collectable in conformity
with the accounting policies of the Borrower and its Subsidiaries as in
effect from time to time.
"Eligible Inventory": at any time, an amount equal to the
aggregate value of all Inventory of the Borrower and its Domestic
Subsidiaries, excluding (i) 50% of the aggregate value of any Service
Center Inventory, (ii) 40% of the aggregate value of raw materials or
stockroom inventory (net of any applicable reserves), (iii) 100% of the
aggregate value of work in process and (iv) 100% of the aggregate value
of other supplies or materials used or consumed in the business of the
Borrower and its Domestic Subsidiaries. In determining the amount to be
so included, such Inventory shall be valued at the standard cost
maintained on a basis consistent with the Borrower's or such Domestic
Subsidiary's current and historical accounting practice less reserves
taken and adjustments made, if any,
(i) on account of physical inventory adjustments, (ii) for standard cost
variances and shrinkage accruals, (iii) for obsolete or slow moving goods as
determined by Inventory remaining unsold or not placed into production for a
period of 52 weeks, (iv) for goods returned or rejected by the Borrower's or
such Domestic Subsidiary's customers as damaged or defective, obsolete or
otherwise nonsalable, (v) for goods in transit to third parties that are not
excluded pursuant to clause (a), (b), (c) or (d) below, (vi) for Liens referred
to in clause (c)(i) below and (vii) for Liens referred to in clause (c)(ii)
below as established by the Administrative Agent in its sole discretion. Unless
otherwise approved in writing by the Administrative Agent, no amount with
respect to any Inventory shall be deemed to be included in any calculation of
Eligible Inventory if:
(a) the Inventory is not owned solely by the Borrower or such Domestic
Subsidiary or is leased or on consignment or the Borrower or such Domestic
Subsidiary does not have good and valid title thereto;
(b) the Inventory is not located at or in transit to property that is
owned or leased by the Borrower or such Domestic Subsidiary in the
United States and that is set forth on Schedule 5 to the Guarantee and
Collateral Agreement, provided that Inventory in transit to the United
States from outside the United States shall be included in the
calculation of Eligible Inventory only if the delivery of such
Inventory to the United States is guaranteed by a letter of credit from
a bank acceptable to the Administrative Agent;
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(c) the Inventory is not subject to a perfected Lien in favor of the
Administrative Agent for the benefit of the Lenders prior to all other
Liens except (i) for Liens in favor of landlords with respect to which
either (x) a Landlord Lien Waiver has been obtained or (y) a Rent
Adjustment has been subtracted from the calculation of Eligible
Inventory, provided that if the Borrower or the respective Domestic
Subsidiary fails to make all rental payments with respect to the
property at which such Inventory is located for a period of three
consecutive months, such Inventory shall not be included in the
calculation of Eligible Inventory and (ii) with respect to Eligible
Inventory located at or in transit to sites described in clause (b)
above, for Liens for normal and customary warehousing and
transportation charges (appropriate reserves for which have been
reasonably established for Borrowing Base purposes by the Borrower or
such Domestic Subsidiary); or
(d) the Inventory does not conform in all material respects to the
representations and warranties contained in this Agreement or any of
the Security Documents.
"Environmental Costs": any and all costs or expenses
(including, without limitation, attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and
litigation expenses, fines, penalties, damages, settlement payments,
judgments and awards), of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of, or in any way relating to, any
violation of, noncompliance with or liability under any Environmental
Laws or any orders, requirements, demands, or investigations of any
person related to any Environmental Laws. Environmental Costs include
any and all of the foregoing, without regard to whether they arise out
of or are related to any past, pending or threatened proceeding of any
kind.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, and such requirements of any Governmental
Authority properly promulgated and having the force and effect of law
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as have been, or now or
at any relevant time hereafter are, in effect.
"Environmental Permits": any and all permits, licenses,
registrations, notifications, exemptions and any other authorization
required under any Environmental Law.
"Environmental Program": as defined in subsection 7.8(c).
"Equity Portion": that portion of any Adjustment Payment
representing the percentage of the initial capitalization of the
Borrower not represented by the Debt Portion.
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"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate (grossed-up
for maximum statutory reserve requirements for eurodollar liabilities)
per annum determined by the Administrative Agent to be the arithmetic
mean (rounded to the nearest 1/100th of 1%) of the offered rates for
deposits in Dollars with a term comparable to such Interest Period that
appears on the Telerate British Bankers Assoc. Interest Settlement
Rates Page (as defined below) at approximately 11:00 A.M., London time,
on the second full Business Day preceding the first day of such
Interest Period; provided, however, that if there shall at any time no
longer exist a Telerate British Bankers Assoc. Interest Settlement
Rates Page, "Eurodollar Base Rate" shall mean, with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, the rate
(grossed-up for maximum statutory reserve requirements for eurodollar
liabilities) per annum equal to the rate at which Chase is offered
deposits in Dollars at approximately 11:00 A.M., London time, two
Business Days prior to the first day of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of Dollars are then being conducted
for delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"Telerate British Bankers Assoc. Interest Settlement Rates Page" shall
mean the display designated as Page 3750 on the Telerate System
Incorporated Service (or such other page as may replace such page on
such service for the purpose of displaying the rates at which Dollar
deposits are offered by leading banks in the London interbank deposit
market).
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
--------------------------------------
1.00 - Eurodollar Reserve Requirements
"Eurodollar Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurodollar funding
(currently referred to as "Eurodollar Liabilities" in Regulation D of
the Board) maintained by a member bank of the Federal Reserve System.
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"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"EVI Audio": as defined in the Recitals hereto.
"Excess Cash Flow": for any period, Consolidated EBITDA minus
(i) any Capital Expenditures made in cash during such period, minus
(ii) any principal payments (other than principal payments during such
period pursuant to subsection 4.4(b), (c) or (e) unless and to the
extent that the event giving rise to such mandatory prepayment causes
an increase in Consolidated EBITDA) on the Term Loans made during such
period, minus (iii) any principal payments resulting in a permanent
reduction of any other Indebtedness of the Borrower or any of its
consolidated Subsidiaries made during such period, minus (iv)
Consolidated Interest Expense for such period minus (v) any taxes paid
or payable in cash for such period, minus (vi) the Net Cash Proceeds
from any Asset Sale to the extent that such Net Cash Proceeds (A)
(without duplication of clause (i) or (vii) of this definition) consist
of any Reinvested Amount or are otherwise applied in accordance with
subsection 4.4(b) and (B) are included in the calculation of
Consolidated EBITDA, minus (vii) (without duplication of clause (i) of
this definition) any Investment made in accordance with subsection
8.9(e), (g), (i), (l), (m) or (n), minus (viii) the proceeds of any
Sale and Leaseback Transactions entered into by the Borrower or any of
its Subsidiaries during such period.
"Exchange Act": the Securities Exchange Act of 1934, as
amended from time to time.
"Extension of Credit": as to any Lender, the making of, or the
issuance of, or participation in, a Loan by such Lender or the issuance
of, or participation in, a Letter of Credit by such Lender.
"FIRREA": the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended from time to time.
"Federal Funds Effective Rate": as defined in the definition
of the term "ABR" in this subsection 1.1.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"First Merger": as defined in the Recitals hereto.
"Foreign Subsidiary": any Subsidiary of the Borrower which is
organized and existing under the laws of any jurisdiction outside of
the United States of America and EVI Audio.
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"Foreign Subsidiary Transfer": as defined in the Recitals
hereto.
"GAAP": with respect to the covenants contained in subsections
8.1, 8.2 and 8.8 and all defined terms relating thereto (including,
without limitation, the defined term "Consolidated Funded
Indebtedness") and the defined term "Excess Cash Flow", generally
accepted accounting principles in the United States of America in
effect on the Effective Date and, for all other purposes under this
Agreement, generally accepted accounting principles in the United
States of America in effect from time to time.
"GII": as defined in the Recitals hereto.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without
limitation, the European Union.
"GSCP Equity Investment": as defined in subsection 6.1(c).
"GSCP Group": Greenwich Street Capital Partners, L.P.,
Greenwich Street Capital Offshore Fund, Ltd., The Travelers Insurance
Company, The Travelers Life and Annuity Company, TRV Employees Fund,
Inc., Xxxxx Xxxxxx Holdings Inc. and their respective Affiliates; any
other investment fund or vehicle managed or sponsored by Greenwich
Street Capital Partners, Inc., The Travelers Insurance Company, The
Travelers Life and Annuity Company, Xxxxx Xxxxxx Holdings Inc. or any
of their respective Affiliates; and any limited or general partners of,
or other investors in, any member of the GSCP Group.
"Guarantee": as defined in the definition of "Guarantor".
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by Holdings, the
Borrower and each of its Domestic Subsidiaries and the Administrative
Agent, substantially in the form of Exhibit B, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any such
obligation of the guaranteeing person, whether or not contingent, (i)
to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds
(1) for
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the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless
such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantor": any Person which is now or hereafter a party to
(a) the Guarantee and Collateral Agreement or (b) any other guarantee
(a "Guarantee") hereafter delivered to the Administrative Agent
guaranteeing the obligations and liabilities of each of the Loan
Parties hereunder or under any other Loan Documents.
"Gulton Data Systems Contracts": the contracts of the Gulton
Data Systems division of GII set forth on Schedule 8 to the Guarantee
and Collateral Agreement on which a lien is not being granted to the
Administrative Agent for the benefit of the Lenders.
"Holdings": as defined in the Recitals hereto.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than trade liabilities
incurred in the ordinary course of business and payable in accordance
with customary practices), (b) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations of such Person under Financing Leases, (d) all
obligations of such Person in respect of acceptances issued or created
for the account of such Person, (e) for purposes of subsection 8.2 and
Section 9(e) only, all obligations of such Person in respect of
interest rate protection agreements, interest rate futures, interest
rate options, interest rate caps and any other interest rate hedge
arrangements and (f) all indebtedness or obligations of the types
referred to in the preceding clauses (a) through (e) secured by any
Lien on any property owned by such Person even though such Person has
not assumed or otherwise become liable for the payment thereof.
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"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": as defined in subsection 5.9.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each January, April, July and October to occur while such Loan is
outstanding and, if such ABR Loan is a Term Loan, the date of each
payment of principal thereof, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period
longer than three months, (x) each day which is three months, or a
whole multiple thereof, after the first day of such Interest Period and
(y) the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in its notice
of borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with
respect thereto;
provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend
beyond the Termination Date shall (for all purposes other than
subsection 4.12) end on the Termination Date.
(3) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding
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day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(4) the Borrower shall select Interest Periods so as
not to require a scheduled payment of any Eurodollar Loan
during an Interest Period for such Loan.
"Interest Rate Protection Agreement": any interest rate
protection agreement, interest rate future, interest rate option,
interest rate cap or collar or other interest rate hedge arrangement
with (i) any Lender or (ii) any financial institution reasonably
acceptable to the Administrative Agent, to or under which the Borrower
is a party or a beneficiary on the Effective Date or becomes a party or
a beneficiary after the Effective Date.
"Inventory": as defined in the Uniform Commercial Code as in
effect in the State of New York from time to time, and including,
without limitation, raw materials and all sub-assemblies held for sale.
"Investment Company Act": the Investment Company Act of 1940,
as amended from time to time.
"Investments": as defined in subsection 8.9.
"Issuing Lender": Chase or any of its Affiliates, in its
capacity as issuer of any Letter of Credit.
"Landlord Lien Waiver": a written agreement in substantially
the form of Exhibit J or otherwise reasonably acceptable to the
Administrative Agent.
"L/C Fee Payment Date": with respect to any Letter of Credit,
the last day of each January, April, July and October to occur after
the date of issuance thereof to and including the first such day to
occur on or after the date of expiry thereof.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
subsection 3.5(a).
"L/C Participants": the collective reference to all the
Revolving Credit Lenders other than the Issuing Lender.
"Lenders": as defined in the Preamble hereto.
"Letters of Credit": as defined in subsection 3.2(a).
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"Leverage Ratio": at the last day of each fiscal quarter of
the Borrower, the ratio of (a) Consolidated Funded Indebtedness at such
date to (b) Consolidated EBITDA for the period of four full fiscal
quarters ending on such date.
"Lien": any mortgage, pledge, hypothecation, assignment,
security deposit arrangement, encumbrance, lien (statutory or other),
charge or other security interest or any preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or
other title retention agreement and any Financing Lease having
substantially the same economic effect as any of the foregoing).
"Loan": a Revolving Credit Loan, a Term Loan or a Swing Line
Loan, as the context shall require; collectively, the "Loans".
"Loan Documents": this Agreement, any Notes, the Applications,
any Lockbox Agreements, the Guarantees and the Security Documents, each
as amended, supplemented, waived or otherwise modified from time to
time.
"Loan Parties": Holdings, the Borrower and each Subsidiary of
the Borrower which is a party to a Loan Document; individually, a "Loan
Party".
"Lockbox Agreement": each Lockbox Agreement, substantially in
the form of Exhibit L, with such changes or additions to such form as
shall be approved by the Administrative Agent (which approval shall not
be unreasonably withheld), among the Borrower or any of its
Subsidiaries, each Lockbox Bank and the Administrative Agent, as the
same may be amended, supplemented, waived or otherwise modified from
time to time.
"Lockbox Bank": each bank which shall enter into a Lockbox
Agreement as the "Lockbox Bank" thereunder and as defined therein,
which shall be (i) a Lender which is a bank or (ii) a bank approved by
the Administrative Agent (which approval will not be unreasonably
withheld). Each anticipated Lockbox Bank as of the Effective Date is
listed on Schedule III and has been approved by the Administrative
Agent.
"Management Investors": the collective reference to the
officers, directors, employees and other members of the management of
Holdings, the Borrower or any of their Subsidiaries, or family members
or relatives thereof or trusts for the benefit of any of the foregoing,
who at any particular date shall beneficially own or have the right to
acquire, directly or indirectly, common stock of Holdings.
"Xxxx XX": as defined in the Recitals hereto.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole, or
(b) the validity or enforceability as to any
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Loan Party thereto of this Agreement, any of the Notes or any of the
other Loan Documents or the rights and remedies of the Administrative
Agent and the Lenders under the Loan Documents taken as a whole.
"Materials of Environmental Concern": any gasoline or
petroleum (including, without limitation, crude oil or any fraction
thereof) or petroleum products or any hazardous or toxic substances or
materials or wastes defined or regulated as such in or under or which
may give rise to liability under any applicable Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Mergers": as defined in the Recitals hereto.
"Mortgaged Properties": the collective reference to the real
properties owned in fee by the Loan Parties described on Schedule 5.8,
including, without limitation, all buildings, improvements, structures
and fixtures now or subsequently located thereon and owned by any such
Loan Party.
"Mortgages": (i) each of the mortgages executed and delivered
by the Borrower and its Subsidiaries encumbering each of the Mortgaged
Properties, substantially in the form of Exhibit E (with such
modifications thereto as the Administrative Agent on or before the
Effective Date shall reasonably determine is necessary in any state to
create a valid and enforceable first mortgage Lien securing the
obligations and liabilities of the Borrower or any of its Subsidiaries,
as the case may be, under the Loan Documents) and (ii) each of the
mortgages and deeds of trust, if any, executed and delivered by the
Borrower and its Subsidiaries to the Administrative Agent pursuant to
subsection 7.9, as the same may be amended, supplemented, waived or
otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": with respect to any Asset Sale
(including, without limitation, any Sale and Leaseback Transaction
permitted under subsection 8.11), any sale or issuance of equity
securities of the Borrower or any of its Subsidiaries, the issuance of
any debt securities or any borrowings by the Borrower or any of its
Subsidiaries (other than issuances and borrowings permitted pursuant to
subsection 8.2, except as otherwise specified), an amount equal to the
gross proceeds in cash and Cash Equivalents of such Asset Sale, sale,
issuance or borrowing, net of (i) reasonable attorneys' fees,
accountants' fees, brokerage, consultant and other customary fees,
underwriting commissions and other reasonable fees and expenses
actually incurred in connection with such Asset Sale, sale, issuance or
borrowing, (ii) taxes paid or reasonably estimated to be payable as a
result thereof, (iii) appropriate amounts provided or to be provided by
the Borrower or any of its Subsidiaries as a reserve, in accordance
with GAAP, with respect to any liabilities associated with such Asset
Sale
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and retained by the Borrower or any such Subsidiary after such Asset
Sale and other appropriate amounts to be used by the Borrower or any of
its Subsidiaries to discharge or pay on a current basis any other
liabilities associated with such Asset Sale and (iv) in the case of a
sale or Sale and Leaseback Transaction of or involving an asset subject
to a Lien securing any Indebtedness, payments made and installment
payments required to be made to repay such Indebtedness, including,
without limitation, payments in respect of principal, interest and
prepayment premiums and penalties.
"Non-Excluded Taxes": as defined in subsection 4.11.
"Notes": the collective reference to the Revolving Credit
Notes, the Swing Line Note and the Term Notes.
"Obligor": with respect to an Account, the purchaser of the
goods or services giving rise to such Account or any other Person
obligated to make payment in respect of such purchase of such goods or
services.
"Other Representatives": Chase Securities Inc. in its capacity
as arranger of the Commitments hereunder and the Issuing Lender in its
capacity as such.
"Participants": as defined in subsection 11.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).
"Permitted Hedging Arrangement": as defined in subsection
8.16.
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate": as defined in the definition of the term "ABR"
in this subsection 1.1.
"Pro Forma Balance Sheet": as defined in subsection 5.1(b).
"Pro Forma Date": as defined in subsection 5.1(b).
"Refunded Swing Line Loans": as defined in subsection 2.5(c).
"Register": as defined in subsection 11.6(d).
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"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligations": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to subsection 3.5(a) for amounts
drawn under Letters of Credit.
"Reinvested Amount": with respect to any Asset Sale permitted
by subsection 8.6(g), that portion of the Net Cash Proceeds thereof as
shall, according to a certificate of a Responsible Officer of the
Borrower delivered to the Administrative Agent within 30 days of such
Asset Sale, be reinvested in the business of the Borrower and its
Subsidiaries in a manner consistent with the requirements of subsection
8.15(a) and the other provisions hereof within one year of the receipt
of such Net Cash Proceeds or, if such reinvestment is in a project
authorized by the board of directors of the Borrower that will take
longer than one year to complete, the period of time necessary to
complete such project; provided that (i) if any such certificate of a
Responsible Officer is not delivered to the Administrative Agent on the
date of such Asset Sale, any Net Cash Proceeds of such Asset Sale shall
be immediately (x) deposited in a cash collateral account established
at Chase to be held as collateral in favor of the Administrative Agent
for the benefit of the Lenders on terms reasonably satisfactory to the
Administrative Agent and shall remain on deposit in such cash
collateral account until such certificate of a Responsible Officer is
delivered to the Administrative Agent or (y) used to make a prepayment
of the Revolving Credit Loans in accordance with subsection 4.4(a)(i);
provided that, notwithstanding anything in this Agreement to the
contrary, the Borrower may not request any Extension of Credit under
the Revolving Credit Commitments that would reduce the aggregate amount
of the Available Revolving Credit Commitments to an amount that is less
than the amount of any such prepayment until such certificate of a
Responsible Officer is delivered to the Administrative Agent and (ii)
any Net Cash Proceeds not so reinvested within one year or such later
day, as applicable, shall be utilized at the end of such period or to
prepay the Loans pursuant to subsection 4.4(e).
"Rent Adjustment": with respect to any property leased by the
Borrower or any of its Domestic Subsidiaries where any Inventory is
located which may become subject to Liens in favor of the landlord
thereof arising by operation of law, an amount equal to six months'
rent at such premises.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. Section 2615 or any successor regulation thereto.
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"Required Lenders": at any time, Lenders the Total Credit
Percentages of which aggregate at least 51%.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, statute, ordinance, code,
decree, treaty, rule or regulation or determination of an arbitrator or
a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its material property or to which
such Person or any of its material property is subject, including,
without limitation, laws, ordinances and regulations pertaining to
zoning, occupancy and subdivision of real properties; provided that the
foregoing shall not apply to any non-binding recommendation of any
Governmental Authority.
"Responsible Officer": as to any Person, any of the following
officers of such Person: (i) the chief executive officer or the
president of such Person and, with respect to financial matters, the
chief financial officer, the senior vice president - finance, the
treasurer or the controller of such Person, (ii) any vice president of
such Person or, with respect to financial matters, any assistant
treasurer or assistant controller of such Person, who has been
designated in writing to the Administrative Agent as a Responsible
Officer by such chief executive officer or president of such Person or,
with respect to financial matters, such chief financial officer of such
Person, (iii) with respect to subsection 7.7 and without limiting the
foregoing, the general counsel of such Person and (iv) with respect to
ERISA matters, the senior vice president - human resources (or
substantial equivalent) of such Person.
"Revolving Credit Commitment": as to any Revolving Credit
Lender, its obligation to make Revolving Credit Loans to, and/or make
or participate in Swing Line Loans made to, and/or issue or participate
in Letters of Credit issued on behalf of, the Borrower in an aggregate
amount not to exceed at any one time outstanding the amount set forth
opposite such Revolving Credit Lender's name in Schedule I under the
heading "Revolving Credit Commitment" or, in the case of any Lender
that is an Assignee, the amount of the assigning Lender's Revolving
Credit Commitment assigned to such Assignee pursuant to subsection
11.6(c) (in each case as such amount may be adjusted from time to time
as provided herein); collectively, as to all the Revolving Credit
Lenders, the "Revolving Credit Commitments".
"Revolving Credit Commitment Percentage": as to any Revolving
Credit Lender, the percentage of the aggregate Revolving Credit
Commitments constituted by its Revolving Credit Commitment (or, if the
Revolving Credit Commitments have terminated or expired, the percentage
which (i) the sum of (a) such Lender's then outstanding Revolving
Credit Loans plus (b) such Lender's interests in the aggregate L/C
Obligations and Swing Line Loans then outstanding then constitutes of
(ii) the sum of (a) the aggregate Revolving Credit Loans of all the
Revolving Credit Lenders then outstanding plus (b) the aggregate L/C
Obligations and Swing Line Loans then outstanding).
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"Revolving Credit Commitment Period": the period from and
including the Effective Date to but not including the Termination Date,
or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein.
"Revolving Credit Lender": any Lender having a Revolving
Credit Commitment hereunder.
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Note": as defined in subsection 2.2.
"Sale and Leaseback Transaction": as defined in subsection
8.11.
"Second Merger": as defined in the Recitals hereto.
"Securities Act": the Securities Act of 1933, as amended from
time to time.
"Security Documents": the collective reference to the
Mortgages, the Guarantee and Collateral Agreement, the Borrower Patent
and Trademark Security Agreement, and all other similar security
documents hereafter delivered to the Administrative Agent granting a
Lien on any asset or assets of any Person to secure the obligations and
liabilities of the Borrower hereunder, under any Notes and/or under any
of the other Loan Documents or to secure any guarantee of any such
obligations and liabilities, including, without limitation, any
security documents executed and delivered or caused to be delivered to
the Administrative Agent pursuant to subsection 8.15(b) or 8.15(c).
"Senior PIK Preferred Stock": the senior pay-in-kind preferred
stock of Holdings acquired by GSCP Investors in the Acquisition.
"Senior Subordinated Credit Agreement": the credit agreement
dated as of February 10, 1997, as amended, modified or otherwise
supplemented from time to time in accordance with subsection 8.12 among
the Borrower, the several lenders party thereto, and Chase as
administrative agent.
"Senior Subordinated Facility Documents": the collective
reference to the Senior Subordinated Credit Agreement, the notes issued
pursuant thereto, the guarantees thereof, and each of the other
instruments and documents executed and delivered pursuant to any of the
foregoing (but excluding, for the avoidance of doubt, the Senior
Subordinated Indenture, the Senior Subordinated Notes and each of the
other instruments and documents executed and delivered pursuant to any
of the foregoing).
"Senior Subordinated Indenture": either of the following, in
each case as amended, waived, supplemented or otherwise modified from
time to time in accordance with subsection 8.12: (a) if and when
entered into, the Senior Subordinated Indenture, substantially in the
form of Exhibit C attached to the Senior Subordinated Credit
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Agreement (with such changes therein as the Administrative Agent and
the Borrower shall approve), if and when executed and delivered by the
Borrower and a trustee thereunder, relating to the Exchange Notes (as
defined in the Senior Subordinated Credit Agreement) or (b) in the
event that the Indebtedness under the Senior Subordinated Credit
Agreement is refinanced as contemplated thereby, the indenture or
credit agreement under which such refinancing Indebtedness is issued
and outstanding.
"Senior Subordinated Notes": the notes issued under the Senior
Subordinated Indenture.
"Senior Subordinated Notes Documents": the collective
reference to the Senior Subordinated Notes and the Senior Subordinated
Indenture and each of the other instruments and documents executed and
delivered pursuant to any of the foregoing, as the same may be amended,
supplemented, waived or otherwise modified from time to time in
accordance with subsection 8.12 to the extent applicable; individually
a "Senior Subordinated Note Document."
"Service Center Inventory": all Inventory of the Borrower and
its Domestic Subsidiaries located at the Xxxxxxxx Service Department -
Division #471, the Xxxx XX Audio West Service Department - Division
#477 or any location maintaining Inventory of the Borrower or any of
its Domestic Subsidiaries solely for the purpose of operating a service
department.
"Set": the collective reference to Eurodollar Loans, the then
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent" and "Solvency": with respect to any Person on a
particular date, the condition that, on such date, (a) the fair value
of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature, and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small amount of capital.
"Standby Letter of Credit": as defined in subsection 3.1.
"Stock Purchase Agreement": as defined in the Recitals hereto.
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"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of (until the Second Merger shall have been
consummated) GII and (after the Second Merger shall have been
consummated) the Borrower.
"Swing Line Commitment": the Swing Line Lender's obligation to
make Swing Line Loans pursuant to subsection 2.5.
"Swing Line Lender": Chase, in its capacity as provider of the
Swing Line Loans.
"Swing Line Loan Participation Certificate": a certificate in
substantially the form of Exhibit K.
"Swing Line Loans": as defined in subsection 2.5(a).
"Swing Line Note": as defined in subsection 2.5(b).
"Sylmar Facility": the property located at 00000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxx.
"Tax Sharing Agreement": the Tax Sharing Agreement, dated as
of February 10, 1997, among Holdings, the Borrower and EVI Audio (and
each of their permitted successors and assigns thereunder), as the same
may be amended, modified or supplemented from time to time.
"Term Loan": as defined in subsection 2.6(a) collectively, the
"Term Loans".
"Term Loan Commitment": as to any Term Loan Lender, its
obligation to make Term Loans to the Borrower on the Effective Date in
an aggregate amount not to exceed at any one time outstanding the
amount set forth opposite such Term Loan Lender's name in Schedule I
under the heading Term Loan Commitment"; collectively, as to all the
Term Loan Lenders, the "Term Loan Commitments".
"Term Loan Lender": any Lender having a Term Loan Commitment
hereunder and/or a Term Loan outstanding hereunder.
"Term Loan Percentage": as to any Term Loan Lender before the
Effective Date, the percentage which such Lender's Term Loan Commitment
constitutes of the
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aggregate Term Loan Commitments (or, after the Effective Date, the
percentage which such Lender's Term Loans then outstanding constitutes
of the aggregate Term Loans then outstanding).
"Term Note": as defined in subsection 2.7(a).
"Termination Date": August 10, 2002.
"Three Month Secondary CD Rate": as defined in the definition
of the term "ABR" in this subsection 1.1.
"Total Credit Percentage": as to any Lender at any time, the
percentage of the aggregate Revolving Credit Commitments and aggregate
Term Loan Commitments, then constituted by its Revolving Credit
Commitment and Term Loan Commitment (it being agreed that upon
termination or expiration of the Revolving Credit Commitments or the
Term Loan Commitments, the Total Credit Percentage of any Lender shall
be determined:
(i) in the case of the termination or
expiration of the Revolving Credit Commitments, by reference
to the aggregate amount of the Aggregate Outstanding Revolving
Credits of the Lenders and such Lender's Aggregate Outstanding
Revolving Credit; and
(ii) in the case of the termination or
expiration of the Term Loan Commitment by reference to the
aggregate principal amount of the Term Loans of the Lenders
and such Lender's Term Loans.
"Transaction Documents": the collective reference to the
Acquisition Documents and the Senior Subordinated Facility Documents.
"Transactions": the collective reference to the Acquisition,
the Mergers, the Foreign Subsidiary Transfer, the GSCP Equity
Investment and the issuances of Indebtedness under the Senior
Subordinated Credit Agreement and the issuance of the Senior
Subordinated Notes.
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Underfunding": the excess of the present value of all accrued
benefits under a Plan (based on those assumptions used to fund such
Plan), determined as of the most recent annual valuation date, over the
value of the assets of such Plan allocable to such accrued benefits.
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"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"U.S. Tax Compliance Certificate": as defined in subsection
4.11(b).
"Wholly Owned Subsidiary": as to any Person, any Subsidiary of
such Person of which such Person owns, directly or indirectly through
one or more Wholly Owned Subsidiaries, all of the Capital Stock of such
Subsidiary other than directors qualifying shares or shares held by
nominees.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes, any other Loan Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in any Notes and any other Loan
Document, and any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to the Borrower and its
Subsidiaries not defined in subsection 1.1 and accounting terms partly defined
in subsection 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section ,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Revolving Credit
Lender's Revolving Credit Commitment Percentage of the then outstanding L/C
Obligations and the then outstanding Swing Line Loans, does not exceed the
amount of such Lender's Revolving Credit Commitment then in effect. During the
Revolving Credit Commitment Period, the Borrower may use the Revolving Credit
Commitments by borrowing, prepaying the Revolving Credit Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof,
provided that not more than $2,000,000 in Revolving Credit Loans will be
available for borrowing on the Effective Date.
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(b) The Revolving Credit Loans may be made from time to time
in (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Administrative Agent in
accordance with subsections 2.3 and 4.2, provided that no Revolving Credit Loan
shall be made as a Eurodollar Loan after the day that is one month prior to the
Termination Date.
2.2 Revolving Credit Notes. The Borrower agrees that, upon the
request to the Administrative Agent by any Revolving Credit Lender made on or
prior to the Effective Date or in connection with any assignment pursuant to
subsection 11.6(c), in order to evidence such Lender's Revolving Credit Loans
the Borrower will execute and deliver to such Lender a promissory note
substantially in the form of Exhibit A-1, with appropriate insertions as to
payee, date and principal amount (each, as amended, supplemented, replaced or
otherwise modified from time to time, a "Revolving Credit Note"), payable to the
order of such Lender and in a principal amount equal to the aggregate unpaid
principal amount of all Revolving Credit Loans made by such Lender to the
Borrower. Each Revolving Credit Note shall (x) be dated the Effective Date, (y)
be stated to mature on the Termination Date and (z) provide for the payment of
interest in accordance with subsection 4.1. A Revolving Credit Note may be
assigned or otherwise transferred only by registration of such assignment or
transfer in the Register (and each Revolving Credit Note shall expressly so
provide). Any assignment or transfer of a Revolving Credit Note shall be
registered in the Register only upon surrender for registration of assignment or
transfer of the Revolving Credit Note accompanied by an Assignment and
Acceptance duly executed by the assigning Lender, and thereupon a new Revolving
Credit Note shall be issued to the designated Assignee and the surrendered
Revolving Credit Note shall be returned by the Administrative Agent to the
Borrower marked "cancelled". No assignment of a Revolving Credit Note shall be
effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this subsection 2.2.
2.3 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 12:30 P.M., New York City time, at least (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar Loans or (b) one
Business Day prior to the requested Borrowing Date, otherwise), specifying (i)
the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof and
(iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR Loans, except
any ABR Loan to be used solely to pay a like amount of outstanding Reimbursement
Obligations or Swing Line Loans, $1,000,000 or a whole multiple of $500,000 in
excess thereof (or, if the then Available Revolving Credit Commitments are less
than $1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$1,000,000 or a whole multiple of $500,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Revolving Credit Lender thereof. Subject to
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the satisfaction of the conditions precedent specified in subsection 6.2, each
Revolving Credit Lender will make the amount of its pro rata share of each
borrowing of Revolving Credit Loans available to the Administrative Agent for
the account of the Borrower identified in such notice at the office of the
Administrative Agent specified in subsection 11.2 prior to 12:30 P.M. (or 10:00
A.M., in the case of the initial borrowing hereunder), New York City time, or at
such other office of the Administrative Agent or at such other time as to which
the Administrative Agent shall notify such Revolving Credit Lender and the
Borrower reasonably in advance of the Borrowing Date with respect thereto on the
Borrowing Date requested by the Borrower and in funds immediately available to
the Administrative Agent. Such borrowing will then be made available to the
Borrower identified in the notice by the Administrative Agent crediting the
account of the Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Revolving Credit
Lenders and in like funds as received by the Administrative Agent.
2.4 Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent (which will promptly notify the Lenders
thereof), to terminate the Revolving Credit Commitments or, from time to time,
to reduce the amount of the Revolving Credit Commitments; provided that no such
termination or reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Revolving Credit Loans and Swing Line Loans made on
the effective date thereof, the aggregate principal amount of the Revolving
Credit Loans then outstanding, when added to the then outstanding L/C
Obligations and the then outstanding Swing Line Loans, would exceed the
Revolving Credit Commitments then in effect. Any such reduction shall be in an
amount equal to $1,000,000 or a whole multiple of $500,000 in excess thereof and
shall reduce permanently the Revolving Credit Commitments then in effect.
2.5 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees to make swing line loans
(individually, a "Swing Line Loan"; collectively, the "Swing Line Loans") to the
Borrower from time to time during the Revolving Credit Commitment Period in an
aggregate principal amount at any one time outstanding not to exceed $1,000,000,
provided that at no time may the sum of the then outstanding Swing Line Loans,
Revolving Credit Loans and L/C Obligations exceed the Revolving Credit
Commitments then in effect. Amounts borrowed by the Borrower under this
subsection 2.5 may be repaid and, through but excluding the Termination Date,
reborrowed. All Swing Line Loans shall be made as ABR Loans and shall not be
entitled to be converted into Eurocurrency Loans. The Borrower shall give the
Swing Line Lender irrevocable notice (which notice must be received by the Swing
Line Lender prior to 12:00 Noon, New York City time) on the requested Borrowing
Date specifying (i) the amount of the requested Swing Line Loan which shall be
in a minimum amount of $100,000 or whole multiples of $50,000 in excess thereof.
The proceeds of the Swing Line Loan will be made available by the Swing Line
Lender to the Borrower at the office of the Swing Line Lender by crediting the
account of the Borrower at such office with such proceeds in Dollars.
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(b) The Borrower agrees that, upon the request to the
Administrative Agent by the Swing Line Lender made on or prior to the Effective
Date or in connection with any assignment pursuant to subsection 11.6(c), in
order to evidence the Swing Line Loans the Borrower will execute and deliver to
the Swing Line Lender a promissory note substantially in the form of Exhibit
A-3, with appropriate insertions (as the same may be amended, supplemented,
replaced or otherwise modified from time to time, the "Swing Line Note"),
payable to the order of the Swing Line Lender and representing the obligation of
the Borrower to pay the amount of the Swing Line Commitment or, if less, the
unpaid principal amount of the Swing Line Loans made to the Borrower, with
interest thereon as prescribed in subsection 4.1. The Swing Line Note shall (i)
be dated the Effective Date, (i) be stated to mature on the Termination Date and
(iii) provide for the payment of interest in accordance with subsection 4.1.
(c) The Swing Line Lender, at any time in its sole and
absolute discretion may, and, at any time as there shall be a Swing Line Loan
outstanding for more than seven Business Days, the Swing Line Lender shall, on
behalf of the Borrower (which hereby irrevocably directs and authorizes the
Swing Line Lender to act on its behalf), request each Revolving Credit Lender,
including the Swing Line Lender, to make a Revolving Credit Loan as an ABR Loan
in an amount equal to such Revolving Credit Lender's Revolving Credit Commitment
Percentage of the principal amount of all of the Swing Line Loans (the "Refunded
Swing Line Loans") outstanding on the date such notice is given; provided that
the provisions of this subsection shall not affect the obligations of the
Borrower to prepay Swing Line Loans in accordance with the provisions of
subsection 4.4(i). Unless the Revolving Credit Commitments shall have expired or
terminated (in which event the procedures of paragraph (d) of this subsection
2.5 shall apply), each Revolving Credit Lender will make the proceeds of its
Revolving Credit Loan available to the Administrative Agent for the account of
the Swing Line Lender at the office of the Administrative Agent prior to 12:00
Noon, New York City time, in funds immediately available on the Business Day
next succeeding the date such notice is given. The proceeds of such Revolving
Credit Loans shall be immediately applied to repay the Refunded Swing Line
Loans.
(d) If the Revolving Credit Commitments shall expire or
terminate at any time while Swing Line Loans are outstanding, each Revolving
Credit Lender shall, at the option of the Swing Line Lender exercised
reasonably, either (i) notwithstanding the expiration or termination of the
Revolving Credit Commitments, make a Revolving Credit Loan as an ABR Loan (which
Revolving Credit Loan shall be deemed a "Revolving Credit Loan" for all purposes
of this Agreement and the other Loan Documents) or (ii) purchase an undivided
participating interest in such Swing Line Loans, in either case in an amount
equal to such Revolving Credit Lender's Revolving Credit Commitment Percentage
determined on the date of, and immediately prior to, the expiration or
termination of the Revolving Credit Commitments of the aggregate principal
amount of such Swing Line Loans. Each Revolving Credit Lender will make the
proceeds of any Revolving Credit Loan made pursuant to the immediately preceding
sentence available to the Administrative Agent for the account of the Swing Line
Lender at the office of the Administrative Agent prior to 12:00 Noon, New York
City time, in funds immediately available on the Business Day next succeeding
the date on
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which the Revolving Credit Commitments expire or terminate. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the Swing Line
Loans outstanding on the date of termination or expiration of the Revolving
Credit Commitments. In the event that the Revolving Credit Lenders purchase
undivided participating interests pursuant to the first sentence of this
paragraph (d), each Revolving Credit Lender shall immediately transfer to the
Swing Line Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swing Line Lender will deliver to
such Revolving Credit Lender a Swing Line Loan Participation Certificate dated
the date of receipt of such funds and in such amount.
(e) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Revolving Credit Lender's
participating interest in a Swing Line Loan, the Swing Line Lender receives any
payment on account thereof, the Swing Line Lender will distribute to such
Revolving Credit Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Revolving Credit Lender's participating interest was outstanding and
funded); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed by
the Swing Line Lender to it.
2.6 Term Loans. Subject to the terms and conditions hereof,
each Term Loan Lender severally agrees to make a term loan (a "Term Loan") to
the Borrower in the principal amount set forth opposite such Lender's name in
Schedule I under the heading "Term Loan Commitment", on the Effective Date. The
Term Loans may be in (i) Eurodollar Loans, (ii) ABR Loans or (iii) a combination
thereof, as determined by the Borrower and notified to the Administrative Agent
in accordance with subsections 2.8 and 4.2.
2.7 Term Notes. (a) The Borrower agrees that, upon the request
to the Administrative Agent by any Term Loan Lender made on or prior to the
Effective Date or in connection with any assignment pursuant to subsection
11.6(c), in order to evidence such Lender's Term Loan, the Borrower will execute
and deliver to such Lender a promissory note substantially in the form of
Exhibit A-2 (each, as amended, supplemented, replaced or otherwise modified from
time to time, a "Term Note"), with appropriate insertions therein as to payee,
date and principal amount, payable to the order of such Term Loan Lender and in
a principal amount equal to the lesser of (a) the amount set forth opposite such
Term Loan Lender's name on Schedule I under the heading "Term Loan Commitment"
and (b) the then unpaid principal amount of the Term Loans made by such Term
Loan Lender to the Borrower. Each Term Note shall (i) be dated the Effective
Date, (ii) be payable as provided in subsection 2.8(b) and (iii) provide for the
payment of interest in accordance with subsection 4.1. A Term Note may be
assigned or otherwise transferred only by registration of such assignment or
transfer in the Register (and each Term Note shall expressly so provide). Any
assignment or transfer of a Term Note shall be registered in the Register only
upon surrender for registration of assignment or transfer of the Term Note
accompanied by an Assignment and Acceptance duly executed by the assigning
Lender, and thereupon a new Term Note shall be issued to the designated Assignee
and the surrendered Term Note shall be returned by the Administrative
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Agent to the Borrower marked "cancelled". No assignment of a Term Note shall be
effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this subsection 2.7(a).
(b) The aggregate Term Loans of all the Term Loan Lenders
shall be payable in 20 consecutive quarterly installments, commencing on
November 30, 1997, on the dates and in the principal amounts, equal to the
respective amounts set forth below (together with all accrued interest thereon)
opposite the applicable installment dates (or, if less in any case, the
aggregate amount of the Term Loans then outstanding):
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Dates Amount
----- ------
November 30, 1997 $ 972,183
February 28, 1998 $ 972,183
May 31, 1998 $ 972,183
August 31, 1998 $ 972,183
November 30, 1998 $ 972,183
February 28, 1999 $ 972,183
May 31, 1999 $1,466,725
August 31, 1999 $1,466,725
November 30, 1999 $1,466,725
February 28, 2000 $1,466,725
May 31, 2000 $1,750,000
August 31, 2000 $1,750,000
November 30, 2000 $1,750,000
February 28, 2001 $1,750,000
May 31, 2001 $2,100,000
August 31, 2001 $2,100,000
November 30, 2001 $2,100,000
February 28, 2002 $2,100,000
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Dates Amount
----- ------
May 31, 2002 $3,956,522
Termination Date $3,943,480
2.8 Procedure for Term Loan Borrowing. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 12:30 P.M., New York City time, at least (a)
three Business Days prior to the Effective Date, if all or any part of the Term
Loans are to be initially Eurodollar Loans or (b) one Business Day prior to the
Effective Date otherwise requesting that the Term Loan Lenders make the Term
Loans on the Effective Date and specifying (i) the amount to be borrowed, (ii)
whether the Term Loans are to be initially Eurodollar Loans, ABR Loans or a
combination thereof, and (iii) if the Term Loans are to be entirely or partly
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Periods therefor. Upon receipt of
such notice the Administrative Agent shall promptly notify each Term Loan Lender
thereof. Each Term Loan Lender will make the amount of its pro rata share of the
Term Loans available to the Administrative Agent for the account of the Borrower
at the office of the Administrative Agent specified in subsection 11.2 prior to
10:00 A.M., New York City time, on the Effective Date in Dollars and in funds
immediately available to the Administrative Agent. The Administrative Agent
shall on such date credit the account of the Borrower on the books of such
office of the Administrative Agent, c/o Loan and Agency Service Group, 1 Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, with the aggregate of the
amounts made available to the Administrative Agent by the Term Loan Lenders and
in like funds as received by the Administrative Agent.
2.9 Repayment of Loans. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of:
(i) each Revolving Credit Lender, the then unpaid principal amount of each
Revolving Credit Loan of such Lender, on the Termination Date (or such earlier
date on which the Revolving Credit Loans become due and payable pursuant to
Section 9); (ii) the Swing Line Lender, the then unpaid principal amount of the
Swing Line Loans made to the Borrower, on the Termination Date (or such earlier
date on which the Swing Line Loans become due and payable pursuant to Section
9); and (iii) each Term Loan Lender, the amounts specified in subsection 2.7(b)
(or, if less in any case, the aggregate amount of the Term Loans then
outstanding), on the dates specified in subsection 2.7(b) (or such earlier date
on which the Term Loans become due and payable pursuant to Section 9). The
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Loans from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in subsection
4.1.
(b) Each Lender (including the Swing Line Lender) shall
maintain in accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Lender resulting from each Loan of such
Lender from time to time, including, without limitation, the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.
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(c) The Administrative Agent shall maintain the Register
pursuant to subsection 11.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Loan made hereunder, the Type
thereof and each Interest Period, if any, applicable thereto, (ii) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 2.9(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Revolving
Credit Lenders set forth in subsection 3.4(a), agrees to issue letters of credit
("Letters of Credit") for the account of the Borrower on any Business Day during
the Revolving Credit Commitment Period in such form as may be approved from time
to time by the Issuing Lender; provided that the Issuing Lender shall not issue
any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed $10,000,000 or (ii) the Aggregate Outstanding Revolving
Credit of all the Revolving Credit Lenders would exceed the lesser of (x) the
Revolving Credit Commitments of all the Revolving Credit Lenders and (y) the
Borrowing Base then in effect. Each Letter of Credit shall be either (x) a
standby letter of credit issued to support obligations of the Borrower or any of
its Subsidiaries, contingent or otherwise, which finance the working capital and
business needs of the Borrower and its Subsidiaries incurred in the ordinary
course of business (a "Standby Letter of Credit"), or (y) a commercial letter of
credit in respect of the purchase of goods or services by the Borrower or any of
its Subsidiaries in the ordinary course of business (a "Commercial Letter of
Credit"), (ii) expire on the earlier of (i) one-year after the date of issuance
and (ii) five Business Days prior to the Termination Date, provided that a
one-year Letter of Credit may be renewed for additional one-year periods, but
may not be extended beyond five days prior to the Termination Date.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time issue any Letter
of Credit hereunder if such issuance would conflict with, or cause the Issuing
Lender or any L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
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(d) As of the Effective Date, the letters of credit listed on
Schedule 3.1 shall be deemed to have been issued hereunder and be deemed to be
Letters of Credit for all purposes hereof.
3.2 Procedure for Issuance of Letters of Credit. The Borrower
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender, at its address for notices specified
herein, an Application therefor, completed to the reasonable satisfaction of the
Issuing Lender, and such other certificates, documents and other papers and
information as the Issuing Lender may reasonably request. Upon receipt of any
Application, the Issuing Lender will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof.
3.3 Fees, Commissions and Other Charges. (a) The Borrower
shall pay to the Administrative Agent, for the account of the Issuing Lender and
the L/C Participants, a letter of credit commission with respect to each Letter
of Credit, computed for the period from and including the date of issuance of
such Letter of Credit to the expiration date of such Letter of Credit, computed
at a rate per annum equal to the Applicable Margin then in effect for Eurodollar
Loans that are Revolving Credit Loans calculated on the basis of a 360-day year,
of the aggregate amount available to be drawn under such Letter of Credit,
payable quarterly in arrears on each L/C Fee Payment Date with respect to such
Letter of Credit and on the Termination Date or such earlier date as the
Revolving Credit Commitments shall terminate as provided herein. Such commission
shall be payable to the Administrative Agent for the account of the Revolving
Credit Lenders to be shared ratably among them in accordance with their
respective Revolving Credit Commitment Percentages. The Borrower shall also pay
to the Administrative Agent, for the account of the Issuing Lender, a fee equal
to 1/4 of 1% per annum of the aggregate amount available to be drawn under such
Letter of Credit, payable quarterly in arrears on each L/C Fee Payment Date with
respect to such Letter of Credit and on the Termination Date or such other date
as the Revolving Credit Commitments shall terminate. Such commissions and fees
shall be nonrefundable.
(b) In addition to the foregoing commissions and fees, the
Borrower shall pay or reimburse the Issuing Lender for such normal and customary
costs and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the L/C Participants all
commissions and fees received by the Administrative Agent for their respective
accounts pursuant to this subsection.
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3.4 L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Commitment Percentage (determined on the date of
issuance of the relevant Letter of Credit) in the Issuing Lender's obligations
and rights under each Letter of Credit issued hereunder and the amount of each
draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower in respect of such Letter or Credit in
accordance with subsection 3.5(a), such L/C Participant shall pay to the Issuing
Lender upon demand at the Issuing Lender's address for notices specified herein
an amount equal to such L/C Participant's Revolving Credit Commitment Percentage
of the amount of such draft, or any part thereof, which is not so reimbursed;
provided that nothing in this paragraph shall relieve the Issuing Lender of any
liability resulting from the gross negligence or willful misconduct of the
Issuing Lender, or otherwise affect any defense or other right that any L/C
Participant may have as a result of such gross negligence or willful misconduct.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender on demand by the Issuing Lender pursuant to subsection in
respect of any unreimbursed portion of any payment made by the Issuing Lender
under any Letter of Credit is paid to the Issuing Lender within three Business
Days after the date such demand is made, such L/C Participant shall pay to the
Issuing Lender on demand an amount equal to the product of (i) such amount,
times (ii) the daily average Federal Funds Effective Rate during the period from
and including the date such payment is required to the date on which such
payment is immediately available to the Issuing Lender, times (iii) a fraction
the numerator of which is the number of days that elapse during such period and
the denominator of which is 360. If any such amount required to be paid by any
L/C Participant pursuant to subsection is not in fact made available to the
Issuing Lender by such L/C Participant within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
L/C Participant, on demand, such amount with interest thereon calculated from
such due date at the rate per annum applicable to ABR Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this subsection (which shall include calculations of
any such amounts in reasonable detail) shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with subsection , the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower in respect of such Letter of Credit or otherwise, including
proceeds of Collateral applied thereto by the Issuing Lender), or any payment of
interest on account thereof, the Issuing Lender will, if such payment is
received prior to 1:00 P.M., New York City time, on a Business Day, distribute
to such L/C Participant its pro rata share thereof prior to the end of such
Business Day and otherwise the
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Issuing Lender will distribute such payment on the next succeeding Business Day;
provided, however, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. (a) The Borrower
agrees to reimburse the Issuing Lender, upon receipt by the Borrower of notice
from the Issuing Lender of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender, for the amount of (i) such
draft so paid and (ii) any taxes, fees, charges or other costs or expenses
reasonably incurred by the Issuing Lender in connection with such payment. Each
such payment shall be made to the Issuing Lender, at its address for notices
specified herein in immediately available funds, on the date on which the
Borrower receives such notice, if received prior to 11:00 A.M., New York City
time, on a Business Day and otherwise on the next succeeding Business Day.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this subsection (i) from the date the draft
presented under the affected Letter of Credit is paid to the date on which the
Borrower is required to pay such amounts pursuant to paragraph (a) above at the
rate which would then be payable on any outstanding ABR Loans that are Revolving
Credit Loans and (ii) thereafter until payment in full at the rate which would
be payable on any outstanding ABR Loans that are Term Loans which were then
overdue.
3.6 Obligations Absolute. (a) The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender, any
L/C Participant or any beneficiary of a Letter of Credit, provided that this
paragraph shall not relieve the Issuing Lender or any L/C Participant of any
liability resulting from the gross negligence or willful misconduct of the
Issuing Lender or such L/C Participant, or otherwise affect any defense or other
right that the Borrower may have as a result of any such gross negligence or
willful misconduct.
(b) The Borrower also agrees with the Issuing Lender that the
Issuing Lender and the L/C Participants shall not be responsible for, and the
Borrower's Reimbursement Obligations under subsection shall not be affected by,
among other things, (i) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or (ii) any dispute between or among such
Borrower and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or (iii) any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee, provided that this paragraph shall not relieve the Issuing Lender or
any L/C Participant of any liability resulting from the gross negligence or
willful misconduct of the Issuing Lender or such L/C Participant, or otherwise
affect any defense or other right that the Borrower may have as a result of any
such gross negligence or willful misconduct.
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(c) Neither the Issuing Lender nor any L/C Participant shall
be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors or omissions caused by
such Person's gross negligence or willful misconduct.
(d) The Borrower agrees that any action taken or omitted by
the Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of the Issuing Lender or any L/C
Participant to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly notify
the Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in respect of any Letter of Credit in connection with any
draft presented for payment under such Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered under
such Letter of Credit in connection with such presentment are in conformity with
such Letter of Credit, provided that this paragraph shall not relieve the
Issuing Lender of any liability resulting from the gross negligence or willful
misconduct of the Issuing Lender, or otherwise affect any defense or other right
that the Borrower may have as a result of any such gross negligence or willful
misconduct.
3.8 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF CREDIT
4.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin in effect for such day.
(b) Each ABR Loan shall bear interest for each day that it is
outstanding at a rate per annum equal to the ABR for such day plus the
Applicable Margin in effect for such day.
(c) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any commitment fee, letter of
credit commission, letter of credit fee or other amount payable hereunder,
including Reimbursement Obligations, shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall
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bear interest at a rate per annum which is (x) in the case of overdue principal,
the rate that would otherwise be applicable thereto pursuant to the relevant
foregoing provisions of this subsection plus 2.00% or (y) in the case of overdue
interest, fees, commissions or other amounts, the rate described in paragraph
(b) of this subsection for ABR Loans plus 2.00%, in each case from the date of
such non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
(e) It is the intention of the parties hereto to comply
strictly with applicable usury laws; accordingly, it is stipulated and agreed
that the aggregate of all amounts which constitute interest under applicable
usury laws, whether contracted for, charged, taken, reserved, or received, in
connection with the indebtedness evidenced by this Agreement or any Notes, or
any other document relating or referring hereto or thereto, now or hereafter
existing, shall never exceed under any circumstance whatsoever the maximum
amount of interest allowed by applicable usury laws.
4.2 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert outstanding Term Loans and Revolving Credit
Loans from Eurodollar Loans to ABR Loans by giving the Administrative Agent at
least two Business Days' prior irrevocable notice of such election, provided
that any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto. The Borrower may elect from time to
time to convert outstanding Term Loans and Revolving Credit Loans from ABR Loans
to Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election. Any such notice of conversion
to Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each affected Lender thereof. All or any part of
outstanding Eurodollar Loans and ABR Loans may be converted as provided herein,
provided that (i) (unless the Required Lenders otherwise consent) no Loan may be
converted into a Eurodollar Loan when any Default or Event of Default has
occurred and is continuing and, in the case of any Default, the Administrative
Agent has given notice to the Borrower that no such conversions may be made and
(ii) no Loan may be converted into a Eurodollar Loan after the date that is one
month prior to the Termination Date.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent of the length of the next
Interest Period to be applicable to such Loan, determined in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
provided that no Eurodollar Loan may be continued as such (i) (unless the
Required Lenders otherwise consent) when any Default or Event of Default has
occurred and is continuing and, in the case of any Default, the Administrative
Agent has given notice to the Borrower that no such continuations may be made or
(ii) after the date that is one month prior
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to the Termination Date. Upon receipt of any such notice of continuation
pursuant to this subsection 4.2(b), the Administrative Agent shall promptly
notify each affected Lender thereof.
4.3 Minimum Amounts of Sets. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the
Eurodollar Loans outstanding comprising each Set shall be equal to $1,000,000 or
a whole multiple of $500,000 in excess thereof and so that there shall not be
more than 10 Sets at any one time outstanding.
4.4 Optional and Mandatory Prepayments. (a) The Borrower may
at any time and from time to time prepay the Loans made to it and the
Reimbursement Obligations in respect of Letters of Credit issued for its
account, in whole or in part, without premium or penalty, upon at least three
Business Days' irrevocable notice by the Borrower to the Administrative Agent
(in the case of Eurodollar Loans and Reimbursement Obligations) and at least one
Business Day's irrevocable notice by the Borrower to the Administrative Agent
(in the case of ABR Loans other than Swing Line Loans) or same-day irrevocable
notice by the Borrower to the Administrative Agent (in the case of Swing Line
Loans), specifying, in the case of any prepayment of Loans, the date and amount
of prepayment and whether the prepayment is (i) of Term Loans, Revolving Credit
Loans, or a combination thereof, and (ii) of Eurodollar Loans, ABR Loans or a
combination thereof or Swing Loans, and, in each case if a combination thereof,
the principal amount allocable to each and, in the case of any prepayment of
Reimbursement Obligations, the date and amount of prepayment, the identity of
the applicable Letter of Credit or Letters of Credit and the amount allocable to
each of such Reimbursement Obligations. Upon the receipt of any such notice the
Administrative Agent shall promptly notify each affected Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (if a Eurodollar Loan is
prepaid other than at the end of the Interest Period applicable thereto) any
amounts payable pursuant to subsection 4.12 and, in the case of prepayments of
the Term Loans only, accrued interest to such date on the amount prepaid.
Partial prepayments of (i) the Term Loans pursuant to this subsection shall be
applied pro rata to the remaining installments, and (ii) the Revolving Credit
Loans and the Reimbursement Obligations pursuant to this subsection shall
(unless the Borrower otherwise directs) be applied, first, to payment of the
Swing Line Loans then outstanding, second, to payment of the Revolving Credit
Loans then outstanding, third, to payment of any Reimbursement Obligations then
outstanding and, last, to cash collateralize any outstanding L/C Obligation on
terms reasonably satisfactory to the Administrative Agent. Partial prepayments
pursuant to this subsection 4.4(a) (other than of Swing Line Loans) shall be in
an aggregate principal amount of $1,000,000 or a whole multiple of $500,000 in
excess thereof.
(b) If the Borrower shall issue Senior Subordinated Notes
(other than Exchange Notes, as defined in the Senior Subordinated Credit
Agreement) and the gross proceeds to the Borrower of such issuance exceed the
then outstanding principal amount of Indebtedness under the Senior Subordinated
Credit Agreement, then, after repayment in full of the Senior
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Subordinated Credit Agreement, to the extent such excess proceeds permit, an
amount equal to $12,000,000 of such excess proceeds shall be used to permanently
prepay the Term Loans.
(c) Commencing May 31, 1998, and on each May 31 thereafter,
the Borrower shall prepay, in accordance with subsection 4.4(j), the Loans and
cash collateralize the L/C Obligations in an amount equal to 75% of the
Borrower's Excess Cash Flow for the fiscal year ending on the preceding February
28.
(d) If, subsequent to the Effective Date, the Borrower or any
of its Subsidiaries shall incur any Indebtedness for borrowed money (other than
with respect to the Senior Subordinated Credit Agreement or the Senior
Subordinated Notes and other Indebtedness permitted by subsection 8.2), then an
amount equal to 100% of the Net Cash Proceeds thereof shall on the first
Business Day after receipt thereof be applied toward the prepayment of the Loans
and the permanent reduction of the Revolving Credit Commitments in accordance
with subsections 4.4(j), (k) and (l).
(e) If subsequent to the Effective Date, the Borrower or any
of its Subsidiaries shall receive Net Cash Proceeds from any Asset Sales or
dispositions permitted by subsection 8.6(g), 8.6(h) or 8.11 or not otherwise
permitted by subsection 8.6, then an amount equal to 100% of the Net Cash
Proceeds (less the Reinvested Amount applicable thereto) thereof shall on the
first Business Day after receipt thereof be applied toward the prepayment of the
Loans and the permanent reduction of the Revolving Credit Commitments in
accordance with subsections 4.4(j), (k) and (l).
(f) If subsequent to the Effective Date, the Borrower shall
issue any Capital Stock, then (except for shares of Capital Stock of Holdings
issued or sold to directors, officers and employees of, or consultants to,
Holdings or any of its Subsidiaries) an amount equal to 100% of the Net Cash
Proceeds thereof shall be applied toward the prepayment of the Loans and the
permanent reduction of the Revolving Credit Commitments in accordance with
subsections 4.4(j), (k) and (l).
(g) If subsequent to the Effective Date, the Borrower shall
receive any Adjustment Payment, then an amount equal to 100% of the Debt Portion
of such Adjustment Payment shall on the first Business Day after receipt thereof
be applied toward the prepayment of the Loans and the permanent reduction of the
Revolving Credit Commitments in accordance with subsections 4.4(j), 4.4(k) and
4.4(l).
(h) If, at any time the aggregate principal amount of the
Revolving Credit Loans and Reimbursement Obligations under Letters of Credit
then outstanding exceeds an amount equal to the lesser of (i) the Borrowing Base
on such date and (ii) the aggregate Revolving Credit Commitment on such date,
the Borrower shall first repay the Revolving Credit loans then outstanding;
second pay any Reimbursement Obligations then outstanding and, last, cash
collateralize any outstanding L/C Obligation in an amount equal to such excess.
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(i) The Borrower shall prepay all Swing Line Loans then
outstanding simultaneously with each borrowing of Revolving Credit Loans.
(j)(i) Prepayments pursuant to subsections 4.4(b), 4.4(d),
4.4(e), 4.4(f) and 4.4(g) shall be applied, first, to prepay Term Loans
(applied pro rata to the then remaining installments thereof) then
outstanding, second, to prepay Swing Line Loans then outstanding,
third, to prepay Revolving Credit Loans then outstanding, fourth, to
pay any Reimbursement Obligations then outstanding and, last, to cash
collateralize any outstanding L/C Obligations on terms reasonably
satisfactory to the Administrative Agent.
(ii) Prepayments pursuant to subsection 4.4(c) shall be
applied, first, to prepay Term Loans (applied first to the first two
installments thereof due on or after the date of such prepayment in the
order of their maturities and second pro rata to the then remaining
installments thereof) then outstanding, second, to prepay Swing Line
Loans then outstanding, third, to prepay Revolving Credit Loans then
outstanding, fourth, to pay any Reimbursement Obligations then
outstanding and, last, to cash collateralize any outstanding L/C
Obligations on terms reasonably satisfactory to the Administrative
Agent.
(k) Amounts prepaid on account of Term Loans pursuant to
subsection 4.4(b), 4.4(c), 4.4(d), 4.4(e), 4.4(f) and 4.4(g) may not be
reborrowed.
(l) Subject to subsection 4.4(j), the Revolving Credit
Commitments shall be permanently reduced by the amount of all prepayments of
Revolving Credit Loans, payments of Reimbursement Obligations and cash
collateral of L/C Obligations made under subsections 4.4(d), 4.4(e), 4.4(f) and
4.4(g).
(m) Notwithstanding the foregoing provisions of this
subsection 4.4, if at any time any prepayment of the Loans pursuant to
subsection 4.4(b), 4.4(c), 4.4(d), 4.4(e), 4.4(f), 4.4(g), or 4.4(h) would
result, after giving effect to the procedures set forth in this Agreement, in
the Borrower incurring breakage costs under subsection 4.12 as a result of
Eurodollar Loans being prepaid other than on the last day of an Interest Period
with respect thereto, then, the Borrower may, so long as no Default or Event of
Default shall have occurred and be continuing, in its sole discretion, initially
(x) deposit a portion (up to 100%) of the amounts that otherwise would have been
paid in respect of such Eurodollar Loans with the Administrative Agent (which
deposit must be equal in amount to the amount of such Eurodollar Loans not
immediately prepaid) to be held as security for the obligations of the Borrower
to make such prepayment pursuant to a cash collateral agreement to be entered
into on terms reasonably satisfactory to the Administrative Agent, with such
cash collateral to be directly applied upon the first occurrence thereafter of
the last day of an Interest Period with respect to such Eurodollar Loans (or
such earlier date or dates as shall be requested by the Borrower) or (y) make a
prepayment of the Revolving Credit Loans in accordance with subsection 4.4(a)
with an amount equal to a portion (up to 100%) of the amounts that otherwise
would have been paid in respect of such Eurodollar Loans (which prepayment,
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together with any deposits pursuant to clause (x) above, must be equal in amount
to the amount of such Eurodollar Loans not immediately prepaid); provided that,
notwithstanding anything in this Agreement to the contrary, the Borrower may not
request any Extension of Credit under the Revolving Credit Commitments that
would reduce the aggregate amount of the Available Revolving Credit Commitments
to an amount that is less than the amount of such prepayment until the related
portion of such Eurodollar Loans have been prepaid upon the first occurrence
thereafter of the last day of an Interest Period with respect to such Eurodollar
Loans; provided that, in the case of either clause (x) or (y), such unpaid
Eurodollar Loans shall continue to bear interest in accordance with subsection
4.1 until such unpaid Eurodollar Loans or the related portion of such Eurodollar
Loans, as the case may be, have or has been prepaid.
4.5 Commitment Fees. The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender, a
commitment fee for the period from and including the first day of the Revolving
Credit Commitment Period to the Termination Date, computed at the rate of 1/2 of
1% per annum on the average daily amount of the Available Revolving Credit
Commitment of such Lender during the period for which payment is made, payable
quarterly in arrears on the last day of each January, April, July and October
and on the Termination Date or such earlier date as the Revolving Credit
Commitments shall terminate as provided herein, commencing on the Effective
Date.
4.6 Computation of Interest and Fees. (a) Interest and
commitment fees (other than interest based on the Prime Rate) shall be
calculated on the basis of a 360-day year for the actual days elapsed; and
interest based on the Prime Rate shall be calculated on the basis of a 365- (or
366-, as the case may be) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
affected Lenders of each determination of a Eurodollar Rate. Any change in the
interest rate on a Loan resulting from a change in the ABR, the Eurodollar
Reserve Requirements, the C/D Assessment Rate or the C/D Reserve Percentage
shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as practicable
notify the Borrower and the affected Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower
or any Lender, deliver to the Borrower or such Lender a statement showing in
reasonable detail the calculations used by the Administrative Agent in
determining any interest rate pursuant to subsection 4.1, excluding any
Eurodollar Base Rate which is based upon the Telerate British Bankers Assoc.
Interest Settlement Rates Page and any ABR which is based upon the Prime Rate.
4.7 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period, the Administrative Agent shall have determined
(which determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the
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relevant market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate with respect to any Eurodollar Loan (the "Affected Eurodollar
Rate") for such Interest Period, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as practicable
thereafter. If such notice is given (x) any Eurodollar Loans the rate of
interest applicable to which is based upon the Affected Eurodollar Rate
requested to be made on the first day of such Interest Period shall be made as
ABR Loans (to the extent otherwise permitted by subsection 4.2), (y) any
outstanding Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans the rate of interest
applicable to which is based upon the Affected Eurodollar Rate shall be
converted to or continued as ABR Loans (to the extent otherwise permitted by
subsection 4.2) and (z) any outstanding Eurodollar Loans that were to have been
converted on the first day of such Interest Period to or continued as Eurodollar
Loans the rate of interest applicable to which is based upon the Affected
Eurodollar Rate and that are not otherwise permitted to be converted to or
continued as ABR Loans by subsection 4.2 shall, upon demand by the Revolving
Credit Lenders the Revolving Credit Commitment Percentage of which aggregate at
least 51%, be immediately repaid by the applicable Borrower on the last day of
the then current Interest Period with respect thereto together with accrued
interest thereon or otherwise, at the option of the Borrower, shall remain
outstanding and bear interest at a rate which reflects, as to each of the
Revolving Credit Lenders, such Revolving Credit Lender's cost of funding such
Eurodollar Loans, as reasonably determined by such Revolving Credit Lender, plus
the Applicable Margin hereunder. If any such repayment occurs on a day which is
not the last day of the then current Interest Period with respect to such
affected Eurodollar Loan, the Borrower shall pay to each of the Revolving Credit
Lenders such amounts, if any, as may be required pursuant to subsection 4.12.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans the rate of interest applicable to which is based upon the
Affected Eurodollar Rate shall be made or continued as such, nor shall the
Borrower have the right to convert ABR Loans to Eurodollar Loans the rate of
interest applicable to which is based upon the Affected Eurodollar Rate.
4.8 Pro Rata Treatment and Payments. (a) Subject to subsection
4.4(b), each borrowing of Revolving Credit Loans (other than Swing Line Loans)
by the Borrower from the Lenders hereunder shall be made, each payment by the
Borrower on account of any commitment fee in respect of the Revolving Credit
Commitments hereunder shall be allocated by the Administrative Agent, and any
reduction of the Revolving Credit Commitments of the Lenders shall be allocated
by the Administrative Agent, pro rata according to the relevant Revolving Credit
Commitment Percentages of the Lenders. Subject to subsection 4.4(b), each
payment (including each prepayment) by the Borrower on account of principal of
and interest on any Revolving Credit Loans shall be allocated by the
Administrative Agent pro rata according to the respective outstanding principal
amounts of such Revolving Credit Loans then held by the Revolving Credit
Lenders. Except as otherwise contemplated by clause (x) of subsection 4.4(n),
each payment (including each prepayment) by the Borrower on account of principal
of and interest on any Term Loans shall be allocated by the Administrative Agent
pro rata according to the respective outstanding principal amounts of such Term
Loans then held by the Term Loan Lenders. All payments (including prepayments)
to be made by the Borrower hereunder and under any Notes, whether on account of
principal, interest, fees,
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Reimbursement Obligations or otherwise, shall be made without set-off or
counterclaim and shall be made prior to 1:00 P.M., New York City time, on the
due date thereof to the Administrative Agent, for the account of the Lenders
holding the relevant Loans or the L/C Participants, as the case may be, at the
Administrative Agent's office specified in subsection 11.2 in immediately
available funds. Payments received by the Administrative Agent after such time
shall be deemed to have been received on the next Business Day. The
Administrative Agent shall distribute such payments to such Lenders, if any such
payment is received prior to 1:00 P.M., New York City time, on a Business Day,
in like funds as received prior to the end of such Business Day and otherwise
the Administrative Agent shall distribute such payment to such Lenders on the
next succeeding Business Day. If any payment hereunder (other than payments on
the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, the maturity of such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension. If any payment on
a Eurodollar Loan becomes due and payable on a day other than a Business Day,
the maturity of such payment shall be extended to the next succeeding Business
Day (and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension) unless the result of
such extension would be to extend such payment into another calendar month, in
which event such payment shall be made on the immediately preceding Business
Day.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its Revolving Credit Commitment Percentage of such
borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not made
available to the Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the daily average Federal Funds
Effective Rate for the period until such Lender makes such amount immediately
available to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error. If such Lender's Revolving
Credit Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall notify the Borrower of the failure of such
Lender to make such amount available to the Administrative Agent and the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to ABR Loans hereunder on demand, from
the Borrower.
4.9 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof occurring after the Effective Date shall make it unlawful
for any Lender to make or maintain any Eurodollar Loans as contemplated by this
Agreement ("Affected Eurodollar Loans"), (a) such Lender shall promptly give
written notice of such circumstances to the Borrower and the
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Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Affected Eurodollar Loans, continue Affected Eurodollar Loans as such and
convert an ABR Loan to an Affected Eurodollar Loan shall forthwith be cancelled
and, until such time as it shall no longer be unlawful for such Lender to make
or maintain such Affected Eurodollar Loans, such Lender shall then have a
commitment only to make an ABR Loan when an Affected Eurodollar Loan is
requested (to the extent otherwise permitted by subsection 4.2), (c) such
Lender's Loans then outstanding as Affected Eurodollar Loans, if any, shall be
converted automatically to ABR Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law (to the extent otherwise permitted by subsection 4.2)
and (d) such Lender's Loans then outstanding as Affected Eurodollar Loans, if
any, not otherwise permitted to be converted to ABR Loans by subsection 4.2
shall, upon notice to the Borrower, be prepaid with accrued interest thereon on
the last day of the then current Interest Period with respect thereto (or such
earlier date as may be required by any such Requirement of Law). If any such
conversion or prepayment of an Affected Eurodollar Loan occurs on a day which is
not the last day of the then current Interest Period with respect thereto, the
applicable Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 4.12.
4.10 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof
applicable to any Lender, or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the Effective Date
(or, if later, the date on which such Lender becomes a Lender):
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Application or any
Eurodollar Loans made by it or its obligation to make Eurodollar Loans,
or change the basis of taxation of payments to such Lender in respect
thereof (except for Non Excluded Taxes covered by subsection 4.11
(including Non-Excluded Taxes imposed solely by reason of any failure
of such Lender to comply with its obligations (if any) under subsection
4.11(b)) and changes in taxes measured by or imposed upon the overall
net income, or franchise taxes, or taxes measured by or imposed upon
overall capital or net worth, or branch taxes (in the case of such
capital, net worth or branch taxes, imposed in lieu of such net income
tax), of such Lender or its applicable lending office, branch, or any
affiliate thereof);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
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and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Administrative Agent, in accordance herewith, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable with
respect to such Eurodollar Loans or Letters of Credit, provided that, in any
such case, the Borrower may elect to convert Eurodollar Loans made by such
Lender hereunder to ABR Loans (to the extent otherwise permitted by subsection
4.2) by giving the Administrative Agent at least one Business Day's notice of
such election, in which case such Borrower shall promptly pay to such Lender,
upon demand, without duplication, amounts theretofore required to be paid to
such Lender pursuant to this subsection 4.10(a) and such amounts, if any, as may
be required pursuant to subsection 4.12. If any Lender becomes entitled to claim
any additional amounts pursuant to this subsection, it shall provide prompt
notice thereof to the Borrower, through the Administrative Agent, certifying (x)
that one of the events described in this paragraph (a) has occurred and
describing in reasonable detail the nature of such event, (y) as to the
increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in each case, made subsequent to the Effective Date (or, if later,
the date on which such Lender becomes a Lender), does or shall have the effect
of reducing the rate of return on such Lender's or such corporation's capital as
a consequence of such Lender's obligations hereunder or under or in respect of
any Letter of Credit to a level below that which such Lender or such corporation
could have achieved but for such change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time,
within ten Business Days after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a written request therefor certifying (x)
that one of the events described in this paragraph (b) has occurred and
describing in reasonable detail the nature of such event, (y) as to the
reduction of the rate of return on capital resulting from such event and (z) as
to the additional amount or amounts demanded by such Lender or corporation and a
reasonably detailed explanation of the calculation thereof, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or corporation for such reduction. Such a certificate as to any
additional amounts payable pursuant to this subsection submitted by such Lender,
through the Administrative Agent, to the Borrower shall
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be conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
4.11 Taxes. (a) Except as provided below in this subsection,
all payments made by the Borrower under this Agreement and any Notes shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding taxes
measured by or imposed upon the overall net income of any Lender or its
applicable lending office, or any branch or affiliate thereof, and all franchise
taxes, branch taxes, taxes on doing business or taxes measured by or imposed
upon the overall capital or net worth of any Lender or its applicable lending
office, or any branch or affiliate thereof, in each case imposed: (i) by the
jurisdiction under the laws of which such Lender, applicable lending office,
branch or affiliate is organized or is located, or in which its principal
executive office is located, or any nation within which such jurisdiction is
located or any political subdivision thereof; or (ii) by reason of any
connection between the jurisdiction imposing such tax and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its obligations
under, or received payment under or enforced, this Agreement or any Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder or under any
Notes, the amounts so payable to the Administrative Agent or such Lender shall
be increased to the extent necessary to yield to the Administrative Agent or
such Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and any Notes, provided, however, that the Borrower shall be entitled
to deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof, as the case may be if
such Lender fails to comply with the requirements of paragraph (b) of this
subsection. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter the Borrower shall send to the Administrative
Agent for its own account or for the account of such Lender, as the case may be,
a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
(b) (1) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:
(X) (i) on or before the date of any payment by the Borrower
under this Agreement or any Notes to such Lender, deliver to the
Borrower and the
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Administrative Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, certifying that it is entitled to receive
payments under this Agreement and any Notes without deduction or
withholding of any United States federal income taxes and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be, certifying that it is entitled to an exemption from
United States backup withholding tax;
(ii) deliver to the Borrower and the Administrative
Agent two further copies of any such form or certification on or before
the date that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested by
the Borrower or the Administrative Agent; or
(Y) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code, (i) represent to the
Borrower (for the benefit of the Borrower and the Administrative Agent)
that it is not a bank within the meaning of Section 881(c)(3)(A) of the
Code, (ii) agree to furnish to the Borrower on or before the date of
any payment by the Borrower, with a copy to the Administrative Agent,
(A) a certificate substantially in the form of Exhibit J (any such
certificate a "U.S. Tax Compliance Certificate") and (B) two accurate
and complete original signed copies of Internal Revenue Service Form
W-8, or successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption from U.S.
withholding tax under the provisions of Section 881(c) of the Code with
respect to payments to be made under this Agreement and any Notes (and
to deliver to the Borrower and the Administrative Agent two further
copies of such form on or before the date it expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recently provided form and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or the
Administrative Agent for filing and completing such forms), and (iii)
agree, to the extent legally entitled to do so, upon reasonable request
by the Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Administrative Agent) such other forms as may be
reasonably required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to payments under
this Agreement and any Notes, provided that in determining the
reasonableness of a request under this clause (iii) such Lender shall
be entitled to consider the cost (to the extent unreimbursed by the
Borrower) which would be imposed on such Lender of complying with such
request;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and
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such Lender so advises the Borrower and the Administrative Agent. Each Person
that shall become a Lender or a Participant pursuant to subsection 11.6 shall,
upon the effectiveness of the related transfer, be required to provide all of
the forms, certifications and statements required pursuant to this subsection,
provided that in the case of a Participant the obligations of such Participant
pursuant to this paragraph (b) shall be determined as if such Participant were a
Lender except that such Participant shall furnish all such required forms,
certifications and statements to the Lender from which the related participation
shall have been purchased.
4.12 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment or conversion of Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a payment or prepayment of Eurodollar Loans or the conversion of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or converted, or not so borrowed, converted or continued, for the
period from the date of such prepayment or conversion or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Margin included therein, if any) over (ii)
the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Lender on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank eurodollar market. If
any Lender becomes entitled to claim any amounts under the indemnity contained
in this subsection 4.12, it shall provide prompt notice thereof to the Borrower,
through the Administrative Agent, certifying (x) that one of the events
described in clause (a), (b) or (c) has occurred and describing in reasonable
detail the nature of such event, (y) as to the loss or expense sustained or
incurred by such Lender as a consequence thereof and (z) as to the amount for
which such Lender seeks indemnification hereunder and a reasonably detailed
explanation of the calculation thereof. Such a certificate as to any
indemnification pursuant to this subsection submitted by such Lender, through
the Administrative Agent, to the Borrower shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
4.13 Certain Rules Relating to the Payment of Additional
Amounts. (a) Upon the request, and at the expense, of the Borrower, each Lender
to which the Borrower is required to pay any additional amount pursuant to
subsection 4.10 or 4.11, and any Participant in respect of whose participation
such payment is required, shall reasonably afford the Borrower the opportunity
to contest, and reasonably cooperate with the Borrower in contesting, the
imposition of any Non-Excluded Tax giving rise to such payment; provided
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that (i) such Lender shall not be required to afford the Borrower the
opportunity to so contest unless the Borrower shall have confirmed in writing to
such Lender its obligation to pay such amounts pursuant to this Agreement and
(ii) the Borrower shall reimburse such Lender for its reasonable attorneys' and
accountants' fees and disbursements incurred in so cooperating with the Borrower
in contesting the imposition of such Non-Excluded Tax; provided, however that
notwithstanding the foregoing no Lender shall be required to afford the Borrower
the opportunity to contest, or cooperate with the Borrower in contesting, the
imposition of any Non-Excluded Taxes, if such Lender in its sole discretion in
good faith determines that to do so would have an adverse effect on it.
(b) If a Lender changes its applicable lending office (other
than pursuant to paragraph (c) below) and the effect of such change, as of the
date of such change, would be to cause the Borrower to become obligated to pay
any additional amount under subsection 4.10 or 4.11, the Borrower shall not be
obligated to pay such additional amount.
(c) If a condition or an event occurs which would, or would
upon the passage of time or giving of notice, result in the payment of any
additional amount to any Lender by the Borrower pursuant to subsection 4.10 or
4.11, such Lender shall promptly notify the Borrower and the Administrative
Agent and shall take such steps as may reasonably be available to it to mitigate
the effects of such condition or event (which shall include efforts to rebook
the Loans held by such Lender at another lending office, or through another
branch or an affiliate, of such Lender); provided that such Lender shall not be
required to take any step that, in its reasonable judgment, would be materially
disadvantageous to its business or operations or would require it to incur
additional costs (unless such Borrower agrees to reimburse such Lender for the
reasonable incremental out-of-pocket costs thereof).
(d) If the Borrower shall become obligated to pay additional
amounts pursuant to subsection 4.10 or 4.11 and any affected Lender shall not
have promptly taken steps necessary to avoid the need for payments under
subsection 4.10 or 4.11, the Borrower shall have the right, for so long as such
obligation remains, (x) with the assistance of the Administrative Agent, to seek
one or more substitute Lenders reasonably satisfactory to the Administrative
Agent and the Borrower to purchase the affected Loan, in whole or in part, at an
aggregate price no less than such Loan's principal amount plus accrued interest,
and assume the affected obligations under this Agreement, or (y) upon at least
four Business Days irrevocable notice to the Administrative Agent, to prepay the
affected Loan, in whole or in part, subject to subsection 4.12, without premium
or penalty. In the case of the substitution of a Lender, the Borrower, the
Administrative Agent, the affected Lender, and any substitute Lender shall
execute and deliver an appropriately completed Assignment and Acceptance
pursuant to subsection 11.6(c) to effect the assignment of rights to, and the
assumption of obligations by, the substitute Lender; provided that any fees
required to be paid by subsection 11.6(e) in connection with such assignment
shall be paid by the Borrower or the substitute Lender. In the case of a
prepayment of an affected Loan, the amount specified in the notice shall be due
and payable on the date specified therein, together with any accrued interest to
such date on the amount prepaid. In the case of each of the substitution of a
Lender and of the prepayment of an affected Loan, the Borrower shall first pay
the affected Lender any
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additional amounts owing under subsections 4.10 and 4.11 (as well as any
commitment fees and other amounts then due and owing to such Lender, including,
without limitation, any amounts under subsection 4.13) prior to such
substitution or prepayment.
(e) If the Administrative Agent or any Lender or any
Participant receives a refund directly attributable to taxes for which the
Borrower has made additional payments pursuant to subsection 4.10(a) or 4.11(a),
the Administrative Agent or such Lender, as the case may be, shall promptly pay
such refund (together with any interest with respect thereto received from the
relevant taxing authority) to the Borrower, provided, however, that the Borrower
agrees promptly to return such refund (together with any interest with respect
thereto due to the relevant taxing authority) (free of all Non-Excluded Taxes)
to the Administrative Agent or the applicable Lender, as the case may be, upon
receipt of a notice that such refund is required to be repaid to the relevant
taxing authority.
(f) The obligations of a Lender or Participant under this
subsection 4.13 shall survive the termination of this Agreement and the payment
of the Loans and all amounts payable hereunder.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and each Lender to make the
Extensions of Credit requested to be made by it on the Effective Date and on
each Borrowing Date thereafter, the Borrower hereby represents and warrants, on
the Effective Date (both before and after giving effect to the Transactions),
and on every Borrowing Date thereafter, to the Administrative Agent and each
Lender that:
5.1 Financial Condition. (a) The audited combined balance
sheets of the Borrower and its combined Subsidiaries as of February 28, 1994,
February 28, 1995 and February 29, 1996 and the audited combined statements of
earnings, statements of shareholders' equity and statements of cash flows for
the years ended February 28, 1994, February 28, 1995 and February 29, 1996 have
heretofore been furnished to each Lender. Such financial statements (including
the notes thereto) (i) have been audited by Coopers & Xxxxxxx L.L.P., (ii) have
been prepared in accordance with GAAP consistently applied throughout the
periods covered thereby and (iii) present fairly, in all material respects, the
combined financial condition, results of operations and cash flows of the
Borrower and its combined Subsidiaries as of such dates and for such periods.
During the period from February 29, 1996 to and including the Effective Date,
except as provided in the Transaction Documents, there has been no sale,
transfer or other disposition by GII and its combined Subsidiaries of any
material part of the business or property of GII and its combined Subsidiaries,
taken as a whole, and no purchase or other acquisition by any of them of any
business or property (including any Capital Stock of any other Person) material
in relation to the combined financial condition of GII and its combined
Subsidiaries, taken as a whole, in each case, which is not reflected in the
foregoing financial statements or in the notes thereto
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and has not otherwise been disclosed in a writing to the Lenders on or prior to
the Effective Date.
(b) The pro forma balance sheet of the Borrower and its
consolidated Subsidiaries (the "Pro Forma Balance Sheet"), copies of which have
heretofore been furnished to each Lender, is the balance sheet of the Borrower
and its consolidated Subsidiaries as of November 30, 1996 (the "Pro Forma
Date"), adjusted to give effect (as if such events had occurred on such date) to
(i) the consummation of the Acquisition and the other transactions contemplated
by the Acquisition Documents, (ii) the consummation of the Merger, (iii) the
receipt by the Borrower of at least $57,620,000 in gross cash proceeds from the
making of the GSCP Equity Investments, (iv) the making of the Extensions of
Credit to be made on the Effective Date and the application of the proceeds
thereof as contemplated hereby, and (v) the payment of estimated fees, expenses,
financing costs and estimated tax payments related to the transactions
contemplated hereby and thereby. The Pro Forma Balance Sheet was prepared in
accordance with Article 11 (Pro Forma Financial Information) of Regulation S-X
under the Securities Act.
5.2 No Change; Solvent. Since February 29, 1996, (a) except as
and to the extent disclosed on Schedule 5.2(a) hereto or Schedule 4.10 of the
Stock Purchase Agreement, there has been no development or event relating to or
affecting any Loan Party which has had or would be reasonably expected to have a
Material Adverse Effect (after giving effect to the transactions described in
clauses (i) through (iii) of subsection 5.1(b)) and (b) as of the Effective
Date, after giving effect to the consummation of the transactions described in
clauses (i) through (v) of subsection 5.1(b), the Borrower is Solvent.
5.3 Corporate Existence; Compliance with Law. Each of the Loan
Parties (a) is duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (b) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, except to the extent that the failure to have such legal
right would not be reasonably expected to have a Material Adverse Effect, (c) is
duly qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, other than in such
jurisdictions where the failure to be so qualified and in good standing would
not be reasonably expected to have a Material Adverse Effect, and (d) is in
compliance with all Requirements of Law, except to the extent that the failure
to comply therewith would not, in the aggregate, be reasonably expected to have
a Material Adverse Effect.
5.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents and the Transaction Documents to
which it is a party and, in the case of the
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Borrower, to obtain Extensions of Credit hereunder, and each such Loan Party has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents and the Transaction Documents to which it is a
party and, in the case of the Borrower, to authorize the Extensions of Credit on
the terms and conditions of this Agreement, any Notes and the Applications. No
consent or authorization of, filing with, notice to or other similar act by or
in respect of, any Governmental Authority or any other Person is required to be
obtained or made by or on behalf of any Loan Party in connection with the
execution, delivery, performance, validity or enforceability of the Loan
Documents or Transaction Documents to which it is a party or, in the case of the
Borrower, with the Extensions of Credit hereunder, except for (i) consents,
authorizations, notices and filings described in Schedule 5.4, all of which have
been obtained or made prior to the Effective Date, (ii) filings to perfect the
Liens created by the Security Documents, (iii) filings pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727 et seq.),
in respect of Accounts Receivable of the Borrower and its Subsidiaries the
obligor in respect of which is the United States of America or any department,
agency or instrumentality thereof and (iv) consents, authorizations, notices and
filings which the failure to obtain or make would not reasonably be expected to
have a Material Adverse Effect. This Agreement has been duly executed and
delivered by the Borrower, and each other Loan Document and Transaction Document
to which any Loan Party is a party will be duly executed and delivered on behalf
of such Loan Party. This Agreement constitutes a legal, valid and binding
obligation of the Borrower, and each other Loan Document and Transaction
Document to which any Loan Party is a party when executed and delivered will
constitute a legal, valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
5.5 No Legal Bar. The execution, delivery and performance of
the Loan Documents and the Transaction Documents by any of the Loan Parties, the
Extensions of Credit hereunder and the use of the proceeds thereof (a) will not
violate any Requirement of Law or Contractual Obligation of such Loan Party in
any respect that would reasonably be expected to have a Material Adverse Effect
and (b) will not result in, or require, the creation or imposition of any Lien
(other than the Liens permitted by subsection 8.3) on any of its properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation.
5.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against Holdings or any of
their respective Subsidiaries or against any of their respective properties or
revenues, (a) except as described on Schedule 5.6 hereto and Schedule 4.15 to
the Stock Purchase Agreement, which is so pending or threatened at any time on
or prior to the Effective Date and relates to any of the Loan Documents or the
Transaction Documents or any of the transactions contemplated hereby or thereby
or (b) which would be reasonably expected to have a Material Adverse Effect.
5.7 No Default. Neither the Borrower nor Holdings or any of
their respective Subsidiaries is in default under or with respect to any of its
Contractual Obligations including under the Senior Subordinated Credit Agreement
and the Senior Subordinated Notes in any
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respect which would be reasonably expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Each of the Borrower,
Holdings and their Subsidiaries has good record and marketable title in fee
simple to, or a valid leasehold interest in, all its material real property, and
good title to, or a valid leasehold interest in, all its other material
property, and none of such property is subject to any Lien, except for Liens
permitted by subsection 8.3.
5.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or has the legal right to use, all United States patents,
patent applications, trademarks, trademark applications, tradenames, copyrights,
technology, know-how and processes necessary for each of them to conduct its
business as currently conducted (the "Intellectual Property") except for those
the failure to own or have such legal right to use would not be reasonably
expected to have a Material Adverse Effect. Except as provided on Schedule 5.9,
no claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower know of
any such claim, and, to the knowledge of the Borrower the use of such
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements which in the
aggregate, would not be reasonably expected to have a Material Adverse Effect.
5.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Borrower, Holdings or any of their Subsidiaries
would be reasonably expected to have a Material Adverse Effect.
5.11 Taxes. To the knowledge of the Borrower, each of Holdings
and its Subsidiaries has filed or caused to be filed all United States federal
income tax returns and all other material tax returns which are required to be
filed and has paid (a) all taxes shown to be due and payable on such returns and
(b) all taxes shown to be due and payable on any assessments of which it has
received notice made against it or any of its property (including, without
limitation, the Mortgaged Properties) and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority and no tax
Lien has been filed, and no claim is being asserted, with respect to any such
tax, fee or other charge (other than any (i) taxes, fees or other charges with
respect to which the failure to pay, in the aggregate, would not have a Material
Adverse Effect or (ii) taxes, fees or other charges the amount or validity of
which are currently being contested in good faith by appropriate proceedings
diligently conducted and with respect to which reserves in conformity with GAAP
have been provided on the books of Holdings or its Subsidiaries, as the case may
be). The preceding sentence shall not apply to any taxes, fees or other charges
which are subject to indemnification by Xxxx XX under the Stock Purchase
Agreement and with respect to which the Borrower has promptly notified the
Administrative Agent upon becoming aware of such failure to file or pay, the
filing of a tax Lien or the assertion of a claim.
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5.12 Federal Regulations. No part of the proceeds of any
Extensions of Credit will be used for any purpose which violates the provisions
of the Regulations of the Board, including, without limitation, Regulation G,
Regulation U, Regulation T or Regulation X of the Board. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form X-0, XX Form U-1 or such other
similar form referred to in Regulation G, Regulation U, Regulation T or
Regulation X of the Board, as the case may be.
5.13 ERISA. During the five year period prior to each date as
of which this representation is made, or deemed made, with respect to any Plan
(or, with respect to (vi) or (viii) below, as of the date such representation is
made or deemed made), none of the following events or conditions, either
individually or in the aggregate, has resulted or is reasonably likely to result
in a Material Adverse Effect: (i) a Reportable Event; (ii) an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA); (iii) any noncompliance with the applicable provisions of ERISA
or the Code; (iv) a termination of a Single Employer Plan (other than a standard
termination pursuant to Section 4041(b) of ERISA); (v) a Lien on the property of
the Borrower or its Subsidiaries in favor of the PBGC or a Plan; (vi) any
Underfunding with respect to any Single Employer Plan; (vii) a complete or
partial withdrawal from any Multiemployer Plan by the Borrower or any Commonly
Controlled Entity; (viii) any liability of the Borrower or any Commonly
Controlled Entity under ERISA if the Borrower or any such Commonly Controlled
Entity were to withdraw completely from all Multiemployer Plans as of the annual
valuation date most closely preceding the date on which this representation is
made or deemed made; or (ix) the Reorganization or Insolvency of any
Multiemployer Plan. There have been no transactions that resulted or could
result in any liability to the Borrower or any Commonly Controlled Entity under
Section 4069 of ERISA or Section 4212(c) of ERISA.
5.14 Collateral. Except with respect to (i) Liens on equipment
constituting fixtures, (ii) any reserved rights of the United States government
as required under law, (iii) Liens upon Patents, Patent Licenses, Trademarks and
Trademark Licenses (as such terms are defined in the Guarantee and Collateral
Agreement) to the extent that (a) such Liens are not otherwise perfected by the
filing of financing statements under the Uniform Commercial Code or by the
filing and acceptance thereof in the United States Patent and Trademark Office
or (b) such Patents, Patent Licenses, Trademarks and Trademark Licenses are not,
individually or in the aggregate, material to the business of the Borrower and
its Subsidiaries taken as a whole, (iv) Liens on uncertificated securities, (v)
Liens on Collateral the perfection of which requires filings in or other actions
under the laws of jurisdictions outside of the United States of America, any
State, territory or dependency thereof or the District of Columbia (except to
the extent that such filings or other actions have been made or taken), (vi)
Liens on contracts or Accounts Receivable on which the United States of America
or any department, agency, or instrumentality thereof is the obligor, (vii)
Liens on Proceeds of Accounts Receivable and Inventory, until transferred to or
deposited in the Collateral Proceeds Account (if any), and (viii) claims of
creditors of Persons receiving goods included as Collateral for "sale or return"
within the meaning of Section 2-326 of the Uniform Commercial Code of the
applicable
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jurisdiction, upon filing of the financing statements delivered to the
Administrative Agent by the Borrower and its Subsidiaries on the Effective Date
in the jurisdictions listed on Part II of Schedule 5.14 (which financing
statements are in proper form for filing in such jurisdictions) and the
recording of the Mortgages (and the recording of the Borrower Patent and
Trademark Security Agreement, and the making of filings after the Effective Date
in any other jurisdiction as may be necessary under any Requirement of Law) and
the delivery to, and continuing possession by, the Administrative Agent of all
Instruments, Chattel Paper and Documents a security interest in which is
perfected by possession, the Liens created pursuant to each Security Document,
when executed and delivered, will constitute valid Liens on and, to the extent
provided therein, perfected security interests in the collateral referred to in
such Security Document (but as to the Copyrights and the Copyright Licenses (as
defined in the Guarantee and Collateral Agreement) and accounts arising
therefrom, only to the extent the Uniform Commercial Code of the relevant
jurisdiction, from time to time in effect, is applicable) in favor of the
Administrative Agent for the benefit of the Lenders, which Liens will be prior
to all other Liens of all other Persons, except for Liens permitted pursuant to
the Loan Documents (including, without limitation, those permitted to exist
pursuant to subsection 8.3), and which Liens are enforceable as such as against
all other Persons (except, with respect to goods only, buyers in the ordinary
course of business to the extent provided in Section 9- 307(1) of the Uniform
Commercial Code as from time to time in effect in the applicable jurisdiction
and except to the extent that recording of an assignment or other transfer of
title to the Administrative Agent in the United States Patent and Trademark
Office may be necessary for such enforceability), except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law). Notwithstanding any other provision of this Agreement,
capitalized terms which are used in this subsection 5.14 and not defined in this
Agreement are so used as defined in the applicable Security Document.
5.15 Investment Company Act; Other Regulations. Neither
Holdings nor the Borrower is an "investment company", or a company "controlled"
by an entity required to be registered as an "investment company", within the
meaning of the Investment Company Act. Neither Holdings nor the Borrower is
subject to regulation under any Federal or State statute or regulation which
limits its ability to incur Indebtedness as contemplated hereby.
5.16 Subsidiaries. Schedule 5.16 sets forth all the
Subsidiaries of the Borrower at the Effective Date, the jurisdiction of their
incorporation and the direct or indirect ownership interest of the Borrower
therein.
5.17 Purpose of Loans. The proceeds of the Term Loans shall be
used to finance the Acquisition and to pay related fees and expenses. The
proceeds of the Revolving Credit Loans shall be used to provide for the working
capital requirements of the Borrower and its operating subsidiaries and for
their general corporate purposes (including the refinancing of existing
indebtedness of the Borrower and the financing of the Acquisition and the fees
and expenses relating thereto).
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5.18 Environmental Matters. Other than exceptions to any of
the following that are set forth in Schedules 4.19(a), 4.19(b), 4.19(c), 4.19(d)
and 4.19(e) of the Stock Purchase Agreement, or that would not, individually or
in the aggregate, reasonably be expected to give rise to a Material Adverse
Effect:
(i) The Borrower and its Subsidiaries: (A) are,
and within the period of all applicable statutes of limitation
have been, in compliance with all applicable Environmental
Laws; (B) hold all Environmental Permits (each of which is in
full force and effect) required for any of their current
operations or for any property owned, leased, or otherwise
operated by any of them and reasonably expect to timely obtain
without material expense all such Environmental Permits
required for planned operations; (C) are, and within the
period of all applicable statutes of limitation have been, in
compliance with all of their Environmental Permits; and (D)
have no reason to believe that any of their Environmental
Permits will not be, or will entail material expense to be,
timely renewed or complied with; any additional Environmental
Permits that may be required of any of them will not be, or
will entail material expense to be, timely granted or complied
with; or that compliance with any Environmental Law that is
applicable to any of them will not be, or will entail material
expense to be, timely attained and maintained.
(ii) Materials of Environmental Concern have not
been transported, disposed of, emitted, discharged, or
otherwise released or threatened to be released, to or at any
real property presently or formerly owned, leased or operated
by the Borrower or any of its Subsidiaries or at any other
location, which could reasonably be expected to (A) give rise
to liability of the Borrower or any of its Subsidiaries under
any applicable Environmental Law, or (B) interfere with the
Borrower's planned or continued operations, or (C) impair the
fair saleable value of any real property owned or leased by
the Borrower or any of its Subsidiaries.
(iii) There is no judicial, administrative, or
arbitral proceeding (including any notice of violation or
alleged violation) under any Environmental Law to which the
Borrower or any of its Subsidiaries is, or to the knowledge of
the Borrower or any of its Subsidiaries will be, named as a
party that is pending or, to the knowledge of the Borrower or
any of its Subsidiaries, threatened.
(iv) Neither the Borrower nor any of its
Subsidiaries has received any written request for information,
or been notified that it is a potentially responsible party,
under the federal Comprehensive Environmental Response,
Compensation, and Liability Act or any similar Environmental
Law, or received any other written request for information
with respect to any Materials of Environmental Concern.
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(v) Neither the Borrower nor any of its
Subsidiaries has entered into or agreed to any consent decree,
order, or settlement or other agreement, nor is subject to any
judgment, decree, or order or other agreement, in any
judicial, administrative, arbitral, or other forum, relating
to compliance with or liability under any Environmental Law.
5.19 No Material Misstatements. The written information,
reports, financial statements, exhibits and schedules furnished by or on behalf
of Holdings, Acquisition Co., GII or the Borrower to the Administrative Agent,
and the Lenders in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto, taken as a whole, did not
contain as of the Effective Date any material misstatement of fact. It is
understood that (x) no representation or warranty is made concerning the
forecasts, estimates, pro forma information, projections and statements as to
anticipated future performance or conditions, and the assumptions on which they
were based, contained in any such information, reports, financial statements,
exhibits or schedules, except that as of the date such forecasts, estimates, pro
forma information, projections and statements were generated, (i) such
forecasts, estimates, pro forma information, projections and statements were
based on the good faith assumptions of the management of the Borrower and (ii)
such assumptions were believed by such management to be reasonable and (y) such
forecasts, estimates, pro forma information and statements, and the assumptions
on which they were based, may or may not prove to be correct.
5.20 Delivery of the Transaction Documents. The Administrative
Agent has received for itself and for each Lender a complete photocopy of each
of the Transaction Documents (including all exhibits, schedules and disclosure
letters referred to therein or delivered pursuant thereto, if any) and all
amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof in any material respect.
5.21 Representations and Warranties Contained in the
Transaction Documents. Each of the Transaction Documents will have been duly
executed and delivered by each of the Loan Parties which is a party thereto
prior to the Effective Date and, to the knowledge of the Borrower, all other
parties thereto and is in full force and effect on the Effective Date. As of the
Effective Date, the representations and warranties of Holdings, the Borrower and
GSCP and, to the knowledge of the Borrower, and any of the other parties thereto
contained in any of the Transaction Documents (after giving effect to any
amendments, supplements, waivers or other modifications of any of the
Transaction Documents prior to the Effective Date in accordance with this
Agreement) and the Senior Subordinated Notes Documents are true and correct in
all material respects except as otherwise disclosed to the Administrative Agent
in writing prior to the Effective Date.
5.22 Labor Matters. There are no strikes pending or, to the
knowledge of the Borrower, reasonably expected to be commenced against the
Borrower or any of its Subsidiaries which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect. The hours worked
and payments made to employees of the Borrower and each of its Subsidiaries have
not been in violation of any applicable laws, rules or
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regulations, except where such violations would not reasonably be expected to
have a Material Adverse Effect. The consummation of the Transactions will not
give rise to a right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which the Borrower or any of
its Subsidiaries (or any predecessor) is a party or by which the Borrower or any
of its Subsidiaries (or any predecessor) is bound.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extension of Credit. This Agreement,
including, without limitation, the agreement of each Lender to make the initial
Extension of Credit requested to be made by it, shall become effective on the
date on which the following conditions precedent shall have been satisfied or
waived:
(a) Loan Documents. Subject to subsections 2.2, 2.7 and 2.9
regarding issuance of notes to individual Lenders, the Administrative
Agent shall have received the following Loan Documents, executed and
delivered as required below, with a copy for each applicable Lender:
(i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower;
(ii) the Guarantee and Collateral Agreement, executed
and delivered by a duly authorized officer of each of Holdings
and the Borrower;
(iii) The Borrower Patent and Trademark Security
Agreement, executed and delivered by a duly authorized officer
of the Borrower;
(iv) each of the Mortgages, executed and delivered by
a duly authorized officer of the Loan Party thereto; and
(v) any Notes requested by the Lenders in accordance
with subsections 2.2, 2.5 and 2.7, executed by a duly
authorized officer of the Borrower.
(b) Subordinated Debt. The Borrower shall have received at
least $75,000,000 in cash from the issuance of senior subordinated debt
pursuant to the Senior Subordinated Credit Agreement.
(c) Corporate Structure. The corporate and capital structure
of each Loan Party after the Acquisition (including as to the ownership
of the voting stock thereof and the voting arrangements with respect to
such stock) shall be reasonably satisfactory in all respects. GSCP and
other investors identified by it and consisting of one or more of
Travelers Insurance Company or affiliates thereof, or funds managed by
any thereof or by GSCP, or otherwise acceptable to the Administrative
Agent, shall have directly
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or indirectly acquired in the Acquisition common stock of Holdings for
at least $44,620,000 in cash and Senior PIK Preferred Stock for
approximately $13,000,000 in cash (collectively, the "GSCP Equity
Investment"). Holdings shall have acquired common stock of Acquisition
Co. or the Borrower for, or shall otherwise have contributed to common
equity of Acquisition Co. or the Borrower, the full amount of the GSCP
Equity Investment.
(d) Acquisition. The Acquisition shall have been consummated
simultaneously with the closing hereof on terms and conditions
reasonably satisfactory to the Administrative Agent and pursuant to the
Acquisition Documentation and no material provision thereof shall have
been waived by GSCP, amended, supplemented or otherwise modified
(except as may be so reasonably satisfactory to the Administrative
Agent).
(e) Fees. The Administrative Agent and the Arranger shall have
received all fees and expenses required, and as agreed to in writing,
to be paid no later than immediately after the consummation of the
Transactions, and in any event no later than close of business on the
Effective Date.
(f) Governmental Approvals. All governmental and third party
approvals (including landlords' and other consents) necessary or
reasonably advisable in connection with the Acquisition, the financing
contemplated hereby and the continuing operations of the Borrower and
its subsidiaries shall have been obtained and be in full force and
effect, and all applicable waiting periods under applicable law shall
have expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise impose
material adverse conditions on the Acquisition or the financing
thereof.
(g) Financial Statements. The Lenders shall have received (i)
reasonably satisfactory audited consolidated and consolidating
financial statements of the Borrower for the three most recent fiscal
years ended prior to the Effective Date accompanied by an audit report
from Coopers & Xxxxxxx, Xxxxxx Xxxxxxxx or another accounting firm
reasonably satisfactory to the Lenders, (ii) reasonably satisfactory
unaudited interim consolidated and consolidating financial statements
of the Borrower for each fiscal quarterly period ended subsequent to
the date of the latest financial statements delivered pursuant to
clause (i) of this paragraph for which such unaudited financial
statements are available and (iii) reasonably satisfactory unaudited
monthly financial statements for the Borrower for each fiscal month
ended subsequent to the date of the date of quarterly financial
statements delivered pursuant to clause (ii) of this paragraph for
which such unaudited financial statements are available.
(h) Pro forma Balance Sheet. The Lenders shall have received a
reasonably satisfactory pro forma consolidated balance sheet of the
Borrower as of the most recent fiscal quarter-end prior to the
Effective Date for which quarterly financial statements of the Borrower
are available, and after giving effect to the consummation on
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the Effective Date of the Acquisition and the financings contemplated
hereby (including any related schedules required by the SEC). The
Lenders shall be reasonably satisfied with respect to all material and
direct contingent liabilities of the Borrower after the Acquisition,
including any indebtedness or guarantees thereof and any tax and
similar governmental liabilities. The existing indebtedness of the
Borrower that shall continue after the Effective Date shall not exceed
$380,000.
(i) EBITDA Report. The Lenders shall have received a report
from the Borrower, in a form consistent with the projections previously
provided to Chase, confirming that the Consolidated EBITDA of the
Borrower for the twelve months ended October 31, 1996 (as adjusted to
include certain non-recurring costs and allocation of certain stand
alone costs, as reasonably identified by the Borrower) was at least
$22,800,000.
(j) Fees and Expenses. The Administrative Agent shall have
received reasonably satisfactory evidence that the fees and expenses to
be incurred by the Borrower in connection with the Acquisition and the
financing thereof (including this Agreement, the Senior Subordinated
Credit Agreement and the Senior Subordinated Notes) shall not exceed
$13,750,000 in the aggregate.
(k) Environmental Report. The Lenders shall have received a
reasonably satisfactory environmental report with respect to the real
property owned or leased by the Borrower and its subsidiaries, from
O'Brien & Xxxx or another firm reasonably satisfactory to the
Administrative Agent.
(l) Solvency. The Lenders shall have received a reasonably
satisfactory opinion as to the solvency of the Borrower after the
consummation of the Acquisition and the other transactions contemplated
hereby, from Appraisal Economics Inc. or another firm reasonably
satisfactory to the Administrative Agent.
(m) No Material Change. There shall not have occurred or
become known to any Lender any material adverse condition or material
adverse change in or affecting the business, operations, property,
condition (financial or otherwise) or prospects of the Borrower and its
subsidiaries taken as a whole.
(n) Lien Searches. The Administrative Agent shall have
received the results of a recent search by a Person reasonably
satisfactory to the Administrative Agent, of the Uniform Commercial
Code, judgment and tax lien filings which may have been filed with
respect to personal property of the Borrower and its Subsidiaries in
any of the jurisdictions set forth in Part I of Schedule 5.14, and the
results of such search shall not reveal any liens other than liens
permitted by subsection 8.3.
(o) Legal Opinions. The Administrative Agent shall
have received, with a photocopy for each Lender, the
following executed legal opinions:
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(i) the executed legal opinion of Debevoise &
Xxxxxxxx, special counsel to each of Acquisition Co., the
Borrower and the other Loan Parties, substantially in the form
of Exhibit I-1;
(ii) the executed legal opinions of special local
counsel in the jurisdictions set forth in Schedule 6.1(o) with
respect to collateral security matters, each in form and
substance reasonably satisfactory to the Administrative Agent;
and
(iii) the executed legal opinion of Xxxxxx,
Xxxxxxxxx & Xxxxxxxxx, special intellectual property counsel
to the Lenders, in form and substance reasonably satisfactory
to the Administrative Agent.
In addition, the Administrative Agent shall have received, with a
photocopy for each Lender, the legal opinions referred to in Section
10.8 of the Stock Purchase Agreement.
(p) Actions to Perfect Liens. The Administrative Agent shall
have received evidence in form and substance reasonably satisfactory to
it that all filings, recordings, registrations and other actions,
including, without limitation, the filing of duly executed financing
statements on Form UCC-1 in each jurisdiction set forth on Schedule
5.14, necessary or, in the reasonable opinion of the Administrative
Agent, advisable to perfect the Liens created by the Security Documents
shall have been completed or shall be ready to be completed promptly
following the Effective Date, and all agreements, statements and other
documents relating thereto shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(q) Pledged Stock; Stock Powers; Pledged Notes; Endorsements.
The Administrative Agent shall have received:
(i) the certificates representing the Pledged
Stock under (and as defined in) the Guarantee and Collateral
Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of
the pledgor thereof; and
(ii) the promissory notes representing each of
the Pledged Notes under (and as defined in) the Guarantee and
Collateral Agreement, duly endorsed as required by the
Guarantee and Collateral Agreement.
The Loan Parties shall have taken such other action as is reasonably
satisfactory to the Administrative Agent to perfect the security
interests created by the Guarantee and Collateral Agreement.
(r) Surveys. The Administrative Agent shall have received, and
the title insurance company issuing the policy referred to in
subsection 6.1(s) (the "Title
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Insurance Company") shall have received, maps or plats of an as-built
survey of the sites of each of the Mortgaged Properties certified to
the Administrative Agent and the Title Insurance Company in a manner
reasonably satisfactory to them, dated a date reasonably satisfactory
to the Administrative Agent and the Title Insurance Company by an
independent professional licensed land surveyor reasonably satisfactory
to the Administrative Agent and the Title Insurance Company, which maps
or plats and the surveys on which they are based shall be made in
accordance with the Minimum Standard Detail Requirements for Land Title
Surveys jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in 1992,
and, without limiting the generality of the foregoing, there shall be
surveyed and shown on such maps, plats or surveys the following: (i)
the locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (ii) the lines
of streets abutting the sites and width thereof; (iii) all access and
other easements appurtenant to the sites necessary to use the sites;
(iv) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the sites,
whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (v) any encroachments on any adjoining
property by the building structures and improvements on the sites; and
(vi) if the site is described as being on a filed map, a legend
relating the survey to said map.
(s) Title Insurance Policy. The Administrative Agent shall
have received in respect of each of the Mortgaged Properties a
mortgagee's title policy (or policies) or marked up unconditional
binder for such insurance dated the Effective Date. Each such policy
shall (i) be in an amount reasonably satisfactory to the Administrative
Agent; (ii) insure that the Mortgage insured thereby creates a valid
first Lien on the Mortgaged Property encumbered thereby free and clear
of all defects and encumbrances, except those permitted by subsection
8.3 and such as may be approved by the Administrative Agent; (iii) name
the Administrative Agent for the benefit of the Lenders as the insured
thereunder; (iv) be in the form of an ALTA Loan Policy; (v) contain
such endorsements and affirmative coverage as the Administrative Agent
may reasonably request; provided that, in the case of zoning
endorsements, if any, no additional premiums will be required in excess
of $2,000 per property, (vi) be issued by title companies reasonably
satisfactory to the Administrative Agent (including any such title
companies acting as reinsurers, at the option of the Administrative
Agent) and (vii) be issued at ordinary rates (other than with respect
to affirmative insurance). The Administrative Agent shall have received
evidence reasonably satisfactory to it that all premiums in respect of
each such policy, and all charges for mortgage recording tax, if any,
have been paid. The Administrative Agent shall have also received a
copy of all recorded documents referred to, or listed as exceptions to
title in, the title policy or policies referred to in this subsection
and a copy, certified by such parties as the Administrative Agent may
deem reasonably appropriate, of all other documents affecting the
property covered by each Mortgage as shall have been reasonably
requested by the Administrative Agent.
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(t) Borrowing Certificate. The Administrative Agent shall have
received, with a photocopy for each Lender, (a)(i) a certificate of the
Borrower, dated the Effective Date, substantially in the form of
Exhibit I-1 and (ii) Borrowing Base Certificate, with appropriate
insertions and attachments, reasonably satisfactory in form and
substance to the Administrative Agent, executed by a Responsible
Officer and the Secretary or any Assistant Secretary of the Borrower
and (b) a report on the accounts receivable and inventory of the
Borrower from the Administrative Agent's collateral review group to be
included with the Borrowing Base, reasonably satisfactory in form and
substance to the Administrative Agent.
(u) Corporate Proceedings of the Loan Parties. The
Administrative Agent shall have received, with a photocopy for each
Lender, a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the board of directors of
each Loan Party authorizing, as applicable, (i) the execution, delivery
and performance of this Agreement, any Notes and the other Loan
Documents and the Transaction Documents to which it is or will be a
party as of the Effective Date, (ii), in the case of the Borrower, the
Extensions of Credit to the Borrower and (iii) the granting by it of
the Liens to be created pursuant to the Security Documents to which it
is or will be a party as of the Effective Date, certified by the
Secretary or an Assistant Secretary of such Loan Party as of the
Effective Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended, modified
(except as any later such resolution may modify any earlier such
resolution), revoked or rescinded and are in full force and effect.
(v) Incumbency Certificates of the Loan Parties. The
Administrative Agent shall have received, with a photocopy for each
Lender, a certificate of each Loan Party, dated the Effective Date, as
to the incumbency and signature of the officers of such Loan Party
executing any Loan Document, reasonably satisfactory in form and
substance to the Administrative Agent, executed by a Responsible
Officer and the Secretary or any Assistant Secretary of such Loan
Party.
(w) Governing Documents. The Administrative Agent shall have
received, with a photocopy for each Lender, copies of the certificate
or articles of incorporation and by-laws (or other similar governing
documents serving the same purpose) of each Loan Party, certified as of
the Effective Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of such Loan Party.
(x) Insurance. The Administrative Agent shall have received
evidence in form and substance reasonably satisfactory to it that all
of the requirements of subsection 7.5 of this Agreement and Section 5
of each Mortgage shall have been satisfied.
(y) Flood Insurance. With respect to any of the Mortgaged
Properties which is located in an area identified by the Secretary of
Housing and Urban Development as having special flood hazards, the
Administrative Agent shall have delivered notice(s)
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to, and received acknowledgement from, the relevant Loan Party as
required pursuant to Section 208.8(e)(3) of Regulation H of the Board.
The making of the initial Extensions of Credit by the Lenders hereunder shall
conclusively be deemed to constitute an acknowledgement by the Administrative
Agent and each Lender that each of the conditions precedent set forth in this
subsection 6.1 shall have been satisfied in accordance with its respective terms
or shall have been irrevocably waived by such Person.
6.2 Conditions to Each Other Extension of Credit. The
agreement of each Lender to make any Extension of Credit requested to be made by
it on any date (including, without limitation, the initial Extension of Credit
and each Swing Line Loan) is subject to the satisfaction or waiver of the
following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party pursuant to this
Agreement or any other Loan Document (or in any amendment, modification
or supplement hereto or thereto) to which it is a party, and each of
the representations and warranties contained in any certificate
furnished at any time by or on behalf of any Loan Party pursuant to
this Agreement or any other Loan Document, shall, except to the extent
that they relate to a particular date, be true and correct in all
material respects on and as of such date as if made on and as of such
date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Extensions of Credit requested to be made on such date.
(c) Letter of Credit Application. With respect to the issuance
of any Letter of Credit, the Issuing Lender shall have received an
Application, completed to its satisfaction, and such other
certificates, documents and other papers and information as the Issuing
Lender may reasonably request.
Each borrowing by and Letter of Credit issued on behalf of any Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such borrowing or such issuance that the conditions contained in
this subsection 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, from and after the Effective
Date and so long as the Revolving Credit Commitments remain in effect, and
thereafter until payment in full of the Loans, all Reimbursement Obligations and
any other amount then due and owing to any Lender or the Administrative Agent
hereunder and under any Note and termination or expiration of all Letters of
Credit, the Borrower shall and (except in the case of delivery of financial
information, reports and notices) shall cause each of its Subsidiaries to:
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7.1 Financial Statements. Furnish to the Administrative Agent
for delivery to each Lender (and the Administrative Agent agrees to make and so
deliver such copies):
(a) as soon as available, but in any event not later than the
90th day following the end of each fiscal year of the Borrower ending
on or after the Effective Date, a copy of the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such year and the related consolidated statements of operations,
changes in common stockholders' equity and cash flows for such year,
setting forth in each case, in comparative form the figures for and as
of the end of the previous year, reported on without a "going concern"
or like qualification or exception, or qualification arising out of the
scope of the audit, by Xxxxxx Xxxxxxxx LLP or other independent
certified public accountants of nationally recognized standing not
unacceptable to the Administrative Agent in its reasonable judgment;
(b) as soon as available, but in any event not later than the
45th day following the end of each of the first three quarterly periods
of each fiscal year of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter and the related unaudited consolidated statements of
operations and cash flows of the Borrower and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth, in comparative form the
budgeted figures (as adjusted consistent with past practice) for the
relevant period and the figures for the corresponding period of the
previous fiscal year, certified by a Responsible Officer of the
Borrower as being fairly stated in all material respects (subject to
normal year-end audit and other adjustments); and
(c) as soon as available, but in any event not later than the
30th day following the end of each fiscal month of each fiscal year of
the Borrower (or the 45th day in the case of any such month ending on
the last day of a fiscal quarter), an unaudited consolidated balance
sheet for Borrower and its consolidated Subsidiaries as at the end of
such month and a related unaudited consolidated income statement,
setting forth in comparative form the figures as at the end of the
corresponding fiscal month of the previous fiscal year and, in the case
of such income statement, in comparative form the figures for the
corresponding fiscal month of the previous fiscal year;
all such financial statements delivered pursuant to subsection 7.1(a) or (b) to
be (and, in the case of any financial statements delivered pursuant to
subsection 7.1(b) shall be certified by a Responsible Officer of the Borrower as
being) complete and correct in all material respects in conformity with GAAP and
to be (and, in the case of any financial statements delivered pursuant to
subsection 7.1(b) shall be certified by a Responsible Officer of the Borrower as
being) prepared in reasonable detail in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
that began on or after the Effective Date (except as approved by such
accountants or officer, as the case may be, and disclosed therein, and except,
in the case of any financial statements delivered pursuant to subsection 7.1(b),
for the absence of certain notes).
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7.2 Certificates; Other Information. Furnish to the
Administrative Agent for delivery to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the audit necessary therefor no knowledge was
obtained of any Default or Event of Default insofar as the same relates
to any financial accounting matters covered by their audit, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements
and reports referred to in subsections 7.1(a) and (b), a certificate
signed by a Responsible Officer of the Borrower (i) stating that, to
the best of such Responsible Officer's knowledge, the Borrower and its
Subsidiaries during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition,
contained in this Agreement, any Notes or the other Loan Documents to
which it is a party to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of any Default
or Event of Default, except, in each case, as specified in such
certificate, and (ii) setting forth the calculations required to
determine (A) compliance with all covenants set forth in subsection 8.1
(in the case of a certificate furnished with the financial statements
referred to in subsections 7.1(a) and (b)), and (B) compliance with the
covenant set forth in subsection 8.8 (in the case of a certificate
furnished with the financial statements referred to in subsection
7.1(a));
(c) as soon as available, but in any event not later than the
90th day after the beginning of each fiscal year of the Borrower, a
copy of the projections by the Borrower of the operating budget and
cash flow budget of the Borrower and its Subsidiaries for such fiscal
year, such projections to be accompanied by a certificate of a
Responsible Officer of the Borrower to the effect that such Responsible
Officer believes such projections to have been prepared on the basis of
reasonable assumptions;
(d) within five Business Days after the same are sent, copies
of all financial statements and reports which the Borrower sends to its
public security holders, and within five Business Days after the same
are filed, copies of all financial statements and periodic reports
which the Borrower may file with the Securities and Exchange Commission
or any successor or analogous Governmental Authority;
(e) on the 25th day of each calendar month (and at such other
times as the Administrative Agent reasonably may request), a Borrowing
Base Certificate, certified by a Responsible Officer of the Borrower as
being true and accurate in all material respects, setting forth the
Borrower's calculation of the Borrowing Base as of the date specified
in such certificate (which, with respect to the Borrowing Base
Certificate delivered on the 25th day of a calendar month, shall be as
of the last Business Day of the prior calendar month); and
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(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request, including
certificates setting forth calculations showing that the Borrower is in
compliance with subsections 8.2(h), 8.3(j), 8.3(k), 8.4(j), 8.6(g),
8.7(a) and 8.11 of this Agreement.
7.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings diligently conducted and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Borrower or any of its
Subsidiaries, as the case may be.
7.4 Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as conducted by the Borrower and
its Subsidiaries on the Effective Date, taken as a whole, and preserve, renew
and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of the business of the Borrower and its
Subsidiaries, taken as a whole, except as otherwise expressly permitted pursuant
to subsection 8.5, provided that the Borrower and its Subsidiaries shall not be
required to maintain any such rights, privileges or franchises, if the failure
to do so would not reasonably be expected to have a Material Adverse Effect; and
comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith, in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in the business of the Borrower and its Subsidiaries, taken
as a whole, in good working order and condition; maintain with financially sound
and reputable insurance companies insurance on all property material to the
business of the Borrower and its Subsidiaries, taken as a whole, in at least
such amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to the Administrative Agent, upon written request,
information in reasonable detail as to the insurance carried.
7.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, complete and correct
entries in conformity with GAAP and all material Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of any Lender to visit and inspect any of
its properties and examine and, to the extent reasonable, make abstracts from
any of its books and records and to discuss the business, operations, properties
and financial and other condition of the Borrower and its Subsidiaries with
officers and employees of the Borrower and its Subsidiaries and with its
independent certified public accountants, in each case at any reasonable time,
upon reasonable notice, and as often as may reasonably be desired.
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(b) At any time upon the reasonable request of the
Administrative Agent, permit the Administrative Agent or its professionals
(including consultants, accountants and appraisers) retained by the
Administrative Agent to conduct evaluations and appraisals of (i) the Borrower's
practices in the computation of the Borrowing Base, (ii) the assets included in
the Borrowing Base, (iii) systems and procedures relating to the Borrowing Base
items, and (iv) other related procedures deemed necessary by the Administrative
Agent and pay the reasonable fees and expenses thereof in connection therewith
(including, without limitation, the fees and expenses associated with services
performed by the Administrative Agent's Specialized Due Diligence Department);
provided, however, that the Administrative Agent shall not be entitled to
conduct such evaluations and appraisals more frequently than once per year
unless (x) an Event of Default has occurred and is continuing or (y) the
Administrative Agent reasonably determines in consultation with the Borrower
that any material event or material change has occurred with respect to the Loan
Parties, their inventory practices or the performance of the Collateral and that
as a result of such event or change more frequent evaluations or appraisals are
required to effectively monitor the Borrowing Base, in which case the Borrower
will permit the Administrative Agent to conduct such evaluations and appraisals
at such reasonable times and as often as may be reasonably requested, in each
case so long as any Revolving Credit Loans, Swing Line Loans or Letters of
Credit shall be outstanding or shall have been requested by the Borrower
hereunder.
(c) In connection with any evaluation and appraisal relating
to the computation of the Borrowing Base, agree to make such adjustments to its
parameters for including Eligible Inventory and Eligible Accounts Receivable in
the Borrowing Base as the Administrative Agent shall reasonably require based
upon the results of such evaluation and appraisal, provided that the
Administrative Agent shall specify to the Borrower in writing the reasons for
any such additional adjustments.
7.7 Notices. Promptly give notice to the
Administrative Agent and each Lender of:
(a) as soon as possible after a Responsible Officer of the
Borrower knows or reasonably should know thereof, the occurrence of any
Default or Event of Default;
(b) as soon as possible after a Responsible Officer of the
Borrower knows or reasonably should know thereof, any (i) default or
event of default under any Contractual Obligation of the Borrower or
any of its Subsidiaries, other than as previously disclosed in writing
to the Lenders, or (ii) litigation, investigation or proceeding which
may exist at any time between the Borrower or any of its Subsidiaries
and any Governmental Authority, which in either case, if not cured or
if adversely determined, as the case may be, would reasonably be
expected to have a Material Adverse Effect;
(c) as soon as possible after a Responsible Officer of the
Borrower knows or reasonably should know thereof, the occurrence of any
default or event of default under the Senior Subordinated Facility
Documents or Senior Subordinated Notes Documents;
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(d) as soon as possible after a Responsible Officer of the
Borrower knows or reasonably should know thereof, any litigation or
proceeding affecting the Borrower or any of its Subsidiaries in which
the amount involved (not covered by insurance) is $1,000,000 or more or
in which injunctive or similar relief is sought that would reasonably
be expected to have a Material Adverse Effect;
(e) the following events, as soon as possible and in any event
within 30 days after a Responsible Officer of the Borrower or any of
its Subsidiaries knows or reasonably should know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect
to any Single Employer Plan, a failure to make any required
contribution to a Single Employer Plan or Multiemployer Plan, the
creation of any Lien on the property of the Borrower or its
Subsidiaries in favor of the PBGC or a Plan or any withdrawal from, or
the termination, Reorganization or Insolvency of, any Multiemployer
Plan; (ii) the institution of proceedings or the taking of any other
formal action by the PBGC or the Borrower or any of its Subsidiaries or
any Commonly Controlled Entity or any Multiemployer Plan which could
reasonably be expected to result in the withdrawal from, or the
termination, Reorganization or Insolvency of, any Single Employer Plan
or Multiemployer Plan; provided, however, that no such notice will be
required under clause (i) or (ii) above unless the event giving rise to
such notice, when aggregated with all other such events under clause
(i) or (ii) above, could be reasonably expected to result in liability
to the Borrower or its Subsidiaries in an amount that would exceed
$5,000,000; or (iii) the existence of an Underfunding under a Single
Employer Plan that exceeds 10% of the value of the assets of such
Single Employer Plan, in each case, determined as of the most recent
annual valuation date of such Single Employer Plan on the basis of the
actuarial assumptions used to determine the funding requirements of
such Single Employer Plan as of such date;
(f) as soon as possible after a Responsible Officer of the
Borrower knows or reasonably should know thereof, any material adverse
change in the business, operations, property, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole;
(g) as soon as possible after a Responsible Officer of the
Borrower knows or reasonably should know thereof, (i) any release or
discharge by the Borrower or any of its Subsidiaries of any Materials
of Environmental Concern required to be reported under applicable
Environmental Laws to any Governmental Authority, unless the Borrower
reasonably determines that the total Environmental Costs arising out of
such release or discharge are unlikely to exceed $1,000,000 or to have
a Material Adverse Effect; (ii) any condition, circumstance, occurrence
or event not previously disclosed in writing to the Administrative
Agent that could result in liability under applicable Environmental
Laws unless the Borrower reasonably determines that the total
Environmental Costs arising out of such condition, circumstance,
occurrence or event are unlikely to exceed $1,000,000 or to have a
Material Adverse Effect, or could result in the imposition of any lien
or other restriction on the title, ownership or transferability of any
facilities and properties owned, leased or operated by the
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Borrower or any of its Subsidiaries; and (iii) any proposed action to
be taken by the Borrower or any of its Subsidiaries that would
reasonably be expected to subject the Borrower or any of its
Subsidiaries to any material additional or different requirements or
liabilities under Environmental Laws, unless the Borrower reasonably
determines that the total Environmental Costs arising out of such
proposed action are unlikely to exceed $1,000,000 or to have a Material
Adverse Effect; and
(h) as soon as possible after a Responsible Officer of the
Borrower knows or reasonably should know thereof, the failure to make
any rental payment when due and payable with respect to any property
leased by the Borrower or any of its Domestic Subsidiaries at which
Inventory of the Borrower or any of its Domestic Subsidiaries is
located.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer of the Borrower (and, if applicable, the relevant Commonly
Controlled Entity or Subsidiary) setting forth details of the occurrence
referred to therein and stating what action the Borrower (or, if applicable, the
relevant Commonly Controlled Entity or Subsidiary) proposes to take with respect
thereto.
7.8 Environmental Laws. (a) (i) Comply substantially with, and
require substantial compliance by all tenants, subtenants, contractors, and
invitees with, all applicable Environmental Laws; (ii) obtain, comply
substantially with and maintain any and all Environmental Permits necessary for
its operations as conducted and as planned; and (iii) require that all tenants,
subtenants, contractors, and invitees obtain, comply substantially with and
maintain any and all Environmental Permits necessary for their operations as
conducted and as planned, with respect to any property leased or subleased from,
or operated by the Borrower or its Subsidiaries.
(b) Conduct and complete or cause to be conducted and
completed all investigations, studies, sampling and testing, and all remedial,
removal, and other actions required under applicable Environmental Laws; and
promptly comply with all orders and directives of all Governmental Authorities
regarding Environmental Laws, (i) except where non-compliance with any such
order or directive would not reasonably be expected to have a Material Adverse
Effect or (ii) other than any such order or directive as to which an appeal or
other appropriate contest is or has been timely and properly taken, is being
diligently pursued in good faith, and as to which appropriate reserves have been
established in accordance with GAAP, and, if the effectiveness of such order or
directive has not been stayed, the pendency of such appeal or other appropriate
contest does not give rise to a Material Adverse Effect.
(c) Maintain, update as appropriate, and implement in all
material respects an ongoing program to ensure that all the properties and
operations of the Borrower and its Subsidiaries are regularly and reasonably
reviewed by competent professionals to identify and promote compliance with and
to reasonably and prudently manage any liabilities or potential liabilities
under any Environmental Law that may affect the Borrower or any of its
Subsidiaries, including, without limitation, compliance and liabilities relating
to: discharges to
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air and water; acquisition, transportation, storage and use of hazardous
materials; waste disposal; repair, maintenance and improvement of properties;
employee health and safety; species protection; and recordkeeping (the
"Environmental Program").
7.9 After-Acquired Real Property and Fixtures. (a) With
respect to any owned real property or fixtures, in each case with a purchase
price or a fair market value of at least $500,000, in which the Borrower or any
of its Subsidiaries acquires ownership rights at any time after the Effective
Date, promptly grant to the Administrative Agent, for the benefit of the
Lenders, a Lien of record on all such owned real property and fixtures, upon
terms reasonably satisfactory in form and substance to the Administrative Agent
and in accordance with any applicable requirements of any Governmental Authority
(including, without limitation, any required appraisals of such property under
FIRREA); provided that (i) nothing in this subsection 7.9 shall defer or impair
the attachment or perfection of any security interest in any Collateral covered
by any of the Security Documents which would attach or be perfected pursuant to
the terms thereof without action by the Borrower, any of its Subsidiaries or any
other Person and (ii) no such Lien shall be required to be granted as
contemplated by this subsection 7.9 on any owned real property or fixtures the
acquisition of which is financed, or is to be financed within any time period
permitted by subsection 8.2(d) or (e), in whole or in part through the
incurrence of Indebtedness permitted by subsection 8.2(d) or (e), until such
Indebtedness is repaid in full (and not refinanced as permitted by subsection
8.2(d) or (e)) or, as the case may be, the Borrower determines not to proceed
with such financing or refinancing. In connection with any such grant to the
Administrative Agent, for the benefit of the Lenders, of a Lien of record on any
such real property in accordance with this subsection, the Borrower or such
Subsidiary shall deliver or cause to be delivered to the Administrative Agent
any surveys, title insurance policies, environmental reports and other documents
in connection with such grant of such Lien obtained by it in connection with the
acquisition of such ownership rights in such real property or as the
Administrative Agent shall reasonably request (in light of the value of such
real property and the cost and availability of such surveys, title insurance
policies, environmental reports and other documents and whether the delivery of
such surveys, title insurance policies, environmental reports and other
documents would be customary in connection with such grant of such Lien in
similar circumstances).
(b) At its own expense, execute, acknowledge and deliver, or
cause the execution, acknowledgement and delivery of, and thereafter register,
file or record in an appropriate governmental office, any document or instrument
reasonably deemed by the Administrative Agent to be necessary or desirable for
the creation, perfection and priority and the continuation of the validity,
perfection and priority of the foregoing Liens or any other Liens created
pursuant to the Security Documents.
(c) At its own expense, request, and use reasonable efforts to
obtain, (i) within 45 days after the Effective Date, a consent, substantially in
the form of Exhibit J or such other form as may be reasonably satisfactory to
the Administrative Agent, from the landlord of each of the existing facilities
located in the United States and listed in Schedule 7.9(c) in which Inventory of
any Loan Party is located, as of the Effective Date, in which such landlord
acknowledges the Administrative Agent's first priority security interest in the
Inventory
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pledged by each Loan Party to the Administrative Agent for the benefit of the
Lenders and (ii) prior to entering into a lease of a facility located in the
United States in which Inventory will be located on or after the Effective Date
(other than any such facility for which there is not a lease of more than one
year and which the Borrower and its Subsidiaries intends to use as a seasonal
storage facility), a consent, substantially in the form of Exhibit J or such
other form as may be reasonably satisfactory to the Administrative Agent, from
each landlord of any such facility, in which such landlord acknowledges the
Administrative Agent's first priority security interest in the Inventory pledged
by each Loan Party to the Administrative Agent for the benefit of the Lenders.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, from and after the Effective
Date and so long as the Revolving Credit Commitments remain in effect, and
thereafter until payment in full of the Loans, all Reimbursement Obligations and
any other amount then due and owing to any Lender or the Administrative Agent
hereunder and under any Note and termination or expiration of all Letters of
Credit, the Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly:
8.1 Financial Condition Covenants.
(a) Minimum Consolidated EBITDA. Permit the Consolidated
EBITDA of the Borrower for any period of four consecutive fiscal
quarters of the Borrower ending on the dates set forth below to be less
than the amount set forth opposite such date below:
Date Amount
---- ------
May 31, 1997 $20,000,000
August 31, 1997 $20,000,000
November 30, 1997 $20,000,000
February 28, 1998 $20,000,000
May 31, 1998 $21,000,000
August 31, 1998 $21,000,000
November 30, 1998 $21,000,000
February 28, 1999 $21,000,000
May 31, 1999 $22,000,000
August 31, 1999 $22,000,000
November 30, 1999 $22,000,000
February 28, 2000 $22,000,000
May 31, 2000 $23,000,000
August 31, 2000 $23,000,000
November 30, 2000 $24,000,000
February 28, 2001 $24,000,000
May 31, 2001 $25,000,000
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August 31, 2001 $25,000,000
November 30, 2001 $25,000,000
February 28, 2002 $25,000,000
May 31, 2002 $25,000,000
August 31, 2002 $26,000,000
November 30, 2002 $26,000,000
February 28, 2003 $26,000,000
(b) Maintenance of Consolidated Fixed Charges Ratio. Permit,
for any period of four consecutive fiscal quarters of the Borrower
ending on the dates set forth below, the Consolidated Fixed Charges
Ratio at the last day of such consecutive fiscal quarter, to be less
than the ratio set forth opposite such date below:
Date Ratio
---- -----
November 30, 1997 1.00 to 1
February 28, 1998 1.00 to 1
May 31, 1998 1.00 to 1
August 31, 1998 1.00 to 1
November 30, 1998 1.00 to 1
February 28, 1999 1.05 to 1
May 31, 1999 1.05 to 1
August 31, 1999 1.05 to 1
November 30, 1999 1.05 to 1
February 28, 2000 1.05 to 1
May 31, 2000 1.10 to 1
August 31, 2000 1.10 to 1
November 30, 2000 1.10 to 1
February 28, 2001 1.10 to 1
May 31, 2001 1.10 to 1
August 31, 2001 1.10 to 1
November 30, 2001 1.10 to 1
February 28, 2002 1.10 to 1
May 31, 2002 1.10 to 1
August 31, 2002 1.10 to 1
November 30, 2002 1.10 to 1
February 28, 2003 1.10 to 1
(c) Maintenance of Leverage Ratio. Permit, for any period of
four consecutive fiscal quarters of the Borrower ending on the dates
set forth below, the Leverage Ratio of the Borrower to be greater than
the ratio set forth opposite such date below:
Date Ratio
---- -----
May 31, 1997 6.00 to 1
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August 31, 1997 6.00 to 1
November 30, 1997 6.00 to 1
February 28, 1998 6.00 to 1
May 31, 1998 6.00 to 1
August 31, 1998 5.75 to 1
November 30, 1998 5.75 to 1
February 28, 1999 5.50 to 1
May 31, 1999 5.50 to 1
August 31, 1999 5.25 to 1
November 30, 1999 5.25 to 1
February 28, 2000 5.00 to 1
May 31, 2000 4.75 to 1
August 31, 2000 4.75 to 1
November 30, 2000 4.75 to 1
February 28, 2001 4.75 to 1
May 31, 2001 4.00 to 1
August 31, 2001 4.00 to 1
November 30, 2001 4.00 to 1
February 28, 2002 4.00 to 1
May 31, 2002 4.00 to 1
August 31, 2002 4.00 to 1
November 30, 2002 4.00 to 1
February 28, 2003 4.00 to 1
8.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness (including any Indebtedness of any of its
Subsidiaries), except:
(a) Indebtedness of the Borrower under this Agreement and
under any Notes;
(b) Indebtedness under the Senior Subordinated Credit
Agreement or the Senior Subordinated Indenture or evidenced by the
Senior Subordinated Notes; provided that such Indebtedness shall not be
extended, renewed, replaced, refinanced or otherwise amended, except
(x) by the incurrence of Indebtedness under the Senior Subordinated
Indenture or evidenced by Senior Subordinated Notes, or (y), in the
case of amendments, as otherwise permitted by subsection 8.12(c);
(c) Indebtedness of the Borrower to any of its Subsidiaries
and of any Subsidiary to the Borrower or any other Subsidiary;
(d) Indebtedness of the Borrower and any of its Subsidiaries
incurred to finance or refinance the acquisition of fixed or capital
assets (whether pursuant to a loan, a Financing Lease or otherwise)
otherwise permitted pursuant to this Agreement, and any other Financing
Leases, in an aggregate principal amount not exceeding in the aggregate
as to the Borrower and its Subsidiaries $1,000,000 at any one time
outstanding, provided that such Indebtedness is incurred substantially
simultaneously
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with such acquisition or within six months after such acquisition or in
connection with a refinancing thereof;
(e) Indebtedness of the Borrower and any of its Subsidiaries
incurred to finance or refinance the purchase price of, or Indebtedness
of the Borrower and any of its Subsidiaries assumed in connection with
any acquisition otherwise permitted pursuant to this Agreement provided
that (i) such Indebtedness is incurred prior to, substantially
simultaneously with or within six months after such acquisition or in
connection with a refinancing thereof, (ii) if such Indebtedness is
owed to a Person, other than the Person from whom such acquisition is
made or any Affiliate thereof, such Indebtedness shall have terms and
conditions reasonably satisfactory to the Administrative Agent and
shall not exceed 65% of the purchase price of such acquisition
(including any Indebtedness assumed in connection with such
acquisition) and (iii) immediately after giving effect to such
acquisition no Default or Event of Default shall have occurred and be
continuing;
(f) to the extent that any Indebtedness may be incurred or
arise thereunder, Indebtedness of the Borrower and its Subsidiaries
under Permitted Hedging Arrangements;
(g) other Indebtedness outstanding or incurred under
facilities in existence on the Effective Date and listed on Schedule
8.2(g) hereto and Schedule 10.12 of the Stock Purchase Agreement, and
any refinancings, refundings, renewals or extensions thereof on
financial and other terms, in the reasonable judgment of the Borrower,
no more onerous to the Borrower or any of its Subsidiaries in the
aggregate than the financial and other terms of such Indebtedness,
provided that the amount of such Indebtedness is not increased at the
time of such refinancing, refunding, renewal or extension except by an
amount equal to the premium or other amounts paid, and fees and
expenses incurred, in connection with such refinancing, refunding,
renewal or extension;
(h) Indebtedness of Foreign Subsidiaries for working capital
purposes or pursuant to Section 8.6(c) (including in respect of
overdrafts) not exceeding, as to all such Foreign Subsidiaries,
$10,000,000 in aggregate principal amount at any one time outstanding,
provided that such Indebtedness may exceed $10,000,000 but the
Available Revolving Credit Commitments shall be reduced by the amount
by which such Indebtedness exceeds $10,000,000;
(i) to the extent that any Guarantee Obligation permitted
under subsection 8.4 constitutes Indebtedness, such Indebtedness;
(j) Indebtedness of the Borrower or any of its Subsidiaries in
respect of Sale and Leaseback Transactions permitted under subsection
8.11;
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(k) Indebtedness of the Borrower or any of its Subsidiaries
incurred to finance insurance premiums in the ordinary course of
business;
(l) Indebtedness arising from the honoring of a check, draft
or similar instrument against insufficient funds; provided that such
Indebtedness is extinguished within two Business Days of its
incurrence; and
(m) Indebtedness not otherwise permitted by the preceding
clauses of this subsection 8.2 not exceeding $1,000,000 in aggregate
principal amount at any one time outstanding.
With respect to any Indebtedness denominated in a foreign currency, for purposes
of determining compliance with any Dollar-denominated restriction on the
Incurrence of such Indebtedness under this Section 8.2, the amount of such
Indebtedness shall be calculated monthly based on the currency exchange rate in
effect at such time.
8.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes, assessments and similar charges not yet
delinquent or the nonpayment of which in the aggregate would not
reasonably be expected to have a Material Adverse Effect, or which are
being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves with respect thereto are maintained on
the books of the Borrower or its Subsidiaries, as the case may be, in
conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings
diligently conducted;
(c) Liens of landlords or of mortgagees of landlords arising
by operation of law or pursuant to the terms of real property leases,
provided that the rental payments secured thereby are not yet due and
payable;
(d) pledges, deposits or other Liens in connection with
workers' compensation, unemployment insurance, other social security
benefits or other insurance related obligations (including, without
limitation, pledges or deposits securing liability to insurance
carriers under insurance or self-insurance arrangements);
(e) Liens arising by reason of any judgment, decree or order
of any court or other Governmental Authority, if appropriate legal
proceedings which may have been duly initiated for the review of such
judgment, decree or order, are being diligently
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prosecuted and shall not have been finally terminated or the period
within which such proceedings may be initiated shall not have expired;
(f) Liens to secure the performance of bids, trade contracts
(other than for borrowed money), obligations for utilities, leases,
statutory obligations, surety and appeal bonds, performance bonds,
judgment and like bonds, replevin and similar bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(g) zoning restrictions, easements, rights-of-way,
restrictions on the use of property, other similar encumbrances
incurred in the ordinary course of business and minor irregularities of
title which do not materially interfere with the ordinary conduct of
the business of the Borrower and its Subsidiaries taken as a whole;
(h) Liens securing or consisting of Indebtedness of the
Borrower and its Subsidiaries permitted by subsection 8.2(d) incurred
to finance the acquisition of fixed or capital assets or Indebtedness
of the Borrower and its Subsidiaries permitted by subsection 8.2(e)
incurred to finance the purchase price of, or assumed in connection
with any acquisition otherwise permitted pursuant to this Agreement,
provided that (i) such Liens shall be created no later than the later
of the date of such acquisition or the date of the incurrence or
assumption of such Indebtedness, and (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness and, in the case of Indebtedness assumed in connection
with any such acquisition, the property subject thereto immediately
prior to such acquisition;
(i) Liens existing on assets or properties at the time of the
acquisition thereof by the Borrower or any of its Subsidiaries which do
not materially interfere with the use, occupancy, operation and
maintenance of structures existing on the property subject thereto or
extend to or cover any assets or properties of the Borrower or such
Subsidiary other than the assets or property being acquired;
(j) Liens (i) in existence on the Effective Date and listed in
Schedule 8.3(j) hereto or Schedule 4.11 of the Stock Purchase Agreement
and other Liens securing Indebtedness of the Borrower and its
Subsidiaries permitted by subsection 8.2(g), provided that no such Lien
is spread to cover any additional property after the Effective Date and
that the amount of Indebtedness secured thereby is not increased except
as permitted by subsection 8.2(g), or (ii) not otherwise permitted
hereunder, all of which Liens permitted pursuant to this subsection
8.3(j)(ii) secure obligations not exceeding (as to the Borrower and all
its Subsidiaries) $1,000,000 in aggregate amount at any time
outstanding;
(k) Liens securing Guarantee Obligations permitted under
subsection 8.4(d) not exceeding (as to the Borrower and all its
Subsidiaries) $1,000,000 in aggregate amount at any time outstanding;
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(l) Liens created pursuant to the Security Documents
or otherwise securing Indebtedness permitted by subsection
8.2(a);
(m) any encumbrance or restriction (including, without
limitation, put and call agreements) with respect to the Capital Stock
of any joint venture or similar arrangement pursuant to the joint
venture or similar agreement with respect to such joint venture or
similar arrangement, provided that no such encumbrance or restriction
affects in any way the ability of the Borrower or any of its
Subsidiaries to comply with subsection 8.15(b);
(n) Liens on property subject to Sale and Leaseback
Transactions permitted under subsection 8.11 and general intangibles
related thereto;
(o) Liens on property of any Foreign Subsidiary of the
Borrower securing Indebtedness of such Foreign Subsidiary permitted by
subsection 8.2(h) or otherwise permitted under this Agreement; and
(p) Liens on Intellectual Property (as defined in subsection
5.9) and foreign patents, patent applications, trademarks, trademark
applications, tradenames, copyrights, technology, know-how and
processes to the extent such Liens arise from the granting of licenses
to use such Intellectual Property and foreign patents, patent
applications, trademarks, trademark applications, tradenames,
copyrights, technology, know-how and processes to any Person in the
ordinary course of business of the Borrower or any of its Subsidiaries.
8.4 Limitation on Guarantee Obligations. Create, incur, assume
or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the Effective Date
and listed in Schedule 8.4(a) hereto or Schedule 9.4 of the Stock
Purchase Agreement, and any refinancings, refundings, extensions or
renewals thereof, provided that the amount of such Guarantee Obligation
shall not be increased at the time of such refinancing, refunding,
extension or renewal except to the extent that the amount of
Indebtedness in respect of such Guarantee Obligations is permitted to
be increased by subsection 8.2(h);
(b) Guarantee Obligations for performance, appeal, judgment,
replevin and similar bonds and suretyship arrangements, all in the
ordinary course of business;
(c) Reimbursement Obligations in respect of the Letters of
Credit;
(d) Guarantee Obligations in respect of third-party loans and
advances to officers or employees of the Borrower or any of its
Subsidiaries (i) for travel and entertainment expenses incurred in the
ordinary course of business, (ii) for relocation expenses incurred in
the ordinary course of business, or (iii) for other purposes in an
aggregate amount (as to the Borrower and all its Subsidiaries),
together with the
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aggregate amount of all Investments permitted under subsection
8.9(e)(iv), of up to 1,000,000 outstanding at any time;
(e) obligations to insurers required in connection with
worker's compensation and other insurance coverage incurred in the
ordinary course of business;
(f) obligations of the Borrower and its Subsidiaries under
Permitted Hedging Arrangements;
(g) Guarantee Obligations incurred in connection with
acquisitions otherwise permitted pursuant to this Agreement, provided
that if any such Guarantee Obligation inures to the benefit of any
Person other than the Person from whom such acquisition is made or any
Affiliate thereof, such Guarantee Obligation shall not exceed, with
respect to any such acquisition, 65% of the purchase price of such
acquisition (including any Indebtedness assumed in connection with any
such acquisition) or such greater percentage as shall be reasonably
satisfactory to the Administrative Agent;
(h) guarantees made in the ordinary course of its business by
the Borrower or any of its Subsidiaries of obligations of the Borrower
or any of its Subsidiaries, which obligations are otherwise permitted
under this Agreement;
(i) Guarantee Obligations in connection with sales or other
dispositions permitted under subsection 8.6, including indemnification
obligations with respect to leases, and guarantees of collectability in
respect of accounts receivable or notes receivable for up to face
value;
(j) Guarantee Obligations in respect of Indebtedness of a
Person in connection with a joint venture or similar arrangement in
respect to which no other coinvestor or other Person has a greater
legal or beneficial ownership interest than the Borrower or any of its
Subsidiaries, and as to all of such Persons does not at any time exceed
$1,000,000 in aggregate principal amount;
(k) Guarantee Obligations incurred pursuant to the Guarantees
or otherwise in respect of Indebtedness permitted by subsection 8.2(a);
(l) guarantees by Subsidiaries of the Borrower set forth in
the Senior Subordinated Facility Documents and the Senior Subordinated
Notes Documents, which guarantees are subordinated as provided in each
such document;
(m) guarantees of Indebtedness of Foreign Subsidiaries
permitted by subsection 8.2(h);
(n) Guarantee Obligations in respect of letters of credit
issued for the account of Foreign Subsidiaries, and guarantees thereof,
provided that the aggregate amount of such Guarantee Obligations, taken
together with the aggregate amount of other
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Indebtedness of Foreign Subsidiaries outstanding pursuant to subsection
8.2(h), shall not exceed the aggregate amount of such Indebtedness
permitted pursuant to such subsection; and
(o) Guarantee Obligations made by the Borrower or any of its
Subsidiaries to enable customers of the Borrower or any of its
Subsidiaries to obtain financing for the purchase of goods or services
of the Borrower or any of its Subsidiaries, provided the aggregate
amount of all such Guarantee Obligations shall not at any one time
exceed $250,000.
8.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
one or more Wholly Owned Subsidiaries of the Borrower (provided that
the Wholly Owned Subsidiary or Subsidiaries of the Borrower shall be
the continuing or surviving entity);
(b) any Subsidiary of the Borrower may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any Wholly Owned
Subsidiary of the Borrower;
(c) as expressly permitted by subsection 8.6 and 8.15; and
(d) the Borrower and its Subsidiaries may consummate the
Foreign Subsidiary Transfer.
8.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary of the
Borrower, issue or sell any shares of such Subsidiary's Capital Stock, to any
Person other than the Borrower or any Wholly Owned Subsidiary of the Borrower,
except:
(a) the sale or other Disposition of obsolete, worn out or
surplus property, whether now owned or hereafter acquired, in the
ordinary course of business;
(b) the sale or other Disposition of any property (including
Inventory) in the ordinary course of business;
(c) the sale or discount without recourse of accounts
receivable or notes receivable arising in the ordinary course of
business, or the conversion or exchange of
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accounts receivable into or for notes receivable, in connection with
the compromise or collection thereof provided that, in the case of any
Foreign Subsidiary of the Borrower, any such sale or discount may be
with recourse if such sale or discount is consistent with customary
practice in such Foreign Subsidiary's country of business and the
aggregate amount of any such recourse shall be included in the
determination of such Foreign Subsidiary's Indebtedness for purposes of
subsection 8.2(h);
(d) as permitted by subsection 8.5(b) and pursuant to Sale and
Leaseback Transactions permitted by subsection 8.11;
(e) Dispositions of any assets or property by the Borrower or
any of its Subsidiaries to the Borrower or any Wholly Owned Subsidiary
of the Borrower, including, without limitation, the Foreign Subsidiary
Transfer;
(f) the abandonment or other Disposition of patents,
trademarks or other intellectual property that are, in the reasonable
judgment of the Borrower, no longer economically practicable to
maintain or useful in the conduct of the business of the Borrower and
its Subsidiaries taken as a whole;
(g) Asset Sales by the Borrower or any of its Subsidiaries the
Net Cash Proceeds of which do not exceed $5,000,000 in the aggregate
after the Effective Date, provided that an amount equal to 100% of the
Net Cash Proceeds of any such Asset Sale less the Reinvested Amount is
applied in accordance with subsection 4.4(e);
(h) the sale of the Sylmar Facility for approximately
$1,500,000, provided that 100% of the Net Cash Proceeds of such sale
less the Reinvested Amount with respect thereto is applied in
accordance with subsection 4.4(e); and
(i) the assignment of the Gulton Data Systems Contracts to
Xxxx XX or any of its Subsidiaries.
8.7 Limitation on Restricted Payments. Declare or pay any
dividend (other than dividends payable solely in common stock of the Borrower or
options, warrants or other rights to purchase common stock of the Borrower) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of the Borrower or any
warrants or options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution (other than distributions payable
solely in common stock of the Borrower or options, warrants or other rights to
purchase common stock of the Borrower) in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of the Borrower,
except that:
(a) the Borrower may pay cash dividends in an amount
sufficient to allow Holdings to pay expenses incurred in the ordinary
course of business in an aggregate amount not to exceed $750,000 in any
fiscal year;
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(b) the Borrower may pay cash dividends in an amount
sufficient to allow Holdings to pay all fees and expenses incurred in
connection with the Transactions and the transactions expressly
contemplated by this Agreement and the other Loan Documents in an
aggregate amount which, together with all other such fees and expenses
of the Borrower shall not exceed $13,750,000;
(c) the Borrower may pay cash dividends to Holdings in an
amount equal to the Equity Portion of the Adjustment Payment;
(d) after making the prepayment required by subsection 4.4(b),
the Borrower may pay cash dividends in an amount equal to the sum of
(i) the amount, if any, by which the gross proceeds of the Senior
Subordinated Notes exceeds the principal amount of Indebtedness under
the Senior Subordinated Credit Agreement by more than $12,000,000, plus
(ii), so long as no Default has occurred and is continuing at such
time, an amount equal to the accrued dividends on the aggregate amount
of the Senior PIK Preferred Stock being redeemed with the dividends
described in clause (i) above for a period not exceeding six months;
(e) the Borrower may pay cash dividends in an amount
sufficient to cover reasonable and necessary expenses (including
professional fees and expenses) incurred by Holding in connection with
indemnification and reimbursement of directors, officers and employees
in respect of liabilities relating to their serving in any such
capacity;
(f) the Borrower may pay cash dividends in amount sufficient
to pay tax liabilities of Holdings which are paid in cash by Holdings
to any taxing authority; and
(g) the Borrower may pay cash dividends in amount sufficient
to allow Holdings to repurchase shares of its common stock or rights,
option or units in respect thereof from Management Investors (but not
from Greenwich Street Audio LLC or any member of the GSCP Group) for an
aggregate purchase price not to exceed $750,000.
8.8 Limitation on Capital Expenditures. Make or commit to make
any Capital Expenditures (excluding any expenses incurred in connection with
normal replacement and maintenance programs properly charged to current
operations and excluding any Reinvested Amounts); provided that the Borrower and
its Subsidiaries may make Capital Expenditures in an amount not to exceed, for
any test period set forth below, the amount set forth opposite such test period
below:
Test Period Amount
----------- ------
Effective Date - February 28, 1998 $6,500,000
March 1, 1998 - February 28, 1999 $6,000,000
March 1, 1999 - February 28, 2000 $6,000,000
March 1, 2000 - February 28, 2001 $6,000,000
March 1, 2001 - February 28, 2002 $6,000,000
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March 1, 2002 - February 28, 2003 $6,000,000
; provided that any Capital Expenditures permitted to be made during any test
period and not made during such test period may be carried over and expended
during the next succeeding test period.
8.9 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment, in cash or by
transfer of assets or property, in (each an "Investment"), any Person, except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in cash and Cash Equivalents;
(c) Investments existing on the Effective Date and described
in Schedule 8.9(c), setting forth the respective amounts of such
Investments as of a recent date;
(d) Investments in notes receivable and other instruments and
securities obtained in connection with transactions permitted by
subsection 8.6(c);
(e) loans and advances to officers, directors or employees of
Holdings, the Borrower or any of their respective Subsidiaries (i) in
the ordinary course of business for travel and entertainment expenses,
(ii) existing on the Effective Date and described in Schedule 8.9(c),
(iii) made after the Effective Date for relocation expenses in the
ordinary course of business, (iv) made for other purposes in an
aggregate amount (as to Holdings and all its Subsidiaries), together
with the aggregate amount of all Guarantee Obligations permitted
pursuant to subsection 8.4(d), of up to $500,000 outstanding at any
time or (v) relating to indemnification or reimbursement of any
officers, directors or employees in respect of liabilities relating to
their serving in any such capacity or as otherwise specified in
subsection 8.10;
(f) Investments by the Borrower in its Wholly Owned
Subsidiaries and by such Wholly Owned Subsidiaries in the Borrower and
in Wholly Owned Subsidiaries of the Borrower;
(g) Investments of the Borrower and its subsidiaries under
Permitted Hedging Arrangements;
(h) Investments in the nature of pledges or deposits with
respect to leases or utilities provided to third parties in the
ordinary course of business or otherwise described in subsection
8.3(c), (d) or (f);
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(i) Investments representing non-cash consideration received
by the Borrower or any of its Subsidiaries in connection with any Asset
Sale, provided that in the case of any Asset Sale permitted under
subsection 8.6(g), such non-cash consideration constitutes not more
than 25% of the aggregate consideration received in connection with
such Asset Sale and any such non-cash consideration received by the
Borrower or any of its Domestic Subsidiaries is pledged to the
Administrative Agent for the benefit of the Lenders pursuant to the
Security Documents;
(j) Investments representing evidences of Indebtedness,
securities or other property received from another Person by the
Borrower or any of its Subsidiaries in connection with any bankruptcy
proceeding or other reorganization of such other Person or as a result
of foreclosure, perfection or enforcement of any Lien or exchange for
evidences of Indebtedness, securities or other property of such other
Person held by the Borrower or any of its Subsidiaries; provided that
any such securities or other property received by the Borrower or any
of its Domestic Subsidiaries is pledged to the Administrative Agent for
the benefit of the Lenders pursuant to the Security Documents;
(k) acquisitions of the business or assets of, or stock or
other evidences of beneficial ownership of, any Person, so long as (i)
such acquisition is expressly permitted by subsection 8.5 or (ii) the
aggregate consideration paid by the Borrower and its Subsidiaries in
connection with all such acquisitions made pursuant to this clause (ii)
since the Effective Date does not exceed at any time an amount equal to
$7,500,000;
(l) Investments by the Borrower or any of its Subsidiaries in
a Person in connection with a joint venture or similar arrangement in
respect of which no other co-investor or other Person has a greater
legal or beneficial ownership interest than the Borrower or such
Subsidiary in an aggregate amount not to exceed at any time an amount
equal to $2,500,000; and
(m) the consummation of the Foreign Subsidiary Transfer.
8.10 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, and (b) upon
terms no less favorable to the Borrower or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person
which is not an Affiliate; provided that nothing contained in this subsection
8.10 shall be deemed to prohibit:
(i) the payment of transaction expenses in connection with
this Agreement and the Transaction.
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(ii) the Borrower or any of its Subsidiaries from entering
into or performing an agreement with GSCP for the rendering of
management consulting or financial advisory services for compensation
not to exceed in the aggregate $750,000 per year plus reasonable
out-of-pocket expenses;
(iii) the Borrower or any of its Subsidiaries from entering
into, making payments pursuant to and otherwise performing an
indemnification and contribution agreement in favor of any person who
is or becomes a director, officer, agent or employee of the Borrower or
any of its Subsidiaries, in respect of liabilities (A) arising under
the Securities Act, the Exchange Act and any other applicable
securities laws or otherwise, in connection with any offering of
securities by the Borrower or any of its Subsidiaries, (B) incurred to
third parties for any action or failure to act of the Borrower or any
of its Subsidiaries, predecessors or successors, (C) arising out of the
performance by GSCP of management consulting or financial advisory
services provided to the Borrower or any of its Subsidiaries, (D)
arising out of the fact that any indemnitee was or is a director,
officer, agent or employee of the Borrower or any of its Subsidiaries,
or is or was serving at the request of any such corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or enterprise or (E) to the fullest
extent permitted by Delaware or other applicable state law, arising out
of any breach or alleged breach by such indemnitee of his or her
fiduciary duty as a director or officer of the Borrower or any of its
Subsidiaries;
(iv) the Borrower or any of its Subsidiaries from performing
any agreements or commitments with or to any Affiliate existing on the
Effective Date and described on Schedule 8.10;
(v) any transaction permitted under subsection 8.3(k), 8.4(d),
8.4(j), 8.4(k), 8.5, 8.7, 8.9(e) or 8.9(l), or any transaction with a
Wholly Owned Subsidiary of the Borrower; or
(vi) the Borrower or any of its Subsidiaries from performing
its obligations under the Tax Sharing Agreement.
For purposes of this subsection 8.10, (A) any transaction with any Affiliate
shall be deemed to have satisfied the standard set forth in clause (b) of the
first sentence hereof if (i) such transaction is approved by a majority of the
Disinterested Directors of the board of directors of the Borrower or such
Subsidiary, or (ii) in the event that at the time of any such transaction, there
are no Disinterested Directors serving on the board of directors of the Borrower
or such Subsidiary, such transaction shall be approved by a nationally
recognized expert with expertise in appraising the terms and conditions of the
type of transaction for which approval is required, and (B) "Disinterested
Director" shall mean, with respect to any Person and transaction, a member of
the board of directors of such Person who does not have any material direct or
indirect financial interest in or with respect to such transaction.
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8.11 Limitation on Sale and Leaseback Transactions. Enter into
any arrangement with any Person providing for the leasing by the Borrower or any
of its Subsidiaries of real or personal property which has been or is to be sold
or transferred by the Borrower or any such Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary (any of such arrangements, a "Sale and Leaseback Transaction"), other
than in connection with any Disposition permitted under subsection 8.6 and
except for Sale and Leaseback Transactions entered into by the Borrower or any
such Subsidiary with respect to real or personal property with an aggregate book
value not to exceed $1,000,000 at any one time.
8.12 Limitation on Optional Payments and Modifications of Debt
Instruments and Other Documents. (a) Make any optional payment or prepayment on
or repurchase or redemption of the Senior Subordinated Credit Agreement or any
Senior Subordinated Notes, including, without limitation, any payments on
account of, or for a sinking or other analogous fund for, the repurchase,
redemption, defeasance or other acquisition thereof, except mandatory payments
of principal, interest, fees and expenses required by the terms of the Senior
Subordinated Credit Agreement, the Senior Subordinated Notes and the Senior
Subordinated Note Indenture, as the case may be, only to the extent permitted
under the subordination provisions, if any, applicable thereto.
(b) In the event of the occurrence of a Change of Control,
repurchase the Senior Subordinated Notes or any portion thereof, unless the
Borrower shall have (i) made payment in full of the Loans, all Reimbursement
Obligations and any other amounts then due and owing to any Lender or the
Administrative Agent hereunder and under any Note and cash collateralized the
L/C Obligations on terms reasonably satisfactory to the Administrative Agent or
(ii) made an offer to pay the Loans, all Reimbursement Obligations and any
amounts then due and owing to each Lender and the Administrative Agent hereunder
and under any Note and to cash collateralize the L/C Obligations in respect of
each Lender and shall have made payment in full thereof to each such Lender or
the Administrative Agent which has accepted such offer and cash collateralized
the L/C Obligations in respect of each such Lender which has accepted such
offer.
(c) Amend, supplement, waive or otherwise modify any of the
provisions of any of the Senior Subordinated Facility Notes and Senior
Subordinated Notes or the Senior Subordinated Facility Documents or the Senior
Subordinated Notes Documents:
(i) which amends or modifies the subordination
provisions, if any, contained therein;
(ii) which shortens the fixed maturity or increases the
principal amount of, or increases the rate or shortens the time of
payment of interest on, or increases the amount or shortens the time of
payment of any principal or premium payable whether at maturity, at a
date fixed for prepayment or by acceleration or otherwise of the
Indebtedness under the Senior Subordinated Credit Facility or evidenced
by the Senior
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Subordinated Notes, or increases the amount of, or accelerates the time
of payment of, any fees or other amounts payable in connection
therewith;
(iii) which relates to any material affirmative or negative
covenants or any events of default or remedies thereunder and the
effect of which is to subject the Borrower or any of its Subsidiaries,
to any more onerous or more restrictive provisions; or
(iv) which otherwise adversely affects the interests of the
Lenders as senior creditors with respect to the Senior Subordinated
Credit Facility or the Senior Subordinated Notes or the interests of
the Lenders under this Agreement or any other Loan Document in any
material respect.
8.13 Limitation on Changes in Fiscal Year. Permit the
fiscal year of the Borrower to end on a day other than February
28 (or 29, as the case may be).
8.14 Limitation on Negative Pledge Clauses. Enter into with
any Person any agreement, other than (a) this Agreement, the other Loan
Documents and any related documents and (b) any purchase money mortgages,
acquisition agreements, Financing Leases or operating leases of real property
entered into in the ordinary course of business, which prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien in favor of the Lenders in respect of obligations and
liabilities under this Agreement, any Notes or any other Loan Documents upon any
of its property, assets or revenues, whether now owned or hereafter acquired
except for any such agreement relating to Indebtedness of a Foreign Subsidiary
permitted by subsection 8.2(h) or otherwise permitted under this Agreement.
8.15 Limitation on Lines of Business; Creation of
Subsidiaries. (a) Enter into any business, either directly or through any
Subsidiary or joint venture, except for those businesses of the same general
type as those in which the Borrower and its Subsidiaries are engaged on the
Effective Date or which are directly related thereto.
(b) Create any new Subsidiaries of the Borrower other than any
new Subsidiary that (i) (in the case of a new Domestic Subsidiary) shall execute
and deliver to the Administrative Agent, as applicable, the Guarantee and
Collateral Agreement and appropriate Mortgages and other security documents and
take any necessary steps to perfect the security interests to be created thereby
and (ii) for which the relevant parent corporation (if such parent corporation
is the Borrower or a Domestic Subsidiary) shall execute and deliver to the
Administrative Agent a Stock Pledge Agreement and take any necessary steps to
perfect the security interest to be created thereby (which security interest
shall not apply to more than 65% of such parent corporation's ownership interest
in any Foreign Subsidiary).
(c) To the extent not prohibited by this Agreement, convey,
sell or otherwise transfer shares of Capital Stock of a Foreign Subsidiary to
the Borrower or any Domestic Subsidiary of the Borrower unless at the time of
such conveyance, sale or transfer (or promptly
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thereafter) the Borrower or such Domestic Subsidiary shall execute and deliver
to the Administrative Agent the Guarantee and Collateral Agreement and take any
necessary steps to perfect the security interest to be created thereby (which
security interest shall not apply to (i) more than 65% of the Borrower's or such
Domestic Subsidiary's ownership interest in any Foreign Subsidiary or (ii) any
ownership interest in a non-Wholly Owned Foreign Subsidiary to the extent that
the grant of such security interest would violate the terms of any agreements
under which the Investment by the Borrower or any or its Subsidiaries was made
therein).
8.16 Limitations on Currency and Commodity Hedging
Transactions. Enter into, purchase or otherwise acquire agreements or
arrangements relating to currency, commodity or other hedging except, to the
extent and only to the extent that, such agreements or arrangements are entered
into, purchased or otherwise acquired in the ordinary course of business of the
Borrower or any of its Subsidiaries with reputable financial institutions and
not for purposes of speculation (any such agreement or arrangement permitted by
this subsection, a "Permitted Hedging Arrangement").
8.17 Holding Company Status of EVI Audio. In the case of EVI
Audio, permit EVI Audio to engage in any business other than (i) the owning of
the Capital Stock of the other Foreign Subsidiaries, (ii) owning the promissory
note of Dynacord Audio GmbH and (iii) any business or other activities
reasonably related to the foregoing, or to incur any material liabilities other
than any liabilities (x) reasonably related to the foregoing or (y) arising by
operation of law.
8.18 Establishment and Maintenance of Lockbox Accounts. (a)
Establish or maintain, or cause to be established or maintained, any bank or
trust account in which any Collateral or the proceeds thereof is to be deposited
by or on behalf of any Obligor subsequent to the date 30 days after the
Effective Date, except:
(i) a "Lockbox Account" established in accordance with a
Lockbox Agreement; and
(ii) any trust account for the deposit of funds payable
under any contract covered by any surety or performance bond, which is
not a "Lockbox Account".
(b) Take any action, or omit to take any action, under any
Lockbox Agreement which would reasonably be expected to have a material adverse
effect on the validity or enforceability of such Agreement (including, without
limitation, the orderly collection of amounts due from Obligors), except as
otherwise contemplated hereby or by the terms of such Lockbox Agreement.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
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(a) The Borrower shall fail to pay any principal of any Loan
or any Reimbursement Obligation when due in accordance with the terms
hereof (whether at stated maturity, by mandatory prepayment or
otherwise); or the Borrower shall fail to pay any interest or fees on
any Loan, or any other amount payable hereunder, within five days after
any such interest, fees or other amount becomes due in accordance with
the terms hereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document (or in any amendment,
modification or supplement hereto or thereto) or which is contained in
any certificate furnished at any time by or on behalf of any Loan Party
pursuant to this Agreement or any such other Loan Document shall prove
to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) Any Loan Party shall default in the observance or
performance of any agreement contained in (i) subsection 7.7(a) or
Section 8 of this Agreement or (ii) Section 5.11 of the Guarantee and
Collateral Agreement, and, in the case of a default in the observance
or performance of its obligations under subsection 7.7(a) hereof, such
default shall have continued unremedied for a period of two days after
a Responsible Officer of the Borrower shall have discovered or should
have discovered such default; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section 9), and such default shall continue unremedied for
a period ending on the earlier of (i) the date 30 days after a
Responsible Officer of the Borrower shall have discovered or should
have discovered such default and (ii) the date 15 days after written
notice has been given to the Borrower by the Administrative Agent or
the Required Lenders; or
(e) Holdings or any of its Subsidiaries shall (i) default in
(x) any payment of principal of or interest on any Indebtedness (other
than the Loans and the Reimbursement Obligations) in excess of
$1,000,000 or (y) in the payment of any Guarantee Obligation in excess
of $1,000,000, beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default in
the observance or performance of any other agreement or condition
relating to any Indebtedness or Guarantee Obligation referred to in
clause (i) above or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice or
lapse of time if required, such Indebtedness to become due prior to its
stated maturity or such Guarantee Obligation to become payable (an
"Acceleration"), and such time shall have
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lapsed and, if any notice (a "Default Notice") shall be required to
commence a grace period or declare the occurrence of an event of
default before notice of Acceleration may be delivered, such Default
Notice shall have been given; or
(f) (i) Any Loan Party shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or any Loan Party shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against any Loan Party any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged, unstayed or
unbonded for a period of 60 days; or (iii) there shall be commenced
against any Loan Party any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) any Loan Party shall take any corporate
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) any Loan Party shall be generally unable to, or
shall admit in writing its general inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of either of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is in the reasonable opinion of the
Administrative Agent likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) either of the Borrower
or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Administrative Agent is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan, or (vi) any other event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could be reasonably expected to
result in a Material Adverse Effect; or
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(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate at
any time a liability (net of any insurance or indemnity payments
actually received in respect thereof prior to or within 90 days from
the entry thereof, or to be received in respect thereof in the event
any appeal thereof shall be unsuccessful) of $1,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 90 days from the entry thereof;
or
(i) The Senior Subordinated Credit Agreement or the Senior
Subordinated Notes, for any reason, shall not be or shall cease to be
validly subordinated as provided therein and in the Senior Subordinated
Facility Documents and the Senior Subordinated Notes Documents to the
obligations of the Borrower under this Agreement, any Notes and the
other Loan Documents, or the obligations of any other Loan Party under
a guarantee of the Senior Subordinated Credit Agreement or the Senior
Subordinated Notes, for any reason, shall not be or shall cease to be
validly subordinated as provided therein and in the Senior Subordinated
Facility Documents and the Senior Subordinated Notes Documents to the
obligations of such Loan Party under the Guarantee to which it is a
party; or
(j) (i) Any of the Security Documents shall cease for any
reason to be in full force and effect (other than pursuant to the terms
hereof or thereof), or any Loan Party which is a party to any of the
Security Documents shall so assert in writing, or (ii) the Lien created
by any of the Security Documents shall cease to be perfected and
enforceable in accordance with its terms or of the same effect as to
perfection and priority purported to be created thereby with respect to
any significant portion of the Collateral (other than in connection
with any termination of such Lien in respect of any Collateral as
permitted hereby or by any Security Document), and such failure of such
Lien to be perfected and enforceable with such priority shall have
continued unremedied for a period of 20 days; or
(k) Any Guarantee shall cease for any reason to be in full
force and effect (other than pursuant to the terms hereof or thereof)
or any Guarantor shall so assert in writing; or
(l) Any Loan Document (other than this Agreement, any of the
Security Documents or any Guarantee) shall cease for any reason to be
in full force and effect (other than pursuant to the terms hereof or
thereof) or any Loan Party shall so assert in writing; or
(m) A Change of Control shall have occurred
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph 9(f) above with respect to the Borrower,
automatically the Revolving Credit Commitments and the Term Loan Commitments, if
any, shall immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this
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Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) and any Notes shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders the Administrative Agent shall, by notice to the
Borrower, declare the Revolving Credit Commitments and the Term Loan Commitments
to be terminated forthwith, whereupon the Revolving Credit Commitments and the
Term Loan Commitments, if any, shall immediately terminate; and (ii) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) and any Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable.
With respect to any Letter of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower in respect of such Letter of
Credit shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letter of Credit. Such Borrower hereby grants to the
Administrative Agent, for the benefit of the Issuing Lender and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of such Borrower in respect of such Letter of Credit under this
Agreement and the other Loan Documents. Such Borrower shall execute and deliver
to the Administrative Agent, for the account of the Issuing Lender and the L/C
Participants, such further documents and instruments as the Administrative Agent
may request to evidence the creation and perfection of such security interest in
such cash collateral account. Amounts held in such cash collateral account shall
be applied by the Administrative Agent to the payment of drafts drawn under such
Letter of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrower hereunder and under any Notes. After all
Letters of Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrower
hereunder and under any Notes shall have been paid in full, the balance, if any,
in such cash collateral account shall be returned to the Borrower.
Except as expressly provided above in this Section 9,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
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SECTION 10. THE ADMINISTRATIVE AGENT AND THE OTHER
REPRESENTATIVES
10.1 Appointment. Each Lender hereby irrevocably designates
and appoints Chase as the Administrative Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes Chase, as the Administrative Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent and the Other Representatives shall not
have any duties or responsibilities, except, in the case of the Administrative
Agent and the Issuing Lender, those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent or the Other Representatives.
10.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact, and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact or counsel selected by it with reasonable care.
10.3 Exculpatory Provisions. None of the Administrative Agent
or any Other Representative nor any of their officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by such Person under or in connection with
this Agreement or any other Loan Document (except for the gross negligence or
willful misconduct of such Person or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates) or (ii) responsible in any manner to
any of the Lenders for any recitals, statements, representations or warranties
made by the Borrower or any other Loan Party or any officer thereof contained in
this Agreement or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or any other
Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Notes or any other Loan
Document or for any failure of the Borrower or any other Loan Party to perform
its obligations hereunder or thereunder. Neither the Administrative Agent nor
any Other Representative shall be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
other Loan Party. Each Lender agrees that, except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or given to the Administrative Agent for the
account of or with copies for the Lenders, the Administrative Agent and the
Other Representatives shall not have any duty or responsibility to provide any
Lender with any
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credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of the
Borrower or any other Loan Party which may come into the possession of the
Administrative Agent and the Other Representatives or any of their officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
10.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified as between itself and the Lenders
in failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders and/or such other requisite percentage of the Lenders as is
required pursuant to subsection 11.1(a) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
and any Notes and the other Loan Documents in accordance with a request of the
Required Lenders and/or such other requisite percentage of the Lenders as is
required pursuant to subsection 11.1(a), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
10.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action reasonably promptly with respect to such Default or Event of
Default as shall be directed by the Required Lenders and/or such other requisite
percentage of the Lenders as is required pursuant to subsection 11.1(a);
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
10.6 Acknowledgements and Representations by Lenders. Each
Lender expressly acknowledges that none of the Administrative Agent or the Other
Representatives nor any of their officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to it
and that no act by the Administrative Agent or any Other Representative
hereafter taken, including any review of the affairs of the Borrower or
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any other Loan Party, shall be deemed to constitute any representation or
warranty by the Administrative Agent or such Other Representative to any Lender.
Each Lender represents to the Administrative Agent, the Other Representatives
and each of the Loan Parties that, independently and without reliance upon the
Administrative Agent, the Other Representatives or any other Lender, and based
on such documents and information as it has deemed appropriate, it has made and
will make its own appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness of each of the
Borrower and the other Loan Parties, it has made its own decision to make its
Loans hereunder and enter into this Agreement and it will make its own decisions
in taking or not taking action under this Agreement and the other Loan
Documents. Each Lender represents to each other party hereto that it is a bank,
savings and loan association or other similar savings institution, insurance
company, investment fund or company or other financial institution which makes
or acquires commercial loans in the ordinary course of its business, that it is
participating hereunder as a Lender for its account and for such commercial
purposes, and that it has the knowledge and experience to be and is capable of
evaluating the merits and risks of being a Lender hereunder. Each Lender
acknowledges and agrees to comply with the provisions of subsection 11.6
applicable to the Lenders hereunder.
10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent and the Other Representatives in their capacities as such
(to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower and the Borrower to do so), ratably according to
their respective Total Credit Percentages in effect on the date on which
indemnification is sought under this subsection (or, if indemnification is
sought after the date upon which the Revolving Credit Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with their Total Credit Percentages immediately prior to such date), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent or any Other Representative in any way relating
to or arising out of this Agreement, any of the other Loan Documents or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent or any Other Representative under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
arising from (i) the Administrative Agent's or any Other Representative's gross
negligence or willful misconduct or (ii) claims made or legal proceedings
commenced against the Administrative Agent or any Other Representative by any
securityholder or creditor thereof arising out of and based upon rights afforded
any such securityholder or creditor solely in its capacity as such. The
obligations to indemnify the Issuing Lender and Swing Line Lender shall be
ratable among the Revolving Credit Lenders in accordance with their respective
Revolving Credit Commitments (or, if the Revolving Credit Commitments have been
terminated, the outstanding principal amount of their respective Revolving
Credit Loans and L/C Obligations and their respective participating interests in
the outstanding Letters of Credit and shall be payable only by the Revolving
Credit Lenders). The
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agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
10.8 Administrative Agent and Other Representatives in Their
Individual Capacity. The Administrative Agent, the Other Representatives and
their Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrower or any other Loan Party as though the
Administrative Agent and the Other Representatives were not the Administrative
Agent and the Other Representatives hereunder and under the other Loan
Documents. With respect to Loans made or renewed by them and any Note issued to
them and with respect to any Letter of Credit issued or participated in by them,
the Administrative Agent and the Other Representatives shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though they were not the Administrative
Agent or an Other Representative, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent (which shall be a bank) for the Lenders, which
successor agent shall be approved by the Borrower (such approval not to be
unreasonably withheld), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this subsection shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
10.10 Swing Line Lender. The provisions of this Section 10
shall apply to the Swing Line Lender in its capacity as such to the same extent
that such provisions apply to the Administrative Agent.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor any
other Loan Document, nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (x) enter
into with the Loan Parties hereto or thereto, as the case may be, written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or to the other Loan
Documents or changing in any manner the rights or obligations of the Lenders or
the Loan Parties hereunder
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or thereunder or (y) waive at any Loan Party's request, on such terms and
conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Loan or any Reimbursement Obligation or of any
scheduled installment thereof or reduce the stated rate of any interest
or fee payable hereunder or extend the scheduled date of any payment
thereof, increase the amount or extend the expiration date of any
Lender's Revolving Credit Commitment, in each case without the consent
of each Lender directly affected thereby;
(ii) amend, modify or waive any provision of this
subsection 11.1 or reduce the percentage specified in the definition of
Required Lenders, in each case without the written consent of all the
Lenders;
(iii) release any Guarantee or, in the aggregate (in a
single transaction or a series of related transactions), substantially
all of the Collateral without the consent of all the Lenders, except as
expressly permitted hereby or by any Guarantee or Security Document (as
such documents are in effect on the date hereof or, if later, the date
of execution and delivery thereof in accordance with the terms hereof);
(iv) amend or modify the definition of "Borrowing Base",
"Eligible Inventory" or "Eligible Accounts Receivable", in each case
without the consent of each Revolving Credit Lender;
(v) amend, modify or waive any provision of Section 10
without the written consent of the then Administrative Agent and of any
Other Representative affected thereby;
(vi) amend, modify or waive the provisions of any Letter
of Credit or any L/C Obligation without the written consent of the
Issuing Lender and each affected L/C Participant; or
(vii) amend, modify or waive any provision of the Swing
Line Note (if any) or subsection 2.5 without the written consent of the
Swing Line Lender and each other Lender, if any, which holds, or is
required to purchase, a participation in any Swing Line Loan pursuant
to subsection 2.5(d).
Any waiver and any amendment, supplement or modification pursuant to this
subsection 11.1 shall apply to each of the Lenders and shall be binding upon the
Loan Parties, the Lenders, the Administrative Agent and all future holders of
the Loans. In the case of any waiver, each of the Loan Parties, the Lenders and
the Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event
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of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, or, in the case of delivery by a nationally recognized overnight
courier, when received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in Schedule I in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Loans:
The Borrower: EV International, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx
Telecopy: (000) 000-0000
with a copy to: Greenwich Street Capital Partners
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to: Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Brttenham
Telecopy: (000) 000-0000
The Administrative Chase Securities Inc.
Agent, Swing Line 00 Xxxxx XxXxxxx Xxxxxx
Lender and Issuing Suite 2300
Lender: Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
with a copy to: Loan & Agency Services Group
1 Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx
Telecopy: (000) 000-0000
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provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.3, 2.8, 4.2, 4.4, 4.8 or 4.14 shall not
be effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in the other Loan Documents
(or in any amendment, modification or supplement hereto or thereto) and in any
certificate delivered pursuant hereto or such other Loan Documents shall survive
the execution and delivery of this Agreement and the making of the Loans
hereunder.
11.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent and the Other Representatives for all
their reasonable out-of-pocket costs and expenses incurred in connection with
the preparation, execution and delivery of, and any amendment, supplement,
waiver or modification to, this Agreement and the other Loan Documents and any
other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions (including the syndication
of the Revolving Credit Commitments and Term Loans (including the reasonable
expenses of the Administrative Agent's due diligence investigation) and the
monitoring of the Collateral) contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of one firm of counsel
to the Administrative Agent and the Other Representatives, (b) to pay or
reimburse each Lender, each Other Representative and the Administrative Agent
for all its reasonable costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, the
Other Representatives and the several Lenders, and any reasonable Environmental
Costs incurred by any of them arising out of or in any way relating to any Loan
Party or any property in which any Loan Party has had any interest at any time,
(c) to pay, and indemnify and hold harmless each Lender, the Administrative
Agent and the Other Representatives from and against, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, and indemnify and hold harmless each
Lender, the Administrative Agent and the Other Representatives (and their
respective directors, trustees, officers, employees, agents, successors and
assigns) from and against, any and all
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other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
(whether or not caused by any such Person's own negligence (other than gross
negligence) and including, without limitation, the reasonable fees and
disbursements of counsel) with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents (regardless of whether the Administrative Agent, any
such Other Representative or any Lender is a party to the litigation or other
proceeding giving rise thereto and regardless of whether any such litigation or
other proceeding is brought by the Borrower or any other Person), including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with, or liability under, any Environmental Laws or any orders,
requirements or demands of Governmental Authorities related thereto applicable
to the operations of the Borrower, any of its Subsidiaries or any of the
facilities and properties owned, leased or operated by the Borrower or any of
its Subsidiaries (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided that the Borrower shall not have any
obligation hereunder to the Administrative Agent, any such Other Representative
or any Lender with respect to Environmental Costs or indemnified liabilities
arising from (i) the gross negligence or willful misconduct of the
Administrative Agent, any Other Representative or any such Lender (or any of
their respective directors, trustees, officers, employees, agents, successors
and assigns) or (ii) claims made or legal proceedings commenced against the
Administrative Agent, any Other Representative or any such Lender by any
securityholder or creditor thereof arising out of and based upon rights afforded
any such securityholder or creditor solely in its capacity as such.
Notwithstanding the foregoing, except as provided in clauses (b) and (c) above,
the Borrower shall have no obligation under this subsection 11.5 to the
Administrative Agent, any Other Representative or any Lender with respect to any
tax, levy, impost, duty, charge, fee, deduction or withholding imposed, levied,
collected, withheld or assessed by any Governmental Authority. The agreements in
this subsection shall survive repayment of the Loans and all other amounts
payable hereunder.
11.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of each of the
Loan Parties party hereto, the Lenders, the Administrative Agent, the Other
Representatives, all future holders of the Loans and their respective successors
and assigns, except that none of the Loan Parties may, other than in accordance
with subsection 8.5, assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Revolving Credit Commitment of
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan (and any Note evidencing such Loan) for all purposes
under this Agreement and the other Loan Documents and the Loan Parties and the
Administrative Agent shall continue to deal
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solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. Any agreement
pursuant to which any Lender shall sell any such participating interest shall
provide that such Lender shall retain the sole right and responsibility to
exercise such Lender's rights and enforce each of the Loan Parties' obligations
hereunder, including the right to consent to any amendment, supplement,
modification or waiver of any provision of this Agreement or any of the other
Loan Documents, provided that such participation agreement may provide that such
Lender will not agree to any amendment, supplement, modification or waiver
described in clause (i) or (ii) of the proviso to the second sentence of
subsection 11.1(a) without the consent of the Participant. The Borrower agrees
that each Lender shall be entitled to the benefits of subsections 4.9, 4.10,
4.11, 4.12 and 11.5 without regard to whether it has granted any participating
interests, and that all amounts payable to a Lender under subsections 4.9, 4.10,
4.11 and 4.12 shall be determined as if such Lender had not granted any such
participating interests.
(c) Any Lender may, in the ordinary course of its business and
in accordance with applicable law, at any time and from time to time assign to
any Lender or any Affiliate thereof or, with the prior written consent of the
Borrower and the Administrative Agent (which in each case shall not be
unreasonably withheld), to an additional bank or financial institution (an
"Assignee") all or any part of its rights and obligations under this Agreement
and any Notes, including, without limitation, its Revolving Credit Commitment
and Loans, pursuant to an Assignment and Acceptance, substantially in the form
of Exhibit H, executed by such Assignee, such assigning Lender (and, in the case
of an Assignee that is not then a Lender or an Affiliate thereof, by the
Borrower and the Administrative Agent) and delivered to the Administrative Agent
for its acceptance and recording in the Register; provided that (unless the
Borrower and the Administrative Agent otherwise consent in writing) no such
transfer to an Assignee (other than a Lender or any Affiliate thereof) shall be
in an aggregate principal amount less than $3,000,000 in the aggregate (or, if
less, the full amount of such assigning Lender's Term Loans, Revolving Credit
Loans and Revolving Credit Commitment). Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Revolving Credit Commitment
and the Term Loans, as set forth therein, and (y) the assigning Lender
thereunder shall be released from its obligations under this Agreement to the
extent that such obligations shall have been expressly assumed by the Assignee
pursuant to such Assignment and Acceptance (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such assigning Lender shall cease
to be a party hereto but shall nevertheless continue to be entitled to the
benefits of subsections 4.10, 4.11, 4.12 and 11.5). Notwithstanding the
foregoing, no Assignee, which as of the date of any assignment to it pursuant to
this subsection 11.6(c) would be entitled to receive any greater payment under
subsection 4.10 or 4.11 than the assigning Lender would have been entitled to
receive as of such date under such subsections with respect to the rights
assigned, shall be entitled to receive such payments unless the Borrower has
expressly consented in writing to waive the benefit of this provision at the
time of the assignment.
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(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at its address referred to in subsection 11.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Revolving Credit
Commitment of, and the principal amount of the Loans owing to, and any Notes
evidencing such Loans owned by, each Lender from time to time. Notwithstanding
anything in this Agreement to the contrary, each of the Borrower, the
Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of any Loan, any Notes and the Revolving
Credit Commitments recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower at any reasonable
time and from time to time upon reasonable prior notice.
(e) Notwithstanding anything in this Agreement to the
contrary, no assignment under subsection 11.6(c) of any rights or obligations
under or in respect of the Loans or the Notes evidencing such Loans shall be
effective unless and until the Administrative Agent shall have recorded the
assignment pursuant to subsection 11.6(d). Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Assignee (and, in the case of
an Assignee that is not then a Lender or an Affiliate thereof, by the Borrower
and the Administrative Agent), together with payment to the Administrative Agent
of a registration and processing fee of $3,500 (which fee need not be paid in
the case of any assignment to an Affiliate of the assigning Lender), the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give prompt notice of such
acceptance and recordation to the Borrower. On or prior to such effective date,
the assigning Lender shall surrender any outstanding Notes held by it all or a
portion of which are being assigned, and the Borrower, at its own expense,
shall, upon the request to the Administrative Agent by the assigning Lender or
the Assignee, as applicable, execute and deliver to the Administrative Agent (in
exchange for the outstanding Notes of the assigning Lender) a new Revolving
Credit Note, Term Note and/or Swing Line Note, as the case may be, to the order
of such Assignee in an amount equal to (i) in the case of a Revolving Credit
Note, the lesser of (A) the amount of such Assignee's Revolving Credit
Commitment and (B) the aggregate principal amount of all Revolving Credit Loans
made by such Assignee and (ii) in the case of a Term Note, the amount of such
Assignee's Term Loans, in each case with respect to the relevant Loan or
Revolving Credit Commitment after giving effect to such Assignment and
Acceptance and, if the assigning Lender has retained a Revolving Credit
Commitment or Term Loan hereunder, a new Revolving Credit Note, Term Note and/or
Swing Line Note, as the case may be, to the order of the assigning Lender in an
amount equal to (i) in the case of a Revolving Credit Note, the lesser of (A)
the amount of such Lender's Revolving Credit Commitment and (B) the aggregate
principal amount of all Revolving Credit Loans made by such Lender and (ii) in
the case of a Term Note the amount of such Lender's Term Loans and (iii) in the
case of a Swing Line Note, the lesser of (A) the Swing Line Commitment and (B)
the aggregate principal amount of all Swing Line Loans made by such Lender, in
each case with respect to the relevant Loan, Swing Line Commitment, Revolving
Credit Commitment or Term Loan Commitment after giving effect to such Assignment
and Acceptance. Any such new Notes shall be dated the Effective Date and shall
otherwise be in the form of the Note replaced
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thereby. Any Notes surrendered by the assigning Lender shall be returned by the
Administrative Agent to the Borrower marked "cancelled".
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of subsection 11.16, any and all information in such
Lender's possession concerning the Borrower and their Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of each of the
Borrower and its Affiliates prior to becoming a party to this Agreement. No
assignment or participation made or purported to be made to any Transferee shall
be effective without the prior written consent of the Borrower if it would
require the Borrower to make any filing with any Governmental Authority or
qualify any Loan or Note under the laws of any jurisdiction, and the Borrower
shall be entitled to request and receive such information and assurances as it
may reasonably request from any Lender or any Transferee to determine whether
any such filing or qualification is required or whether any assignment or
participation is otherwise in accordance with applicable law.
(g) Nothing herein shall prohibit any Lender from pledging or
assigning any Loan or any Note to any Federal Reserve Bank in accordance with
applicable law.
11.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of its Revolving
Credit Loans, Term Loans or the Reimbursement Obligations owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 9(f), or otherwise (except pursuant to
subsection 4.4, 4.13(d) or 11.6)), in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect of such other
Lender's Revolving Credit Loans, Term Loans or the Reimbursement Obligations, as
the case may be, owing to it, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders an interest (by participation,
assignment or otherwise) in such portion of each such other Lender's Revolving
Credit Loans, Term Loans or the Reimbursement Obligations, as the case may be,
owing to it, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by such Borrower to the extent
permitted by applicable law, upon the occurrence of an Event of Default under
Section 9(a) to set-off and appropriate and apply against any amount then due
and payable under Section 9(a) any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
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111
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of the Borrower. Each Lender agrees promptly to notify such Borrower and
the Administrative Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
11.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be delivered to the Borrower and the
Administrative Agent.
11.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of each of the Loan Parties party hereto, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by any of
the Loan Parties party hereto, the Administrative Agent or any Lender relative
to the subject matter hereof not expressly set forth or referred to herein or in
the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND ANY NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY NOTES SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
11.12 Submission To Jurisdiction; Waivers. Each party hereto
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such
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112
action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient forum and agrees not to plead
or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the applicable Borrower, the applicable Lender or the
Administrative Agent, as the case may be, at the address specified in
subsection 11.2 or at such other address of which the Administrative
Agent, any such Lender and any such Borrower shall have been notified
pursuant thereto;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any punitive damages.
11.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Other
Representative or Lender has any fiduciary relationship with or duty to
the Borrower arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between the
Administrative Agent and Lenders, on the one hand, and the Borrower, on
the other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby and thereby among the Lenders or among the Borrower
and the Lenders.
11.14 WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY NOTES OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.15 Confidentiality. The Administrative Agent and each
Lender agrees to keep confidential any information (a) provided to it by or on
behalf of the Borrower or any of its Subsidiaries pursuant to or in connection
with this Agreement or (b) obtained by such Lender based on a review of the
books and records of the Borrower or any of its Subsidiaries; provided that
nothing herein shall prevent any Lender from disclosing any such information (i)
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113
to the Administrative Agent or any other Lender, (ii) to any Transferee or
prospective Transferee which agrees to comply with the provisions of this
subsection, (iii) to its affiliates and the employees, directors, agents,
attorneys, accountants and other professional advisors of it and its affiliates,
provided that such Lender shall inform each such Person of the agreement under
this subsection 11.15 and take reasonable actions to cause compliance by any
such Person referred to in this clause (iii) with this agreement (including,
where appropriate, to cause any such Person to acknowledge its agreement to be
bound by the agreement under this subsection 11.15), (iv) upon the request or
demand of any Governmental Authority having jurisdiction over such Lender or to
the extent required in response to any order of any court or other Governmental
Authority or as shall otherwise be required pursuant to any Requirement of Law,
provided that such Lender shall, unless prohibited by any Requirement of Law,
notify the Borrower of any disclosure pursuant to this clause (iv) as far in
advance as is reasonably practicable under such circumstances, (v) which has
been publicly disclosed other than in breach of this Agreement, (vi) in
connection with the exercise of any remedy hereunder, (vii) in connection with
periodic regulatory examinations and reviews conducted by the National
Association of Insurance Commissioners (to the extent applicable), (viii) in
connection with any litigation to which such Lender may be a party, subject to
the proviso in clause (iv), and (ix) if, prior to such information having been
so provided or obtained, such information was already in the Administrative
Agent's or a Lender's possession on a nonconfidential basis without a duty of
confidentiality to the Borrower being violated.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
GULTON ACQUISITION CORP.
By: /s/ XXXXXXXXX X. VANDEN BEUKEL
-------------------------------
Name: Xxxxxxxxx X. Vanden Beukel
Title: Vice President and Secretary
THE CHASE MANHATTAN BANK,
as Administrative Agent, Swing Line Lender,
Issuing Lender and a Lender
By: /s/ XXXXXXXX XXXXXXX XX.
------------------------------
Name: X. Xxxxxxx
Title: Vice President
121
THE TRAVELERS INSURANCE COMPANY,
as a Lender
By: /s/ JORDAN X. XXXXXXX
---------------------------
Name: Jordan X. Xxxxxxx
Title: Vice President
000
XXX XXXX XX XXX XXXX,
as a Lender
By: /s/ XXXX XXXXX
------------------------
Name: Xxxx X. Xxxxx Xx.
Title: Vice-President
123
BHF-BANK AKTIENGESELLSCHAFT, GRAND
CAYMAN BRANCH, as a Lender
By: /s/ XXXX XXXXX /s/ XXXXX XXXXXX
------------------ -----------------
Name: Xxxx Xxxxx Xxxxx Xxxxxx
Title: AVP VP
124
COMERICA BANK,
as a Lender
By: /s/ XXXXX XXXXXXXXXX
-------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Vice President
125
NBD BANK,
as a Lender
By: /s/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
126
THE FIRST NATIONAL BANK OF BOSTON,
as a Lender
By: /s/ XXXX X. XXXXXX
------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
127
FIRST SOURCE FINANCIAL LLP,
by FIRST SOURCE FINANCIAL INC., its
Agent/Manager, as a Lender
By: /s/ XXXX X. XXXXXXX
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
128
XXXXXX FINANCIAL, INC.,
as a Lender
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
129
MICHIGAN NATIONAL BANK,
as a Lender
By: /s/ XXXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Commercial Relationship Manager
130
NATIONAL CITY BANK,
as a Lender
By: /s/ XXXXXX XXXX
------------------------------
Name: Xxxxxx Xxxx
Title: Vice President
131
Schedule I
to Credit Agreement
Commitments and Addresses
SCHEDULE I
Revolving Credit
Lender and Address Commitment Term Loss Commitment Total Commitment
------------------ ---------------- -------------------- ----------------
THE CHASE MANHATTAN BANK $3,958,333.33 $5,541,666.67 $9,500,000.00
Xxx Xxxxx Xxxxxxxxx Xxxxx,
0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx
Telecopy: (000) 000-0000
THE TRAVELERS INSURANCE COMPANY $4,166,666.67 $5,833,333.33 $10,000,000.00
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
THE BANK OF NEW YORK $1,875,000.00 $2,625,000.00 $4,500,000.00
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxx Xx.
Telecopy: (000) 000-0000
BHF-BANK AKTIENGESELLSCHAFT $1,875,000.00 $2,625,000.00 $4,500,000.00
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxx Xxxxx
Telecopy: (000) 000-0000
COMERCIA BANK $1,875,000.00 $2,625,000.00 $4,500,000.00
00 Xxxxxx Xxxxxx, XX
Xxxxx Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
NBD BANK $1,875,000.00 $2,625,000.00 $4,500,000.00
000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxx
Telecopy: (000) 000-0000
THE FIRST NATIONAL BANK OF BOSTON $1,875,000.00 $2,625,000.00 $4,500,000.00
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telecopy: (000) 000-0000
FIRST SOURCE FINANCIAL LLP $1,875,000.00 $2,625,000.00 $4,500,000.00
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Telecopy: (000) 000-0000
XXXXXX FINANCIAL, INC $1,875,000.00 $2,625,000.00 $4,500,000.00
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
MICHIGAN NATIONAL BANK $1,875,000.00 $2,625,000.00 $4,500,000.00
00000 Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
NATIONAL CITY BANK $1,875,000.00 $2,625,000.00 $4,500,000.00
0000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxx
Telecopy: (000) 000-0000
-------------- -------------- --------------
TOTAL $25,000,000.00 $35,000,000.00 $60,000,000.00
============== ============== ==============
132
Schedule II
to Credit Agreement
Applicable Margin Step-Downs(1)
=========================================================================================================================
Consolidated
Interest Eurodollar ABR
Coverage Leverage Applicable Applicable Commitment
Ratio Ratio Margin Margin Fee
-------------------------------------------------------------------------------------------------------------------------
less than or = 2.25x greater than or = 4.50x 2.750% 1.750% 0.500%
-------------------------------------------------------------------------------------------------------------------------
greater than 2.25x greater than 4.50x 2.500% 1.500% 0.500%
-------------------------------------------------------------------------------------------------------------------------
greater than 2.50x greater than 4.00x 2.250% 1.250% 0.375%
-------------------------------------------------------------------------------------------------------------------------
greater than 2.75x greater than 3.50x 2.000% 1.000% 0.375%
-------------------------------------------------------------------------------------------------------------------------
greater than 3.00x greater than 3.00x 1.750% 0.750% 0.375%
=========================================================================================================================
---------------------------
(1) If the calculation of the ratios set forth in the table would result in
different Applicable Margins, the greater Applicable Margin will apply.
133
Schedule III
to Credit Agreement
Lockbox Banks
Lockbox Account
Bank of America, Illinois
Global Payment Services
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Depository Accounts
Bank of America, California
Account Administration -- 5693
0000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
Shoreline Bank
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
134
Schedule 3.1
Letters of Credit
See Attached
135
Attachment A
to Schedule 3.1
OUTSTANDING LETTERS OF CREDIT
**AS OF FEBRUARY 5, 1997** JANUARY, 1997 06-Feb-97
Issuers Outstanding Expiration Issuer
L/C# Beneficiary Applicant Amount Amount Date Date
BANK: CHASE MANHATTAN BANK NEW YORK
B994445(C) Pen Shien Industrial Altec/E.V. 24,174.30 7,707.80 04/25/97 10/22/96
B994447(C) Pen Shien Industrial Altec/E.V. 10,530.65 4,430.65 03/25/97 11/21/96
B994448(C) Tytech, Inc. Altec/E.V. 311,800.00 311,800.00 02/28/97 12/10/96
BANK: CHASE MANHATTAN BANK DELAWARE
83144(C) Proton Electronic Industrial Co. E.V. 850,000.00 658,639.60 1/21/98 11/19/96
83167(C) Universal Electronics & Comp. E.V. 125,000.00 120,849.17 5/31/97 01/21/97
83170(C) Azden Corporation E.V. 60,000.00 60,000.00 5/31/97 01/21/97
83171(C) Pen Shien Industrial E.V. 35,000.00 35,000.00 5/31/97 01/21/97
83172(C) Tytech, Inc. E.V. 300,000.00 300,000.00 5/31/97 01/21/97
83173(C) Group West International E.V. 35,000.00 35,000.00 5/31/97 01/21/97
83174(C) Tory, LTD. E.V. 50,000.00 50,000.00 5/31/97 01/21/97
83175(C) Samick Musical Instruments E.V. 115,000.00 115,000.00 5/31/97 01/21/97
83176(C) Korea Ricetro-Devices MFG. E.V. 175,000.00 175,000.00 5/31/97 01/21/97
83177(C) Toryo Xxxxx Company, Inc. E.V. 85,000.00 75,857.60 5/31/97 01/21/97
83178(C) Inter M E.V. 350,000.00 300,000.00 5/31/97 01/21/97
83179(C) Phomic Corporation E.V. 40,000.00 40,000.00 5/31/97 01/21/97
Chase Manhattan Total $2,576,504.95 $2,349,284.82 (S) $0.00
(C) $2,349,284.87
TOTAL= $2,349,284.82
Note: (S) = STANDBY
(C) = COMMERCIAL
136
Schedule 5.2(a)
Material Adverse Effect Disclosure
See Schedule 4.10 of the Stock Purchase Agreement.
137
Schedule 5.4
Consents Required
Landlord's consent required for Austin Sub-lease, between Xxxx XX Industries,
Inc. and Electro-Voice Incorporated, with respect to leased property located at
0000X Xxxxxxx Xxxx, Xxxxxx, Xxxxx (Xxxxxx County).
2
138
Schedule 5.6
Litigation
See Schedule 4.15 of the Stock Purchase Agreement.
139
Schedule 5.8
Mortgaged Real Property
0000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxx, XX 00000
Los Angeles County
00000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Los Angeles County
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Berrien County
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Berrien County
00000 Xxxx Xxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Canadian County
000 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxx County
0000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx, XX 00000
Xxxxxx County
140
Schedule 5.9
Intellectual Property Claims
None.
141
Schedule 5.14
Lien Searches and Filing Jurisdictions
I. Lien Search Jurisdictions
Searches have been conducted against the following debtors in the
following locations:
A. ALTEC LANSING INTERNATIONAL
Secretary of State of:
Michigan
New York
Oklahoma
County or City of:
Berrien County, Michigan
Erie County, New York
Canadian County, Oklahoma
B. CETEC CORP. INC.
Secretary of State of:
California
Delaware
Michigan
New York
County or City of:
Los Angeles County, California
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
142
C. ELECTROSOUND OR ELECTRO-SOUND
Secretary of State of:
California
Delaware
Michigan
New York
County or City of:
Los Angeles County, California
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
D. ELECTRO-VOICE, INCORPORATED
Secretary of State of:
Delaware
Indiana
Michigan
New York
Oklahoma
Tennessee
County or City of:
County of Newcastle, Delaware
St. Xxxxxx County, Indiana
Berrien County, Michigan
Erie County, New York
Canadian County, Oklahoma
Xxxxxx County, Tennessee
Xxxxx County, Tennessee
2
143
X. XXXXX
Secretary of State of:
California
County or City of:
Los Angeles County, California
F. GULTON INDUSTRIES, INC.
Secretary of State of:
Delaware
Michigan
New York
Tennessee
County or City of:
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
Xxxxx County, Tennessee
G. LFE CORPORATION
Secretary of State of:
California
Delaware
Michigan
New York
County or City of:
Los Angeles County, California
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
3
144
H. XXXX XX AUDIO, INC.
Secretary of State of:
Delaware
Michigan
New York
Texas
County or City of:
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
Xxxxxx County, Texas
I. XXXX XX AUDIO MAGNETIC, INC.
Secretary of State of:
California
Delaware
Michigan
New York
County or City of:
Los Angeles County, California
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
J. XXXX XX INDUSTRIES, INC.
Secretary of State of:
Delaware
Michigan
Xxx Xxxx
Xxxxx
0
000
Xxxxxx xx Xxxx of:
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
Xxxxxx County, Texas
K. XXXX XX PRO AUDIO
Secretary of State of:
Michigan
County or City of:
Berrien County, Michigan
L. XXXX XX SALES, INC.
Secretary of State of:
Texas
M. XXXX XX EQUIPMENT, INC.
Secretary of State of:
Texas
N. XXXX XX ENTERPRISES, INC.
Secretary of State of:
Texas
O. XXXX XX AUDIO NORTH AMERICA
Secretary of State of:
Michigan
County or City of:
Berrien County, Michigan
5
146
P. XXXX XX AUDIO SYSTEMS
Secretary of State of:
Texas
County or City of:
Xxxxxx County, Texas
Q. PINNACLE AUDIO
Secretary of State of:
California
Delaware
County or City of:
Los Angeles County, California
County of Newcastle, Delaware
R. UNIVERSITY SOUND
Secretary of State of:
California
Delaware
County or City of:
Los Angeles County, California
County of Newcastle, Delaware
X. XXXX
Secretary of State of:
California
County or City of:
Los Angeles County, California
6
147
X. XXXX IND.
Secretary of State of:
California
Delaware
Michigan
New York
County or City of:
Los Angeles County, California
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
X. XXXX IND. INC.
Secretary of State of:
California
Delaware
Michigan
New York
County or City of:
Los Angeles County, California
County of Newcastle, Delaware
Berrien County, Michigan
Erie County, New York
X. XXXX INC.
Secretary of State of:
California
County or City of:
Los Angeles County, California
7
148
II. Filing Jurisdictions
Secretary of State of:
California
Indiana
Michigan
Oklahoma
Tennessee
Texas
City or County:
Los Angeles County, California
St. Xxxxxx County, Indiana
Berrien County, Michigan
Canadian County, Oklahoma
Xxxxx County, Tennessee
Xxxxxx County, Tennessee
Xxxxxx County, Texas
8
149
Schedule 5.16
Subsidiaries
FIRST TIER SUBSIDIARIES
EV International, Inc. is the direct owner of all of the issued and outstanding
stock of:
EVI Audio International Holding Corporation, Inc., a Delaware corporation, a
First Tier Subsidiary.
SECOND TIER SUBSIDIARIES
EVI Audio International Holding Corporation, Inc. is the owner of all the issued
or outstanding capital stock of the following Second Tier Subsidiaries except as
noted below*:
(a) Xxxx XX Audio Canada, Inc., a Canadian corporation;
(b) Altec Lansing International, a United Kingdom corporation;
(c) Xxxx XX Hong Kong Limited, a Hong Kong corporation ("Xxxx XX Hong
Kong"), with the exception of one share;
(d) Xxxx XX Audio Japan Ltd., a Japanese corporation;
(e) Xxxx XX Audio France S.A., a French corporation;
(f) Klark-Teknik PLC, a United Kingdom corporation ("Klark-Teknik");
------------------
* See Attachment A hereto for a list of changes expected to be made to
names of certain Second and Third Tier Subsidiaries following the
closing under the Stock Purchase Agreement and the consummation of the
Mergers.
150
(g) Xxxx XX Audio (Europe) A.G., a Swiss corporation, with the exception of
three shares;
(h) Xxxx XX Audio Pty Ltd., an Australian corporation; and
(i) Dynacord Audio GmbH, a German corporation ("Dynacord GmbH")**, with the
exception of one share.
THIRD TIER SUBSIDIARIES
Xxxx XX Hong Kong is the owner of all the issued and outstanding stock of the
following Third Tier Subsidiary, except as noted below:
Audio Consultants Co., Limited, a Hong Kong corporation, with the exception of
one share.
Dynacord GmbH is the owner of all the issued and outstanding stock of the
following Third Tier Subsidiary, except as noted below:
(a) Dynacord S.A., a French corporation, with the exception of seven
shares; and
(b) EVI Audio GmbH, a German corporation.
Klark-Teknik is the owner of all the issued and outstanding stock of the
following Third Tier Subsidiaries:
(a) Cetec International Limited, a United Kingdom corporation;
(b) Rebis Audio Limited, a United Kingdom corporation;
(c) Xxxxxxx Xxxxxx Associates Limited, a United Kingdom corporation; and
------------------
** Beneficial ownership transferred pursuant to a Transfer Agreement on
2-10-97; registration of transfer to be effected.
2
151
(d) Nivenfield (1992) Limited, a United Kingdom corporation.
FOURTH TIER SUBSIDIARIES
EVI Audio GmbH is the owner of all the issued and outstanding capital stock of
the following Fourth Tier Subsidiary:
Dynacord KG, a German partnership.
3
152
Attachment A to Schedule 5.16
As of the date hereof, certain Second and Third Tier Subsidiaries are intended
to be renamed as follows:
1. Xxxx XX Audio (Europe) A.G. will become EVI Audio
(Switzerland) A.G.
2. Xxxx XX Audio Pty. Ltd. will become EVI Audio (Aust) Pty. Ltd.
3. Xxxx XX Audio France S.A. will become EVI Audio France S.A.
4. Xxxx XX Audio Japan Ltd. will become EVI Audio Japan Ltd.
5. Xxxx XX Audio Canada, Inc. will become EVI Audio Canada, Inc.
6. Klark-Teknik PLC will become EVI Audio (U.K.) PLC.
7. Dynacord Audio GmbH will become EVI Audio Holding Deutschland
GmbH.
8. Xxxx XX Hong Kong Limited will become EVI Audio (Hong Kong)
Limited.
4
153
Schedule 6.1(o)
Local Counsel Jurisdictions
California
Michigan
Oklahoma
Tennessee
154
Schedule 7.9(c)
Leased U.S. Inventory Locations
0000 Xxxxxxx Xxxxx
Xx Xxxxx, XX 00000
Los Angeles County
0000 Xxxxxxxx Xxxx.
Xxx Xxxxxx, XX 00000
Los Angeles County
000 X. Xxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
St. Xxxxxx County
000 Xxxx Xxxx
Xxxxxxxx, XX 00000
Berrien County
Express One
000 Xxxx Xxxx
Xxxxxxxx, XX 00000
Berrien County
Building 2
000 Xxxxx Xxxxxx
Xxxxx, XX 00000
Berrien Xxxxxx
Xxxxxx Xx.
Xxxxxxx, XX 00000
Xxxxx County
0000 Xxxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxx County
155
Schedule 8.2(g)
Permitted Indebtedness
1. Domestic Indebtedness
As of the date hereof, funds have been deposited in an escrow account
to provide for the payment, after the Effective Date, of all of the
Indebtedness (and all accrued and unpaid interest thereon) evidenced by
a Deed of Trust Note, dated February 11, 1980, by Cetec Corporation
(predecessor corporation to LFE Corporation) to Teachers Insurance and
Annuity Association of America, in the original principal amount of
U.S. $490,000.
2
156
Schedule 8.3(j)
Permitted Liens
1. UCC Financing Statements
[see attached]
2. Xxxx XX Audio Canada Inc.
Debtor: Xxxx XX Audio Canada, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx, X0X 0X0
Secured Party: Pitney Xxxxx Leasing
a division of Pitney Xxxxx of
Canada Ltd.
0000 X. Xxxxxxxx Xxx,
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx, X0X 0X0
Registration No.: 920117 0000 0000 0000
Collateral: Miscellaneous office equipment
157
Attachment to Schedule 8.3(j)
Uniform Commercial Code
Financing Statements
-------------------------------------------------------------------------------------------------------------------------
Jurisdiction Debtor Secured Party Collateral File Date File No.
-------------------------------------------------------------------------------------------------------------------------
INDIANA Electro- Voice Xxxxx Remco, Inc. Savin 9520 3/9/95 1972127
Indiana Secretary of State Copier
-------------------------------------------------------------------------------------------------------------------------
MICHIGAN
Michigan Secretary of State Electro- Voice, Inc. Ameritech Credit Telephone 11/2/88 C139915
Corp. Equipment
Michigan Secretary of State Electro- Voice, Inc. Ameritech Credit Telephone 6/10/91 C488243
Corp. Equipment Amendment to
C139915 -
Change of
Address of
Debtor
Michigan Secretary of State Electro- Voice, Inc. Ameritech Credit Addition of 9/29/93 35541B
Corp. excessions, Continuation
additions and of C139915
replacements to
above
Michigan Secretary of State Electro- Voice, Inc. Ameritech Credit Addition of 9/29/93 35542B
Corp. excessions,
additions and
replacements
to above
-------------------------------------------------------------------------------------------------------------------------
158
-----------------------------------------------------------------------------------------------------------------------------------
Jurisdiction Debtor Secured Party Collateral File Date File No.
-----------------------------------------------------------------------------------------------------------------------------------
Michigan Secretary of State Electro- Voice, Inc. Mid West Commerce Copy Equipment 1/19/93 C675285
Leasing
Michigan Secretary of State Electro- Voice, Inc. Mid West Commerce Copy Equipment 2/8/93 C682853
Leasing
Michigan Secretary of State Electro- Voice, Inc. Ameritech Credit Tele- 3/22/93 29075B
Corp. communications
Equipment
Michigan Secretary of State Electro- Voice, Inc. Ameritech Credit Tele- 3/22/93 29076B
Corp. communications
Equipment
Michigan Secretary of State Electro- Voice, Inc. Mid West Commerce Copy Equipment 4/5/93 C702024
Leasing
Michigan Secretary of State Electro- Voice, Inc. Mid West
Commerce Leasing General Equipment 4/12/93 C704196
Michigan Secretary of State Electro- Voice, Inc. NBD Equipment Copy Equipment 12/15/95 D043383
Finance, Inc. Lease
-----------------------------------------------------------------------------------------------------------------------------------
TENNESSEE
Xxxxx County Register of Deeds Electro- Voice, Inc. Biltmore Copy Equipment 6/16/87 42417
Leasing, Inc. and General
Office
Equipment
Lease
-----------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA
Oklahoma Secretary of State Altec Lansing Zeno Systems Copy Equipment 12/28/93 067692
Corporation
-----------------------------------------------------------------------------------------------------------------------------------
2
159
Schedule 8.4(a)
Permitted Guarantee Obligations
1. German Guarantee Obligation
Guarantee by EVI Audio Gmbh in favor of Banque Hervet to secure
indebtedness of Xxxx XX Audio France S.A. under a line of credit of
Xxxx XX Audio France S.A.
2. Hong Kong Guarantee Obligations
1. Guarantees provided by Xxxx XX Audio (Hong Kong) Limited dated
September 29, 1995 in favor of Audio Consultants Co. Limited
in the maximum amount of HKD $14,250,000.00.
2. Guarantee provided by Audio Consultants Co. Limited dated
September 29, 1995 in favor of Xxxx XX Audio (Hong Kong)
Limited in the maximum amount of HKD $14,250,000.00.
3. Guarantee of LFE Corporation
Guarantee of LFE Corporation (formerly Cetec Corporation) of the
underlease of Xxxx 0X, XX Xxxxxxxxx Xxxxxxxxxx Xxxxxx, Wembley, leased
by Cetec International Limited.
4. Guarantee of Xxxx XX Audio A.G.
Guarantee of Xxxx XX Audio A.G. of obligation of Shuttlesound Limited
to pay Xxxx Xxxxxx a sum as compensation for loss of employment at
Shuttlesound Limited.
160
Schedule 8.9(c)
Permitted Investments
1. Any Investment arising as a result of the exercise of the option
granted pursuant to an Option Agreement, dated May 26, 1995, between
X.X. Xxxxx, Esq., and Xxxx XX Audio A.G. Under such Option Agreement
Xxxx XX Audio A.G. has an option to purchase such of the Option Shares
(as defined below) of Shuttlesound Limited as are owned by X.X. Xxxxx,
Esq. at a price of pound sterling1.82 per share. (The "Option Shares"
are defined as 17,000 shares of stock of pound sterling1 each, fully
paid in).
2. Any Investment arising as a result of the exercise of the option
granted pursuant to an Option Agreement, dated November 30, 1994,
between Xxxx Xxxxxxx Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx Xxxxxx (together,
the "Grantors") and Xxxx XX Audio A.G. Under such Option Agreement Xxxx
XX Audio A.G. has the right to purchase such of the Option Shares (as
defined below) as are owned by the Grantors, at a price of pound
sterling1.82 per share. (The "Option Shares" are defined as 27,500
shares of stock of pound sterling1 each, fully paid in.)
3. Loan Agreement between Xxxx XX Audio A.G. and Xxxxxx Xxxxxxxxx Mutton
in the amount of pound sterling 10,010.
2
161
Schedule 8.10
Permitted Transactions with Affiliates
Xxxx XX Audio Canada
1. Indemnity agreements by Xxxx XX Audio Canada, Inc., dated March 19,
1992, in favor of the following directors and officers of Xxxx XX Audio Canada,
Inc.:
a. Xxx X. Xxxxxxx
b. Xxxxxxx X. Xxxxxxxx
x. Xxxxxxx X. Xxxxxxx
d. Xxxx X. Xxxxx
e. Xxxxxxxx X. Xxxx
f. Xxxxxx X. Xxxxxx
g. Xxxxx X. Xxxxx
h. Xxxxxx Xxxxxxxx
i. Xxxxx Xxxxxxx, Jr.
j. Xxxxxxx XxxXxxxxx
k. Xxxx X. XxXxxxx
l. Xxxxxx X. Xxxxx
m. Xxxxxxxx X. Xxxxxxxx
n. Xxxxxxx Xxxxxxx
2. Xxxx XX Audio Canada, Inc. guarantees three MasterCard accounts on
behalf of three of its employees, with a maximum liability of $15,000 Canadian
Dollars.
162
EXHIBIT A-1 TO
CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$_____________ New York, New York
February __, 1997
FOR VALUE RECEIVED, the undersigned, EV INTERNATIONAL, INC., a
Delaware corporation formerly named Electro-Voice, Incorporated (the
"Borrower"), hereby unconditionally promises to pay to the order of
_____________ (the "Lender") and its successors and assigns, at the office of
The Chase Manhattan Bank, located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
in lawful money of the United States of America and in immediately available
funds, the aggregate unpaid principal amount of the Revolving Credit Loans made
by the Lender to the undersigned pursuant to subsection 2.1 of the Senior
Secured Credit Agreement, as defined below, which sum shall be payable on the
Termination Date.
The Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount hereof from time to time at the
applicable rates per annum and on the dates set forth in subsection 4.1 of the
Senior Secured Credit Agreement until such principal amount is paid in full
(both before and after judgment).
This Revolving Credit Note is one of the Revolving Credit
Notes referred to in, and is subject in all respects to, the Credit Agreement,
dated as of February __, 1997 (as amended, supplemented, waived or otherwise
modified from time to time, the "Senior Secured Credit Agreement"), among the
Borrower, the several banks and other financial institutions from time to time
parties thereto (including the Lender), and The Chase Manhattan Bank, as
administrative agent for such banks and financial institutions, and is entitled
to the benefits thereof, is secured and guaranteed as provided therein and is
subject to optional and mandatory prepayment in whole or in part as provided
therein. Each holder hereof, by its acceptance of this Revolving Credit Note,
agrees to the terms of, and to be bound by and to observe the provisions
applicable to the Lenders contained in, the Senior Secured Credit Agreement.
Terms used herein which are defined in the Senior Secured Credit Agreement shall
have such defined meanings unless otherwise defined herein or unless the context
otherwise requires.
163
2
Upon the occurrence of any one or more of the Events of
Default specified in the Senior Secured Credit Agreement, all amounts then
remaining unpaid on this Revolving Credit Note shall become, or may be declared
to be, immediately due and payable, all as provided therein.
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
EV INTERNATIONAL, INC.
By:_____________________________________
Title:
164
EXHIBIT A-2 TO
CREDIT AGREEMENT
FORM OF TERM NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$____________ New York, New York
February __, 1997
FOR VALUE RECEIVED, the undersigned, EV INTERNATIONAL, INC., a
Delaware corporation formerly named Electro-Voice, Incorporated (the
"Borrower"), hereby unconditionally promises to pay to the order of
_____________ (the "Lender") and its successors and assigns, at the office of
The Chase Manhattan Bank, located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
in lawful money of the United States of America and in immediately available
funds, the principal amount of the lesser of (a) ___________________________
DOLLARS ($____________) and (b) the aggregate unpaid principal amount of the
Term Loan made by the Lender to the undersigned pursuant to subsection 2.6 of
the Senior Secured Credit Agreement, as defined below, which sum shall be
payable in accordance with subsection 2.7(b) of the Senior Secured Credit
Agreement in __ consecutive __________ installments, commencing on _________ __,
199_, each such installment to be in an amount equal to the Lender's Term Loan
Percentage of the amount set forth next to the applicable installment date in
such subsection 2.7(b).
The Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount hereof from time to time at the
applicable rates per annum and on the dates set forth in subsection 4.1 of the
Senior Secured Credit Agreement until such principal amount is paid in full
(both before and after judgment).
This Term Note is one of the Term Notes referred to in, and is
subject in all respects to, the Credit Agreement, dated as of February __, 1997
(as amended, supplemented, waived or otherwise modified from time to time, the
"Senior Secured Credit Agreement"), among the Borrower, the several banks and
other financial institutions from time to time parties thereto (including the
Lender), and The Chase Manhattan Bank, as administrative agent for such banks
and financial institutions, and is entitled to the benefits thereof, is secured
and guaranteed as provided therein and is subject to optional and mandatory
prepayment in whole or in part as provided therein. Each holder hereof, by its
acceptance of this Term Note, agrees
165
2
to the terms of, and to be bound by and to observe the provisions applicable to
the Lenders contained in, the Senior Secured Credit Agreement. Terms used herein
which are defined in the Senior Secured Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.
Upon the occurrence of any one or more of the Events of
Default specified in the Senior Secured Credit Agreement, all amounts then
remaining unpaid on this Term Note shall become, or may be declared to be,
immediately due and payable, all as provided therein.
THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
EV INTERNATIONAL, INC.
By:_____________________________________
Title:
166
EXHIBIT A-3 TO
CREDIT AGREEMENT
FORM OF SWING LINE NOTE
$____________ New York, New York
February __, 1997
FOR VALUE RECEIVED, the undersigned, EV INTERNATIONAL, INC., a
Delaware corporation formerly named Electro-Voice, Incorporated (the
"Borrower"), hereby unconditionally promises to pay to the order of THE CHASE
MANHATTAN BANK (the "Swing Line Lender") and its successors and assigns, at the
office of Chemical Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in lawful
money of the United States of America and in immediately available funds, the
principal amount of the lesser of (a) __________________________ DOLLARS
($____________) and (b) the aggregate unpaid principal amount of all Swing Line
Loans made by the Swing Line Lender to the undersigned pursuant to subsection
2.5 of the Senior Secured Credit Agreement, as defined below, which sum shall be
payable on the Termination Date.
The Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount hereof from time to time at the
applicable rates per annum and on the dates set forth in subsection 4.1 of the
Credit Agreement until paid in full (both before and after judgment).
This Swing Line Note is the Swing Line Note referred to in,
and is subject in all respects to, the Credit Agreement, dated as of February
__, 1997 (as amended, supplemented, waived or otherwise modified from time to
time, the "Senior Secured Credit Agreement"), among the Borrower, the several
banks and other financial institutions from time to time parties thereto
(including the Swing Line Lender), and The Chase Manhattan Bank, as
administrative agent for such banks and financial institutions, and is entitled
to the benefits thereof, is secured and guaranteed as provided therein and is
subject to optional and mandatory prepayment in whole or in part as provided
therein. Each holder hereof, by its acceptance of this Swing Line Note, agrees
to the terms of, and to be bound by and to observe the provisions applicable to
the Lenders contained in, the Senior Secured Credit Agreement. Terms used herein
which are defined in the Credit Agreement shall have such defined meanings
unless otherwise defined herein or unless the context otherwise requires.
Upon the occurrence of any one or more of the Events of
Default specified in the Credit Agreement, all amounts remaining unpaid on this
Swing Line Note shall become, or may be declared to be, immediately due and
payable all as provided therein.
167
2
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
EV INTERNATIONAL, INC.
By:_____________________________________
Title:
168
EXHIBIT B TO
CREDIT AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT
made by
EV INTERNATIONAL, INC.
and its parent
EVI AUDIO HOLDING, INC.
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of February 10, 1997
169
Page
----
SCHEDULES
1 Notice Addresses of Guarantors
2 Description of Pledged Securities
3 Location of Jurisdiction of Organization and Chief Executive Office or
Sole Place of Business
4 Location of Inventory and Equipment
5 Copyrights and Copyright Licenses; Patents and Patent Licenses; Trademarks
and Trademark Licenses
6 Existing Prior Liens
7 Accounts
8 Contracts
ANNEXES
1 Assumption Agreement
iv
170
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS.................................................. 2
1.1 Definitions..................................................... 2
1.2 Other Definitional Provisions................................... 8
SECTION 2. GUARANTEE...................................................... 8
2.1 Guarantee....................................................... 8
2.2 Right of Contribution........................................... 9
2.3 No Subrogation.................................................. 9
2.4 Amendments, etc. with respect to the Borrower Obligations....... 10
2.5 Guarantee Absolute and Unconditional............................ 10
2.6 Reinstatement................................................... 11
2.7 Payments........................................................ 12
SECTION 3. GRANT OF SECURITY INTEREST..................................... 12
SECTION 4. REPRESENTATIONS AND WARRANTIES................................. 13
4.1 Representations and Warranties of Each Guarantor.............. 13
4.2 Representations and Warranties of Each Grantor................ 13
4.2.1 Title; No Other Liens......................................... 13
4.2.2 Perfected First Priority Liens................................ 14
4.2.3 Chief Executive Office........................................ 15
4.2.4 Inventory and Equipment....................................... 15
4.2.5 Farm Products................................................. 15
4.2.6 Accounts...................................................... 15
4.2.7 Intellectual Property......................................... 15
4.3 Representations and Warranties of Each Pledgor................ 15
SECTION 5. COVENANTS...................................................... 16
5.1 Covenants of Each Guarantor................................... 16
5.2 Covenants of Each Grantor..................................... 16
5.2.1 Delivery of Instruments and Chattel Paper..................... 17
5.2.2 Maintenance of Insurance...................................... 17
5.2.3 Payment of Obligations........................................ 17
5.2.4 Maintenance of Perfected Security Interest; Further
Documentation ................................................ 17
5.2.5 Changes in Locations, Name, etc............................... 18
5.2.6 Notices....................................................... 18
5.2.7 Pledged Securities............................................ 19
i
171
5.2.8 Accounts...................................................... 19
5.2.9 Maintenance of Records........................................ 19
5.2.10 Acquisition of Intellectual Property......................... 19
5.2.11 Protection of Trade Secrets.................................. 20
5.3 Covenants of Each Pledgor................................... 20
5.4 Covenants of Holdings........................................... 21
SECTION 6. REMEDIAL PROVISIONS............................................ 22
6.1 Certain Matters Relating to Accounts............................ 22
6.2 Communications with Obligors; Grantors Remain Liable............ 25
6.3 Pledged Stock................................................... 25
6.4 Proceeds to be Turned Over To Administrative Agent.............. 26
6.5 Application of Proceeds......................................... 27
6.6 Code and Other Remedies......................................... 27
6.7 Registration Rights............................................. 28
6.8 Waiver; Deficiency.............................................. 29
SECTION 7. THE ADMINISTRATIVE AGENT....................................... 29
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc..... 29
7.2 Duty of Administrative Agent.................................... 31
7.3 Execution of Financing Statements............................... 32
7.4 Authority of Administrative Agent............................... 32
7.5 Right Of Inspection............................................. 32
SECTION 8. MISCELLANEOUS.................................................. 33
8.1 Amendments in Writing........................................... 33
8.2 Notices......................................................... 33
8.3 No Waiver by Course of Conduct; Cumulative Remedies............. 33
8.4 Enforcement Expenses; Indemnification........................... 33
8.5 Successors and Assigns.......................................... 34
8.6 Set-Off......................................................... 34
8.7 Counterparts.................................................... 34
8.8 Severability.................................................... 34
8.9 Section Headings................................................ 35
8.10 Integration.................................................... 35
8.11 GOVERNING LAW.................................................. 35
8.12 Submission To Jurisdiction; Waivers............................ 35
8.13 Acknowledgements............................................... 36
8.14 WAIVER OF JURY TRIAL........................................... 36
ii
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8.15 Additional Granting Parties.................................... 36
8.16 Releases....................................................... 36
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FORM OF GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of February __, 1997,
made by EVI Audio Holding, Inc. a Delaware corporation formerly named Gulton
Holding Corp. ("Holdings"), EV International, Inc., a Delaware corporation
formerly named Electro-Voice, Incorporated (the "Borrower") and successor by
merger to the Merged Companies referred to below (Holdings and the Borrower,
together with any other Subsidiary of the Borrower that becomes a party hereto
from time to time after the date hereof, the ("Granting Parties"), in favor of
The Chase Manhattan Bank, as administrative agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions (the
"Lenders") from time to time parties to the Credit Agreement, dated as of
February __, 1997 (as amended, waived, supplemented or otherwise modified from
time to time, the "Senior Secured Credit Agreement"), among the Borrower (as
successor by merger to Gulton Acquisition Corp.), the Lenders and the
Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Senior Secured Credit Agreement, the
Lenders have severally agreed to make extensions of credit to the Borrower upon
the terms and subject to the conditions set forth therein;
WHEREAS, on the date hereof, the following transactions have
occurred or are occurring:
(i) Holdings through its subsidiary Gulton Acquisition Corp., a
Delaware corporation ("Acquisition Co."), is acquiring the capital stock
of Gulton Industries, Inc., a Delaware corporation ("GII"), the parent of
each of LFE Corporation, Xxxx XX Audio, Inc. and Xxxx XX Audio Magnetic,
Inc., each a Delaware corporation (together with Acquisition Co. and GII,
the "Merged Companies"), and the parent of the Borrower,
(ii) Acquisition Co. is merging with and into GII, with GII
surviving, and GII and the other Merged Companies are merging with and
into the Borrower, with the Borrower surviving and being renamed EV
International, Inc., and succeeding by operation of such mergers to all
the rights and obligations of Acquisition Co. under the Senior Secured
Credit Agreement and becoming the Borrower thereunder, and
(iii) the Borrower is contributing, assigning and transferring to
its wholly owned subsidiary EVI Audio International Holding Corporation,
Inc., a Delaware corporation ("EVI Audio"), all of the capital stock of
the Borrower's other subsidiaries
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held by the Borrower on the date hereof, other than the Excluded Foreign
Subsidiary Stock (as defined herein);
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes or will include each other Granting Party;
WHEREAS, the proceeds of the extensions of credit will be used in
part to enable the Borrower to make valuable transfers to one or more of the
other Granting Party in connection with the operation of their respective
businesses;
WHEREAS, the Borrower and the other Granting Parties are engaged in
related businesses, and each such Granting Party will derive substantial direct
and indirect benefit from the making of the extensions of credit under the
Senior Secured Credit Agreement; and
WHEREAS, it is a condition to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Senior Secured
Credit Agreement that the Granting Parties shall execute and deliver this
Agreement to the Administrative Agent for the benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Senior Secured Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Granting Party hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined
in the Senior Secured Credit Agreement and used herein shall have the meanings
given to them in the Senior Secured Credit Agreement, and the following terms
which are defined in the Code (as defined below) are used herein as so defined:
Chattel Paper, Documents, Equipment, Farm Products, Fixtures, Instruments and
Inventory.
(b) The following terms shall have the following meanings:
"Accounts": all accounts (as defined in the Code) of the Borrower,
including, without limitation all Accounts (as defined in the Senior
Secured Credit Agreement) of the Borrower.
"Agreement": this Guarantee and Collateral Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
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"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans and Reimbursement Obligations and
all other obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in the
Senior Secured Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable
rate provided in the Senior Secured Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding) to the Administrative Agent or any Lender (or, in the case of
any Hedge Agreement referred to below, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or
in connection with, the Senior Secured Credit Agreement, this Agreement,
the other Loan Documents and any Letter of Credit or any Hedge Agreement
entered into by the Borrower with any Lender (or, in the case of any Hedge
Agreement, any Affiliate of any Lender) or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or to
the Lenders that are required to be paid by the Borrower pursuant to the
terms of any of the foregoing agreements).
"Code": the Uniform Commercial Code as from time to time in effect
in the State of New York.
"Collateral": as defined in Section 3.
"Collateral Account Bank": The Chase Manhattan Bank or another bank
which at all times is a Lender as selected by the Borrower and notified to
the Administrative Agent in writing promptly following such selection.
"Collateral Proceeds Account": the cash collateral account
established by the relevant Grantor at an office of the Collateral Account
Bank in the name of the Administrative Agent.
"Commitments": the collective reference to the Revolving Credit
Commitments, the Swing Line Commitment, the Term Loan Commitments and the
L/C Commitment; individually, a "Commitment".
"Contracts" with respect to any Grantor, all contracts, agreements,
instruments and indentures in any form, and portions thereof (except for
the contracts listed on Schedule 8), to which such Grantor is a party or
under which such Grantor has any right, title or interest or to which such
Grantor or any property of such Grantor is subject, as the same may from
time to time be amended, supplemented or otherwise modified, including,
without limitation, (i) all rights of such Grantor to receive moneys
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due and to become due to it thereunder or in connection therewith, (ii)
all rights of such Grantor to damages arising thereunder and (iii) all
rights of such Grantor to perform and to exercise all remedies thereunder.
"Copyright Licenses": with respect to any Grantor, all United States
written license agreements of such Grantor providing for the grant by or
to such Grantor of any right to use any Copyright of such Grantor, other
than intercompany agreements, including, without limitation, any license
agreements listed on Schedule 5 hereto subject, in each case, to the terms
of such license agreements, and the right to prepare for sale, sell and
advertise for sale, all Inventory now or hereafter covered by such
licenses.
"Copyrights": with respect to any Grantor, all of such Grantor's
right, title and interest in and to all United States copyrights, whether
or not the underlying works of authorship have been published or
registered, United States copyright registrations and copyright
applications, and (a) all renewals thereof, (b) all income, royalties,
damages and payments now and hereafter due and/or payable with respect
thereto, including, without limitation, payments under all licenses
entered into in connection therewith, and damages and payments for past or
future infringements thereof and (c) the right to xxx or otherwise recover
for past, present and future infringements and misappropriations thereof.
"Default": a "Default" as defined in the Senior Secured Credit
Agreement.
"Event of Default": an "Event of Default" as defined in the Senior
Secured Credit Agreement.
"Excluded Foreign Subsidiary Stock": one share of EVI Audio GmbH, a
German company; three shares of Xxxx XX Audio (Europe) AG, a Swiss
company; seven shares of Xxxx XX France S.A., a French company; seven
shares of Dynacord France S.A., a French company; one share of Xxxx XX
(Hong Kong) Limited, a Hong Kong company; and one share of Audio
Consultants Co., Limited, a Hong Kong company.
"General Fund Account": the general fund account of the relevant
Grantor established at the same office of the Collateral Account Bank as
the Collateral Proceeds Account.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof.
"Granting Parties": as defined in the initial paragraph hereof.
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"Grantor": the Borrower and each Domestic Subsidiary of the Borrower
that from time to time becomes a party hereto.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement or any other Loan Document to which such
Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Lenders that are required to
be paid by such Guarantor pursuant to the terms of this Agreement or any
other Loan Document).
"Guarantors": the collective reference to each Granting Party other
than the Borrower.
"Hedge Agreements": as to any Grantor, all interest rate swaps, caps
or collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest obligations,
either generally or under specific contingencies, including, without
limitation, all Interest Rate Protection Agreements and Permitted Hedging
Arrangements with respect to currency exchange rates.
"Intellectual Property": with respect to any Grantor, the collective
reference to such Grantor's Copyrights, Copyright Licenses, Patents,
Patent Licenses, Trade Secrets, Trademarks and Trademark Licenses.
"Intercompany Note": with respect to any Grantor, any promissory
note evidencing loans made by such Grantor to the Borrower or any of its
Subsidiaries.
"Issuers": the collective reference to the Persons identified on
Schedule 2 as the issuers of the Pledged Stock.
"Inventory": with respect to any Grantor, all inventory (as defined
in the Code) of such Grantor, including, without limitation, all Inventory
(as defined in the Senior Secured Credit Agreement) of the Borrower.
"Loan Documents": the collective reference to the "Loan Documents"
as defined in the Senior Secured Credit Agreement.
"Loans": the collective reference to the "Loans" as defined in the
Senior Secured Credit Agreement.
"Lockbox System": the system, if any, of lockboxes and related
deposit accounts established and maintained pursuant to Section 6.1(d) of
this Agreement.
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"Notes": the collective reference to the "Notes" as defined in the
Senior Secured Credit Agreement.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patent Licenses": with respect to any Grantor, all United States
written license agreements of such Grantor with any Person who is not an
Affiliate or a Subsidiary in connection with any of the Patents of such
Grantor or such other Person's patents, whether such Grantor is a licensor
or a licensee under any such agreement, including, without limitation, the
license agreements listed on Schedule 5, subject, in each case, to the
terms of such license agreements, and the right to prepare for sale, sell
and advertise for sale, all Inventory now or hereafter covered by such
licenses.
"Patents": with respect to any Grantor, all of such Grantor's right,
title and interest in and to all United States patents, patent
applications and patentable inventions and all reissues and extensions
thereof, including, without limitation, all patents and patent
applications identified in Schedule 5, and including, without limitation,
(a) all inventions and improvements described and claimed therein, and
patentable inventions, (b) the right to xxx or otherwise recover for any
and all past, present and future infringements and misappropriations
thereof, (c) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past or future infringements
thereof), and (d) all other rights corresponding thereto in the United
States and all reissues, divisions, continuations, continuations-in-part,
substitutes, renewals, and extensions thereof, all improvements thereon,
and all other rights of any kind whatsoever of such Grantor accruing
thereunder or pertaining thereto.
"Pledged Collateral": as defined in Section 3.
"Pledged Notes": with respect to any Pledgor, all Intercompany Notes
at any time issued to such Pledgor and all other promissory notes issued
to or held by such Pledgor (other than promissory notes issued in
connection with extensions of trade credit by any Pledgor in the ordinary
course of business).
"Pledged Securities": the collective reference to the Pledged Notes
and the Pledged Stock.
"Pledged Stock": with respect to any Pledgor, the shares of Capital
Stock listed on Schedule 2 as held by such Pledgor, together with any
other shares, stock certificates, options or rights of any nature
whatsoever in respect of the Capital Stock of any Issuer that may be
issued or granted to, or held by, such Pledgor while this Agreement is in
effect (provided that in no event shall there be pledged, nor shall any
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Pledgor be required to pledge, directly or indirectly, (x) more than 65%
of any series of the outstanding Capital Stock of any Foreign Subsidiary
pursuant to this Agreement) or (y) any Excluded Foreign Subsidiary Stock).
"Pledgor": Holdings (with respect to Pledged Stock of the Borrower),
the Borrower (with respect to Pledged Stock of EVI Audio and any other
Subsidiary of the Borrower and any other Pledged Securities held by the
Borrower) and any other Granting Party (with respect to Pledged Securities
held by such Granting Party).
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, Proceeds of Pledged Securities shall
include, without limitation, all dividends or other income from the
Pledged Securities, collections thereon or distributions or payments with
respect thereto.
"Revolving Credit Commitments": the collective reference to the
"Revolving Credit Commitments" as defined in the Senior Secured Credit
Agreement.
"Secured Parties": the collective reference to the Administrative
Agent, the Lenders (including, without limitation the Issuing Lender and
the Swing Line Lender) and any Affiliate of any Lender which has entered
into any Interest Rate Protection Agreement or Permitted Hedging
Arrangement with the Borrower or any of its Subsidiaries, and their
respective successors and assigns.
"Securities Act": the Securities Act of 1933, as amended from time
to time.
"Security Collateral": as defined in Section 3.
"Trade Secrets": with respect to any Grantor, all of such Grantor's
right, title and interest in and to all United States trade secrets,
including, without limitation, know-how, processes, formulae,
compositions, designs, and confidential business and technical
information, and all rights of any kind whatsoever accruing thereunder or
pertaining thereto, including, without limitation, (a) all income,
royalties, damages and payments now and hereafter due and/or payable with
respect thereto, including, without limitation, payments under all
licenses, non-disclosure agreements and memoranda of understanding entered
into in connection therewith, and damages and payments for past or future
misappropriations thereof, and (b) the right to xxx or otherwise recover
for past, present or future misappropriations thereof.
"Trademark Licenses": with respect to any Grantor, all United States
written license agreements of such Grantor with any Person who is not an
Affiliate or a Subsidiary in connection with any of the Trademarks of such
Grantor or such other Person's names or trademarks, whether such Grantor
is a licensor or a licensee under any such agreement, including, without
limitation, the license agreements listed on
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Schedule 5, subject, in each case, to the terms of such license
agreements, and the right to prepare for sale, sell and advertise for
sale, all Inventory now or hereafter covered by such licenses.
"Trademarks": with respect to any Grantor, all of such Grantor's
right, title and interest in and to all United States trademarks, service
marks, trade names, trade dress or other indicia of trade origin or
business identifiers, trademark and service xxxx registrations, and
applications for trademark or service xxxx registrations (except for
"intent to use" applications for trademark or service xxxx registrations
filed pursuant to Section 1(b) of the Xxxxxx Act, 15 U.S.C. Section 1051,
unless and until an Amendment to Allege Use or a Statement of Use under
Sections 1(c) and 1(d) of said Act has been filed), and any renewals
thereof, including, without limitation, each registration and application
identified in Schedule 5, and including, without limitation, (a) the right
to xxx or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (b) all income, royalties,
damages and other payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments
for past or future infringements thereof), and (c) all other rights
corresponding thereto in the United States and all other rights of any
kind whatsoever of such Grantor accruing thereunder or pertaining thereto,
together in each case with the goodwill of the business connected with the
use of, and symbolized by, each such trademark, service xxxx, trade name,
trade dress or other indicia of trade origin or business identifiers.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title law
of any state and all tires and other appurtenances to any of the
foregoing.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, Schedule and Annex references are to this Agreement
unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral,
Pledged Collateral or Security Collateral, or any part thereof, when used in
relation to a Granting Party shall refer to such Granting Party's Collateral,
Pledged Collateral or Security Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
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2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Secured Parties and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due and payable (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable law, including applicable federal and state
laws relating to the insolvency of debtors.
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any other
Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until the earlier to occur of (i) the first date on which all
the Loans, any Reimbursement Obligations, all other Borrower Obligations then
due and owing, and the obligations of each Guarantor under the guarantee
contained in this Section 2 then due and owing shall have been satisfied by
payment in full, no Letter of Credit shall be outstanding and the Commitments
shall be terminated, notwithstanding that from time to time during the term of
the Senior Secured Credit Agreement the Borrower may be free from any Borrower
Obligations or (ii) as to any Guarantor, the sale or other disposition of all of
the Capital Stock of such Guarantor permitted under the Senior Secured Credit
Agreement.
(e) No payment made by the Borrower, any of the Guarantors, any
other guarantor or any other Person or received or collected by the
Administrative Agent or any other Secured Party from the Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment (other than
any payment made by such Guarantor in respect of the Borrower Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the earlier to occur of (i) the
first date on which the Loans, any Reimbursement Obligations, and all other
Borrower Obligations then due and owing, are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated or (ii) the sale or
other disposition of all of the Capital Stock of such Guarantor permitted under
the Senior Secured Credit Agreement.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder,
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such Guarantor shall be entitled to seek and receive contribution from and
against any other Guarantor hereunder which has not paid its proportionate share
of such payment. Each Guarantor's right of contribution shall be subject to the
terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in
no respect limit the obligations and liabilities of any Guarantor to the
Administrative Agent and the other Secured Parties, and each Guarantor shall
remain liable to the Administrative Agent and the Lenders for the full amount
guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any other Secured Party, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any other Secured Party against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any other Secured Party for the payment of the Borrower Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Administrative
Agent and the other Secured Parties by the Borrower on account of the Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. To
the maximum extent permitted by law, each Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand
for payment of any of the Borrower Obligations made by the Administrative Agent
or any other Secured Party may be rescinded by the Administrative Agent or such
other Secured Party and any of the Borrower Obligations continued, and the
Borrower Obligations, or the liability of any other Person upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any other Secured Party, and the Senior
Secured Credit Agreement and the other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent (or
the Required Lenders, as the case may be) may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Administrative Agent or any other Secured Party for the payment of the
Borrower Obligations may be sold,
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exchanged, waived, surrendered or released. Neither the Administrative Agent nor
any other Secured Party shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Borrower Obligations
or for the guarantee contained in this Section 2 or any property subject
thereto, except to the extent required by applicable law.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives, to
the maximum extent permitted by applicable law, any and all notice of the
creation, renewal, extension or accrual of any of the Borrower Obligations and
notice of or proof of reliance by the Administrative Agent or any other Secured
Party upon the guarantee contained in this Section 2 or acceptance of the
guarantee contained in this Section 2; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Borrower and any of
the Guarantors, on the one hand, and the Administrative Agent and the other
Secured Parties, on the other hand, likewise shall be conclusively presumed to
have been had or consummated in reliance upon the guarantee contained in this
Section 2. Each Guarantor waives, to the maximum extent permitted by applicable
law, diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Borrower or any of the other Guarantors with
respect to the Borrower Obligations. Each Guarantor understands and agrees, to
the extent permitted by law, that the guarantee contained in this Section 2
shall be construed as a continuing, absolute and unconditional guarantee of
payment. Each Guarantor hereby waives, to the maximum extent permitted by
applicable law, any and all defenses that it may have arising out of or in
connection with any and all of the following: (a) the validity or enforceability
of the Senior Secured Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any other Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower against the Administrative
Agent or any other Secured Party, (c) any change in the time, place, manner or
place of payment, amendment, or waiver or increase in the Obligations, (d) any
exchange, taking, or release of Collateral, (e) any change in the corporate
structure or existence of the Borrower, (f) any application of Collateral to
Obligations or (g) any other circumstance whatsoever (with or without notice to
or knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Borrower Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any other Secured Party may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights
and remedies as it may have against the Borrower, any other Guarantor or any
other Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any other Secured Party to make any such demand, to
pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right
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of offset, or any release of the Borrower, any other Guarantor or any other
Person or any such collateral security, guarantee or right of offset, shall not
relieve any Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any other Secured Party
against any Guarantor. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 3. GRANT OF SECURITY INTEREST
Each Granting Party (1) that is a Grantor hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a security
interest in all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations of such Grantor:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment (other than Vehicles);
(f) all General Intangibles;
(g) all Instruments;
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(h) all Intellectual Property;
(i) all Inventory;
(j) all books and records pertaining to any of the foregoing;
(k) the Collateral Proceeds Account; and
(l) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing;
and (2) that is a Pledgor hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in all of the
Pledged Securities now owned or at any time hereafter acquired by such Pledgor,
and any Proceeds thereof (the "Pledged Collateral"; the Collateral (if any) and
the Pledged Collateral (if any) of any Granting Party being collectively
referred to herein as such Granting Party's "Security Collateral");
provided however, that (x) Collateral shall not include any Pledged Collateral,
or any property or assets specifically excluded from Pledged Collateral
(including any Excluded Foreign Subsidiary Stock, and any Capital Stock of any
Foreign Subsidiary in excess of 65% of any series of such stock); and (y) in the
case of any Instruments, Contracts, Chattel Paper, General Intangibles,
Copyright Licenses, Patent Licenses, Trademark Licenses or other contracts or
agreements with or issued by Persons (other than a Subsidiary of the Borrower)
that would otherwise be included in the Security Collateral, no security
interest in the right, title and interest of any Granting Party thereunder or
therein will be granted pursuant to this Section 2 (and such Instruments,
Contracts, Chattel Paper, General Intangibles, Copyright Licenses, Patent
Licenses, Trademark Licenses or other contracts or agreements shall not be
deemed to constitute a part of the Security Collateral) for so long as, and to
the extent that, the granting of a security interest in the right, title and
interest of such Grantor thereunder or therein pursuant to the terms hereof
would result in a breach, default or termination of such Instruments, Contracts,
Chattel Paper, General Intangibles, Copyright Licenses, Patent Licenses,
Trademark Licenses or other contracts or agreements and (z) in the case of the
Equipment that would otherwise be included in the foregoing Collateral, the
foregoing will not be deemed to grant a security interest therein under this
Agreement (and such Equipment shall not be deemed to constitute a part of the
Collateral) if such Equipment is subject to a Lien permitted by subsection
8.3(h) of the Senior Secured Credit Agreement.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Each Guarantor. To induce the
Administrative Agent and the Lenders to enter into the Senior Secured Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Guarantor hereby represents and warrants
to the Administrative Agent and each other Secured Party that the
representations and warranties set forth in Section 5 of the Senior Secured
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party or to the Transaction Documents to which such
Guarantor is a party, each of which representations and warranties is hereby
incorporated herein by reference, are true and correct in all material respects,
and the Administrative Agent and each other Secured Party shall be entitled to
rely on each of such representations and warranties as if fully set forth
herein; provided that each reference in each such representation and warranty to
the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed
to be a reference to such Guarantor's knowledge.
4.2 Representations and Warranties of Each Grantor. To induce the
Administrative Agent and the Lenders to enter into the Senior Secured Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each other Secured Party that:
4.2.1 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent, for the ratable benefit of the Secured
Parties, pursuant to this Agreement and the other Liens permitted to exist on
such Grantor's Collateral by the Senior Secured Credit Agreement (including
without limitation subsection 8.3 thereof), such Grantor owns each item of such
Grantor's Collateral free and clear of any and all Liens. Except as set forth on
Schedule 6, no financing statement or other similar public notice with respect
to all or any part of such Grantor's Collateral is on file or of record in any
public office, except such as have been filed in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, pursuant to this
Agreement or as are permitted by the Senior Secured Credit Agreement (including
without limitation subsection 8.3 thereof) or any other Loan Document or for
which termination statements will be delivered on the Closing Date.
4.2.2 Perfected First Priority Liens. (i) This Agreement is
effective to create, as collateral security for the Obligations of such Grantor,
valid and enforceable Liens on such Grantor's Collateral in favor of the
Administrative Agent, for the benefit of the Secured Parties, except as
enforceability may be affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditor's rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(ii) Except with respect to (A) Liens on Equipment constituting
Fixtures, (B) any rights reserved in favor of the United States government as
required under law, (C) Liens
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upon Patents, Patent Licenses, Trademarks and Trademark Licenses to the extent
that (I) such Liens cannot be perfected by the filing of financing statements
under the Uniform Commercial Code or by the filing and acceptance thereof in the
United States Patent and Trademark Office or (II) such Patents, Patent Licenses,
Trademarks and Trademark Licenses are not, individually or in the aggregate,
material to the business of the Borrower and its Subsidiaries taken as a whole,
(D) Liens on uncertificated securities, (E) Liens on Collateral the perfection
of which requires filings in or other actions under the laws of jurisdictions
outside of the United States of America, any State, territory or dependency
thereof or the District of Columbia (except to the extent that such filings or
other actions have been made or taken), (F) Liens on contracts or receivables on
which the United States of America or any department, agency, or instrumentality
thereof is the obligor, (G) Liens on Proceeds of receivables and Inventory,
until transferred to or deposited in the Collateral Proceeds Account (if any),
and (H) claims of creditors of Persons receiving goods included as Collateral
for "sale or return" within the meaning of Section 2-326 of the Uniform
Commercial Code of the applicable jurisdiction, upon filing of the financing
statements delivered to the Administrative Agent by such Grantor on the
Effective Date in the jurisdictions listed on Schedule 5.14 to the Senior
Secured Credit Agreement (which financing statements are in proper form for
filing in such jurisdictions) and the recording of the Mortgages (and the
recording of any Patent and Trademark Security Agreement, as set forth therein,
and the making of filings after the Effective Date in any other jurisdiction as
may be necessary under any Requirement of Law) and the delivery to, and
continuing possession by, the Administrative Agent of all Instruments, Chattel
Paper and Documents a security interest in which is perfected by possession, the
Liens created pursuant to this Agreement will constitute valid Liens on and, to
the extent provided herein, perfected security interests in such Grantor's
Collateral (but as to the Copyrights and Copyright Licenses and accounts arising
therefrom, only to the extent the Uniform Commercial Code of the relevant
jurisdiction, from time to time in effect, is applicable) in favor of the
Administrative Agent for the benefit of the Secured Parties, which Liens will be
prior to all other Liens of all other Persons, except for Liens permitted
pursuant to the Loan Documents (including, without limitation, those permitted
to exist pursuant to subsection 8.3 of the Senior Secured Credit Agreement), and
which Liens are enforceable as such as against all other Persons (except to the
extent that the recording of an assignment or other transfer of title to the
Administrative Agent in the United States Patent and Trademark Office may be
necessary for enforceability, and except, with respect to goods only, buyers in
the ordinary course of business to the extent provided in Section 9-307(1) of
the Code), except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) or by an implied
covenant of good faith and fair dealing.
4.2.3 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 3.
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4.2.4 Inventory and Equipment. On the date hereof, such Grantor's
Inventory and Equipment (other than mobile goods) are kept at the locations
listed on Schedule 4.
4.2.5 Farm Products. None of such Grantor's Collateral constitutes,
or is the Proceeds of, Farm Products.
4.2.6 Accounts. The amount represented by such Grantor to the
Administrative Agent or the other Secured Parties from time to time as owing by
each account debtor or by all account debtors in respect of such Grantor's
Accounts will at such time be the correct amount, in all material respects,
actually owing by such account debtor or debtors thereunder, except to the
extent that appropriate reserves therefor have been established on the books of
such Grantor in accordance with GAAP. The places where such Grantor keeps its
records concerning such Grantor's Accounts are listed on Schedule 7 or such
other location or locations of which such Grantor shall have provided prior
written notice to the Administrative Agent pursuant to Section 5.2.5 hereof.
Unless otherwise indicated in writing to the Administrative Agent, each Account
of such Grantor arises out of a bona fide sale and delivery of goods or
rendition of services by such Grantor. Such Grantor has not given any account
debtor any deduction in respect of the amount due under any such Account, except
as such Grantor may otherwise advise the Administrative Agent in writing.
4.2.7 Intellectual Property. Schedule 5 lists all material
Trademarks and material Patents (including, without limitation, Trademarks and
Patents registered in the United States Patent and Trademark Office) owned by
such Grantor in its own name as of the date hereof and all material Trademark
Licenses and all material Patent Licenses (including, without limitation,
material Trademark Licenses for registered Trademarks and material Patent
Licenses for registered Patents) owned by such Grantor in its own name as of the
date hereof.
4.3 Representations and Warranties of Each Pledgor. To induce the
Administrative Agent and the Lenders to enter into the Senior Secured Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Pledgor hereby represents and warrants
to the Administrative Agent and each other Secured party that:
4.3.1 The shares of Pledged Stock pledged by such Pledgor hereunder
constitute (i) in the case of each Domestic Subsidiary, all the issued and
outstanding shares of all classes of the Capital Stock of each such Domestic
Subsidiary owned by such Pledgor and (ii) in the case of each Foreign Subsidiary
such percentage (not more than 65%) as is specified on Schedule 2 of all the
issued and outstanding shares of all classes of the Capital Stock of each such
Foreign Subsidiary.
4.3.2 All the shares of the Pledged Stock pledged by such Pledgor
hereunder have been duly and validly issued and are fully paid and
nonassessable.
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4.3.3 Such Pledgor is the record and beneficial owner of, and has
good and valid title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement and Liens imposed by operation
of law.
4.3.4 Upon delivery to the Administrative Agent of the certificates
evidencing the Pledged Securities held by such Pledgor, the security interest
created by this Agreement in such Pledged Collateral, assuming the continuing
possession of such Pledged Securities by the Administrative Agent, will
constitute a valid, perfected first priority security interest in such Pledged
Collateral to the extent provided in the Code, enforceable in accordance with
its terms against all creditors of such Pledgor and any persons purporting to
purchase such Pledged Collateral from such Pledgor, except as enforceability may
be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
SECTION 5. COVENANTS
5.1 Covenants of Each Guarantor. Each Guarantor covenants and agrees
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the Loans, any Reimbursement Obligations, and
all other Obligations then due and owing, shall have been paid in full, no
Letter of Credit shall be outstanding and the Commitments shall have terminated,
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Covenants of Each Grantor. Each Grantor covenants and agrees
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the Loans, any Reimbursement Obligations, and
all other Obligations then due and owing, shall have been paid in full, no
Letter of Credit shall be outstanding and the Commitments shall have terminated:
5.2.1 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of such Grantor's Collateral shall be or
become evidenced by any Instrument or Chattel Paper, such Instrument or Chattel
Paper shall be promptly delivered to the Administrative Agent, duly indorsed in
a manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement.
5.2.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring such
Grantor's Inventory and Equipment against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Administrative
Agent and (ii) insuring such Grantor, the Administrative Agent and the other
Secured Parties against liability for personal injury and
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property damage relating to such Inventory and Equipment, such policies to be in
such form and amounts and having such coverage as may be reasonably satisfactory
to the Administrative Agent.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof, (ii) name the Administrative Agent as an additional
insured party or loss payee, (iii) include deductibles consistent with past
practice or otherwise reasonably satisfactory to the Administrative Agent and
(iv) be reasonably satisfactory in all other respects to the Administrative
Agent.
(c) Such Grantor (if the Borrower) shall deliver to the
Administrative Agent and the other Secured Parties reports of one or more
reputable insurance brokers of the individual insurance companies with respect
to such insurance as the Administrative Agent may from time to time reasonably
request.
5.2.3 Payment of Obligations. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon such Grantor's Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to such Grantor's Collateral,
except that no such tax, assessment, charge or levy need be paid or satisfied if
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with respect thereto
have been provided on the books of such Grantor and such proceedings would not
reasonably be expected to result in the sale, forfeiture or loss of any material
portion of the Collateral or any interest therein.
5.2.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement in such Grantor's Collateral as a perfected security interest
having at least the priority described in Section 4.2.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent from time
to time statements and schedules further identifying and describing such
Grantor's Collateral and such other reports in connection with such Grantor's
Collateral as the Administrative Agent may reasonably request in writing, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such Grantor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted by
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such Grantor, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby.
5.2.5 Changes in Locations, Name, etc. Such Grantor will not, except
upon not less than 30 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent, if applicable, of a written supplement to
Schedule 4 showing any additional location at which such Grantor's Inventory or
Equipment shall be kept:
(i) permit any of such Grantor's Inventory or Equipment to be kept
at a location other than the location(s) applicable to such Grantor listed
on Schedule 4 (other than Inventory or Equipment being conveyed, sold,
leased, assigned, transferred or otherwise disposed of as permitted by the
Senior Secured Credit Agreement);
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.2.3; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading;
provided that, prior to taking any such action, or promptly after receiving a
written request therefor from the Administrative Agent, such Grantor shall
deliver to the Administrative Agent all additional executed financing statements
and other documents reasonably requested by the Administrative Agent to maintain
the validity, perfection and priority of the security interests provided for
herein.
5.2.6 Notices. Such Grantor will advise the Administrative Agent
promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or Liens
permitted under the Senior Secured Credit Agreement) on any of such Grantor's
Collateral which would adversely affect the ability of the Administrative Agent
to exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of such
Grantor's Collateral or on the security interests created hereby.
5.2.7 Pledged Securities. In the case of each Grantor which is an
Issuer, such Issuer agrees that (i) it will be bound by the terms of this
Agreement relating to the Pledged Stock issued by it and will comply with such
terms insofar as such terms are applicable to it, (ii) it will notify the
Administrative Agent promptly in writing of the occurrence of any of the events
described in Section 5.3.1 with respect to the Pledged Stock issued by it and
(iii) the
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terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.3(c) or
6.7 with respect to the Pledged Stock issued by it.
5.2.8 Accounts. (a) Other than in the ordinary course of business,
such Grantor will not (i) grant any extension of the time of payment of any of
such Grantor's Accounts, (ii) compromise or settle any such Account for less
than the full amount thereof, (iii) release, wholly or partially, any Person
liable for the payment of any Account, (iv) allow any credit or discount
whatsoever on any such Account or (v) amend, supplement or modify any Account in
any manner that could adversely affect the value thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 10% of the aggregate
amount of the then outstanding Accounts.
5.2.9 Maintenance of Records. Such Grantor will keep and maintain at
its own cost and expense reasonably satisfactory and complete records of its
Collateral, including, without limitation, a record of all payments received and
all credits granted with respect to such Collateral, and shall xxxx such records
to evidence this Agreement and the Liens and the security interests created
hereby. For the Administrative Agent's and the other Secured Parties' further
security, the Administrative Agent, for the benefit of the Secured Parties,
shall have a security interest in all of such Grantor's books and records
pertaining to such Grantor's Collateral.
5.2.10 Acquisition of Intellectual Property. Within 45 days after
the end of each calendar quarter, such Grantor will notify the Administrative
Agent of any acquisition by such Grantor of (i) any material registration of
Copyright, Patent or Trademark or (ii) any exclusive rights under a material
Copyright License, Patent License or Trademark License, and shall take such
actions as may be reasonably requested by the Administrative Agent (but only to
the extent such actions are within such Grantor's control) to perfect the
security interest granted to the Administrative Agent and the other Secured
Parties therein (including, without limitation, (x) the execution and delivery
of a Patent and Trademark Security Agreement (or amendments to any such
agreement previously executed or delivered by such Grantor) or other comparable
agreements with respect to Copyrights or Copyright Licenses and (y) the making
of appropriate filings (I) of financing statements under the Uniform Commercial
Code of any applicable jurisdiction and/or (II) in the United States Patent and
Trademark Office, or with respect to Copyrights and Copyright Licenses, other
applicable office).
5.2.11 Protection of Trade Secrets. Such Grantor shall take all
steps which it deems commercially reasonable to preserve and protect the secrecy
of all material Trade Secrets of such Grantor.
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5.3 Covenants of Each Pledgor. Each Pledgor covenants and agrees
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the Loans, any Reimbursement Obligations, and
all other Obligations then due and owing shall have been paid in full, no Letter
of Credit shall be outstanding and the Commitments shall have terminated:
5.3.1 If such Pledgor shall become entitled to receive or shall
receive any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Pledgor shall accept the same as the agent of the Administrative
Agent and the other Secured Parties, hold the same in trust for the
Administrative Agent and deliver the same forthwith to the Administrative Agent
in the exact form received, duly indorsed by such Pledgor to the Administrative
Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by such Grantor and with, if the
Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations (provided that in no event shall there be pledged,
nor shall any Pledgor be required to pledge, more than 65% of any series of the
outstanding Capital Stock of any Foreign Subsidiary pursuant to this Agreement).
Any sums paid upon or in respect of the Pledged Securities upon the liquidation
or dissolution of any Issuer or Maker (except any liquidation or dissolution of
any Subsidiary of the Borrower in accordance with the Senior Secured Credit
Agreement) shall be paid over to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the Pledged Stock or
any property shall be distributed upon or with respect to the Pledged Stock
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall, unless otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged Securities
shall be received by such Pledgor, such Pledgor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Secured Parties, segregated from other funds of such
Pledgor, as additional collateral security for the Obligations.
5.3.2 Without the prior written consent of the Administrative Agent,
such Pledgor will not (except pursuant to a transaction permitted by the Senior
Secured Credit Agreement) (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any stock or other equity securities of any nature of
any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Pledged Securities or Proceeds thereof or
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any
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of the Pledged Securities or Proceeds thereof, or any interest therein, except
for the security interests created by this Agreement or Liens arising by
operation of law.
5.3.3 Such Pledgor shall maintain the security interest created by
this Agreement in such Pledgor's Pledged Collateral as a perfected security
interest having at least the priority described in Section 4.3.4 and shall
defend such security interest against the claims and demands of all Persons
whomsoever. At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Pledgor, such Pledgor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted by such Pledgor.
5.4 Covenants of Holdings. Holdings covenants and agrees with the
Administrative Agent and the other Secured Parties that, from and after the date
of this Agreement until the Loans, any Reimbursement Obligations, and all other
Obligations then due and owing have been paid in full, no Letter of Credit shall
be outstanding and the Commitments shall have terminated:
5.4.1 Holding shall not conduct or otherwise engage, in any business
or operations other than (i) transactions contemplated by the Loan Documents or
the provision of administrative, legal, accounting and management services to or
on behalf of the Borrower or any of its Subsidiaries, (ii) the ownership of the
Capital Stock of the Borrower (or any successor thereto), and the exercise of
rights and performance of obligations in connection therewith, (iii) the entry
into, and exercise of rights and performance of obligations in respect of, (A)
the Transaction Documents and Senior Subordinated Notes Documents to which
Holdings is a party, this Guarantee and Collateral Agreement and the other Loan
Documents to which Holdings is a party, and any other agreement to which
Holdings is a party on the date hereof, in each case as amended, supplemented,
waived or otherwise modified from time to time, and any refinancings,
refundings, renewals or extensions thereof, (B) contracts and agreements with
officers, directors and employees of the Holdings or a Subsidiary thereof
relating to their employment or directorships, (C) insurance policies and
related contracts and agreements, and (D) equity subscription agreements,
registration rights agreements, voting and other stockholder agreements,
engagement letters, underwriting agreements and other agreements in respect of
its equity securities or any offering, issuance or sale thereof, (iv) the
offering, issuance and sale of its equity securities, (v) the filing of
registration statements, and compliance with applicable reporting and other
obligations, under federal, state or other securities laws, (vi) the listing of
its equity securities and compliance with applicable reporting and other
obligations in connection therewith, (vii) the retention of transfer agents,
private placement agents, underwriters, counsel, accountants and other advisors
and consultants, (viii) the performance of obligations under and compliance with
its certificate of incorporation and by-laws, or any applicable law, ordinance,
regulation, rule, order, judgment, decree or permit, including, without
limitation, as a result of or in connection with the activities of the Borrower
and its Subsidiaries, (ix) the incurrence and payment of its operating and
business expenses
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and any taxes for which it may be liable, and (x) other activities incidental or
related to the foregoing.
5.4.2 Holdings shall not own, lease, manage or otherwise operate any
properties or assets (other than in connection with the activities described in
Section 5.4.1 above), or incur, create, assume or suffer to exist any
Indebtedness or Guarantee Obligations of Holdings (other than such as may be
incurred, created or assumed or exist in connection with the activities
described in Section 5.4.1 above.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Accounts. (a) At any time and from
time to time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and the relevant Grantor shall furnish all such
assistance and information as the Administrative Agent may require in connection
with such test verifications. At any time and from time to time after the
occurrence and during the continuance of an Event of Default, upon the
Administrative Agent's reasonable request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
reasonably satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Accounts and the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
any Proceeds constituting collections of such Accounts, when collected by such
Grantor (excluding any such collections through the Lockbox System), (i) shall
be forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in the Collateral Proceeds Account established
by such Grantor maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 6.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Administrative
Agent and the other Secured Parties, segregated from other funds of such
Grantor. Each such deposit of Proceeds of Accounts shall be accompanied by a
report identifying in reasonable detail the nature and source of the payments
included in the deposit. All Proceeds constituting collections of Accounts while
held by the Collateral Account Bank (or by any Guarantor in trust for the
benefit of the Administrative Agent and the other Secured Parties) shall
continue to be collateral security for all of the Obligations and shall not
constitute payment thereof until applied as hereinafter provided. At any time
when an Event of Default has occurred and is continuing, at the Administrative
Agent's election, the Administrative Agent may apply all or any part of the
funds on deposit in the Collateral Proceeds Account established by the relevant
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Grantor to the payment of the Obligations of such Grantor then due and owing,
such application to be made as set forth in Section 6.5 hereof. So long as no
Event of Default has occurred and is continuing, the funds on deposit in the
Collateral Proceeds Account shall be remitted as provided in Section 6.9 hereof.
At any time when an Event of Default has occurred and is continuing, at the
Administrative Agent's request, each Grantor shall deliver to the Administrative
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to such Grantor's Accounts,
including, without limitation, all statements relating to such Grantor's
Accounts.
(c) At any time and from time to time after the occurrence and
during the continuance of an Event of Default, at the Administrative Agent's
request, each Grantor shall deliver to the Administrative Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to such Grantor's Accounts, including, without limitation, all
original orders, invoices and shipping receipts.
(d) Lockbox System; Collateral Proceeds Account. (i) Solely to the
extent required under subsection 8.18(a) of the Senior Secured Credit Agreement,
on or prior to the date required pursuant to such subsection 8.18(a), each
Grantor shall (subject to subsection 8.18(a) of the Senior Secured Credit
Agreement) establish or cause to be established in the name of the
Administrative Agent, and subject to the control of the Administrative Agent
pursuant to such Grantor's Lockbox Agreements, for the benefit of the
Administrative Agent and the other Secured Parties, such Grantor's Lockbox
System into which the Proceeds of all such Grantor's Accounts (except as
permitted under and in accordance with subsection 8.18(a) of the Senior Secured
Credit Agreement) shall be deposited and forwarded to the Collateral Account
Bank in accordance with and to the extent and when required under such Lockbox
Agreements. On and after the date, if any, on which any Grantor is required to
establish any Lockbox System for so long as such Grantor is required to maintain
such system (subject to subsection 8.18(a) of the Senior Secured Credit
Agreement), (x) such Grantor shall ensure that all account debtors in respect of
such Grantor's Accounts payable in Dollars shall have been given instructions
reasonably satisfactory to the Administrative Agent directing such account
debtors to make all payments on such Accounts by means of deposits into such
Grantor's Lockbox System, (y) without the prior consent of the Administrative
Agent (which consent shall not be unreasonably withheld), such Grantor shall
not, in a manner materially adverse to the Secured Parties, change the form of
any such instructions given to account debtors, and (z) unless and until the
Administrative Agent shall have advised such Grantor to the contrary, such
Grantor shall, and the Administrative Agent hereby authorizes such Grantor to,
enforce and collect all amounts owing on such Grantor's Accounts, for the
benefit and on behalf of the Administrative Agent and the other Secured Parties
in accordance with and subject to the provisions of such Grantor's Lockbox
Agreements; provided, however, that such privilege shall automatically be
suspended upon the occurrence and during the continuance of an Event of Default
specified in Section 9(f) of the Senior Secured Credit Agreement with respect to
such Grantor and may at the option of the Administrative Agent be terminated
upon the occurrence and during the continuance of any other Event of Default
with respect to such Grantor or any other Grantor.
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(ii) All Proceeds of such Grantor's Accounts which have been received on
any Business Day through such Grantor's Lockbox System will be transferred into
such Grantor's Collateral Proceeds Account on such Business Day to the extent
required by the applicable Lockbox Agreement. All of such Grantor's Proceeds
received on any Business Day by the Collateral Account Bank pursuant to
paragraph (b) above will be transferred into such Grantor's Collateral Proceeds
Account on such Business Day. Such Collateral Proceeds Account is, and shall
remain, under the sole dominion and control of the Administrative Agent. Each
Grantor acknowledges and agrees that (A) such Grantor has no right of withdrawal
from its Collateral Proceeds Account, (B) the funds on deposit in such Grantor's
Collateral Proceeds Account shall be collateral security for all of such
Grantor's Obligations and (C) upon the occurrence and during the continuance of
an Event of Default, at the Administrative Agent's election, the funds on
deposit in such Grantor's Collateral Proceeds Account may be applied by the
Administrative Agent to the payment of such Grantor's Obligations then due and
owing, such application to be made in the order of priority set forth in Section
6.5 hereof.
(e) General Fund Account. So long as no Event of Default has
occurred and is continuing, and whether or not any Lockbox System shall have
been established or maintained, the Administrative Agent shall instruct the
Collateral Account Bank to promptly remit any funds on deposit in each Grantor's
Collateral Proceeds Account to such Grantor's General Fund Account. In the event
that an Event of Default has occurred and is continuing, the Administrative
Agent and the Grantors agree that the Administrative Agent, at its option, may
require that each Collateral Proceeds Account be established at The Chase
Manhattan Bank. Each Grantor shall have the right, at any time and from time to
time, to withdraw such of its own funds from its own General Fund Account, and
to maintain such balances in its General Fund Account, as it shall deem to be
necessary or desirable.
(f) Restructuring of Deposit Accounts. If (a) any Collateral
Proceeds Account is maintained at a Collateral Account Bank located in a state
within the United States in which Article 9 of the Uniform Commercial Code in
effect in such state has been expressly made applicable to (and only for so long
as it is applicable to) demand deposit accounts and all filings have been made
in such state which are necessary to perfect the Secured Parties' security
interest in such Collateral Proceeds Account or (b) after the Effective Date the
relevant Grantor demonstrates to the Administrative Agent, and the
Administrative Agent in its sole discretion agrees, that the costs associated
with maintaining both a Collateral Proceeds Account and a General Fund Account
outweigh any benefits to the Secured Parties in terms of any additional
protection to their rights in such Grantor's Collateral that could not be
achieved with the use of a single account, then upon the request of such
Grantor, the Administrative Agent may amend this Agreement to delete the
requirement that a separate General Fund Account be maintained and provide that
such Grantor be entitled to withdraw funds on deposit in such Collateral
Proceeds Account at any time so long as no Event of Default has occurred and is
continuing.
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6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
and from time to time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Accounts and parties to the
Contracts (in each case, to the extent constituting Collateral) to verify with
them to the Administrative Agent's satisfaction the existence, amount and terms
of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on such Grantor's Accounts and parties to such Grantor's
Contracts (in each case, to the extent constituting Collateral) that such
Accounts and such Contracts have been assigned to the Administrative Agent, for
the ratable benefit of the Secured Parties, and that payments in respect thereof
shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of such Grantor's Accounts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise thereto)
by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any other Secured Party of any payment relating thereto,
nor shall the Administrative Agent or any other Secured Party be obligated in
any manner to perform any of the obligations of any Grantor under or pursuant to
any Account (or any agreement giving rise thereto) to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Pledgor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Pledgor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, to the extent permitted in the
Senior Secured Credit Agreement, and to exercise all voting and corporate rights
with respect to the Pledged Stock; provided, however, that no vote shall be cast
or corporate right exercised or such other action taken (other than in
connection with a transaction expressly permitted by the Senior Secured Credit
Agreement) which, in the Administrative Agent's reasonable judgment, would
materially impair the Pledged Collateral or the related rights or remedies of
the Secured Parties or which would be inconsistent with or result in any
violation of any provision of the Senior Secured Credit Agreement, this
Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Pledgor or Pledgors,
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(i) the Administrative Agent shall have the right to receive any and all cash
dividends, payments or other Proceeds paid in respect of the Pledged Stock and
make application thereof to the Obligations in such order as the Administrative
Agent may determine, and (ii) any or all of the Pledged Stock shall be
registered in the name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Stock at any meeting of
shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all
rights of conversion, exchange, subscription and any other rights, privileges or
options pertaining to such Pledged Stock as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Stock upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any
Issuer, or upon the exercise by the relevant Pledgor or the Administrative Agent
of any right, privilege or option pertaining to such Pledged Stock, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Stock with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Administrative Agent may
reasonably determine), all without liability (other than for its gross
negligence or willful misconduct) except to account for property actually
received by it, but the Administrative Agent shall have no duty to any Pledgor
to exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing, provided that the Administrative
Agent shall not exercise any voting or other consensual rights pertaining to the
Pledged Stock in any way that would constitute an exercise of the remedies
described in Section 7 other than in accordance with Section 7.
(c) Each Pledgor hereby authorizes and instructs each Issuer or
Maker of any Pledged Securities pledged by such Pledgor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Pledgor, and each Pledgor agrees that each Issuer or
Maker shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In addition
to the rights of the Administrative Agent and the other Secured Parties
specified in Section 6.1 with respect to payments of Accounts, if an Event of
Default shall occur and be continuing, and the Administrative Agent shall have
instructed any Grantor to do so, all Proceeds received by such Grantor
consisting of cash, checks and other Cash Equivalent items shall be held by such
Grantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Administrative Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Administrative
Agent, if required). All Proceeds received by the Administrative Agent hereunder
shall be held by the Administrative Agent in the relevant Collateral Proceeds
Account maintained under its sole dominion and control. All Proceeds while held
by the Administrative Agent in such Collateral Proceeds Account (or by such
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Grantor in trust for the Administrative Agent and the other Secured Parties)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section 6.5.
6.5 Application of Proceeds. It is agreed that if an Event of
Default shall occur and be continuing, any and all Proceeds of the relevant
Granting Party's Security Collateral received by the Administrative Agent
(whether from the relevant Granting Party or otherwise) shall be held by the
Administrative Agent for the benefit of the Secured Parties as collateral
security for the Obligations of the relevant Granting Party (whether matured or
unmatured), and/or then or at any time thereafter may, in the sole discretion of
the Administrative Agent, be applied by the Administrative Agent against the
Obligations of the relevant Granting Party then due and owing in the following
order of priority:
FIRST, to the payment of all reasonable costs and expenses incurred
by the Administrative Agent in connection with this Agreement, the Senior
Secured Credit Agreement, any other Loan Document or any of the
Obligations of the relevant Granting Party, including, without limitation,
all court costs and the reasonable fees and expenses of its agents and
legal counsel, and any other reasonable costs or expenses incurred in
connection with the exercise by the Administrative Agent of any right or
remedy under this Agreement, the Senior Secured Credit Agreement, or any
other Loan Document;
SECOND, to the ratable satisfaction of all other Obligations of the
relevant Granting Party; and
THIRD, to the relevant Granting Party or its successors or assigns,
or to whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur and
be continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code or any other applicable law. Without limiting the generality of the
foregoing, to the extent permitted by applicable law, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Granting Party or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Security Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Security Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any other
Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
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future delivery without assumption of any credit risk. The Administrative Agent
or any other Secured Party shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Security Collateral so sold, free of
any right or equity of redemption in any Granting Party, which right or equity
is hereby waived or released. Each Granting Party further agrees, at the
Administrative Agent's request, to assemble the Security Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Granting Party's premises or elsewhere.
The Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Security Collateral or in any way relating to the
Security Collateral or the rights of the Administrative Agent and the other
Secured Parties hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the Obligations of
the relevant Granting Party, in the order of priority specified in Section 6.5
above, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to any Granting Party. To
the extent permitted by applicable law, each Granting Party waives all claims,
damages and demands it may acquire against the Administrative Agent or any other
Secured Party arising out of the exercise by them of any rights hereunder,
except to the extent arising as a result of the gross negligence or willful
misconduct of the Administrative Agent or such other Secured Party. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.
6.7 Registration Rights. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the reasonable opinion of the Administrative Agent it
is necessary or reasonably advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities Act, the
relevant Pledgor will use its reasonable best efforts to cause the Issuer
thereof to (i) execute and deliver, and use its best efforts to cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register such Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
such Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the reasonable
opinion of the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. Such
Pledgor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall reasonably designate and to make available to its
security holders,
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as soon as practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) Such Pledgor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all such Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Such
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Such Pledgor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of such Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Such Pledgor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Administrative Agent and
the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 6.7 shall be specifically enforceable
against such Pledgor, and to the extent permitted by applicable law, such
Pledgor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event of
Default has occurred under the Senior Secured Credit Agreement.
6.8 Waiver; Deficiency. Each Granting Party (other than the
Borrower) waives and agrees not to assert any rights or privileges which it may
acquire under Section 9-112 of the Code, to the extent permitted by applicable
law. Each Granting Party shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Security Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any other Secured Party to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Granting Party hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Granting Party and in the
name of such Granting Party or in its own name, for the purpose of carrying out
the terms
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of this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be reasonably necessary or desirable to
accomplish the purposes of this Agreement to the extent permitted by applicable
law. Without limiting the generality of the foregoing, at any time when an Event
of Default has occurred and is continuing (in each case to the extent permitted
by applicable law), (x) each Pledgor hereby gives the Administrative Agent the
power and right, on behalf of such Pledgor, without notice or assent by such
Pledgor, to execute, in connection with any sale provided for in Section 6.6 or
6.7, any indorsements, assessments or other instruments of conveyance or
transfer with respect to such Pledgor's Pledged Collateral, and (y) each Grantor
hereby gives the Administrative Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account of such Grantor or with respect to any other Collateral of such
Grantor and file any claim or take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys
due under any Account of such Grantor or with respect to any other
Collateral of such Grantor whenever payable;
(ii) in the case of any Copyright, Patent or Trademark constituting
Collateral of such Grantor, execute and deliver any and all agreements,
instruments, documents and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent's and the Lenders'
security interest in such Copyright, Patent or Trademark and the goodwill
and general intangibles of such Grantor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral of such Grantor, effect any repairs or
any insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof; and
(iv) (i) direct any party liable for any payment under any of the
Collateral of such Grantor to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (ii) ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or arising out of
any Collateral of such Grantor; (iii) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral of such Grantor; (iv)
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral of
such Grantor or any portion thereof and to enforce any other right in
respect of any Collateral of
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such Grantor; (v) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral of such Grantor; (vi) settle,
compromise or adjust any such suit, action or proceeding and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (vii) subject to any existing
reserved rights or licenses, assign any Copyright, Patent or Trademark
constituting Collateral of such Grantor (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains), for
such term or terms, on such conditions, and in such manner, as the
Administrative Agent shall in its sole discretion determine; and (viii)
generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with any of the Collateral of such Grantor as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent's option and
such Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect, preserve
or realize upon the Collateral of such Grantor and the Administrative
Agent's and the other Secured Parties' security interests therein and to
effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Granting Party fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The reasonable expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due ABR Loans which are Term Loans under
the Senior Secured Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Granting Party,
shall be payable by such Granting Party to the Administrative Agent on demand.
(d) Each Granting Party hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable as to the relevant Granting Party until this
Agreement is terminated as to such Granting Party, and the security interests in
the Security Collateral of such Granting Party created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Security Collateral in its possession, under Section 9-207 of the Code or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any other Secured Party nor any of their respective
officers,
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directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Security Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Security
Collateral upon the request of any Granting Party or any other Person or to take
any other action whatsoever with regard to the Security Collateral or any part
thereof. The powers conferred on the Administrative Agent and the other Secured
Parties hereunder are solely to protect the Administrative Agent's and the other
Secured Parties' interests in the Security Collateral and shall not impose any
duty upon the Administrative Agent or any other Secured Party to exercise any
such powers. The Administrative Agent and the other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Granting Party for any act or
failure to act hereunder, except for their own gross negligence or willful
misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402 of
the Code and any other applicable law, each Granting Party authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to such Granting Party's
Security Collateral without the signature of such Granting Party in such form
and in such offices as the Administrative Agent reasonably determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Granting Party
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement or any amendment, supplement or other
modification of this Agreement shall, as between the Administrative Agent and
the Secured Parties, be governed by the Senior Secured Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Granting Parties the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and no Granting Party shall be under any obligation, or entitlement, to
make any inquiry respecting such authority.
7.5 Right Of Inspection. Upon reasonable written advance notice to
any Grantor and at reasonable intervals, or at any time and from time to time
after the occurrence and during the continuation of an Event of Default, the
Administrative Agent shall have reasonable access during normal business hours
to all the books, correspondence and records of such Granting Party, and the
Administrative Agent and its representatives may examine the same, and to the
extent reasonable take extracts therefrom and make photocopies thereof, and such
Granting Party agrees to render to the Administrative Agent, at such Granting
Party's reasonable cost and expense, such clerical and other assistance as may
be reasonably requested
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with regard thereto. The Administrative Agent and its representatives shall also
have the right, upon reasonable advance written notice to such Granting Party,
to enter during normal business hours into and upon any premises owned, leased
or operated by such Granting Party where any of such Granting Party's Inventory
or Equipment is located for the purpose of inspecting the same, observing its
use or otherwise protecting its interests therein.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by each affected Granting Party and the
Administrative Agent, provided that any provision of this Agreement imposing
obligations on any Granting Party may be waived by the Administrative Agent in a
written instrument executed by the Administrative Agent.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Granting Party hereunder shall be effected in the
manner provided for in subsection 11.2 of the Senior Secured Credit Agreement;
provided that any such notice, request or demand to or upon any Guarantor shall
be addressed to such Guarantor at its notice address set forth on Schedule 1,
unless and until such Guarantor shall change such address by notice to the
Administrative Agent given in accordance with subsection 11.2 of the Senior
Secured Credit Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any other Secured Party shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any other
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any other Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Administrative
Agent or such other Secured Party would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor agrees
to pay or reimburse each Secured Party and the Administrative Agent for all
their respective reasonable costs and expenses incurred in collecting against
such Guarantor under the guarantee contained in Section 2 or otherwise enforcing
or preserving any rights under this Agreement against such Guarantor and the
other Loan Documents to which such Guarantor is a
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party, including, without limitation, the reasonable fees and disbursements of
one firm of counsel to the Secured Parties and the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Secured Parties harmless from, (x) any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other similar taxes which may be payable or determined to be payable
with respect to any of the Security Collateral or in connection with any of the
transactions contemplated by this Agreement and (y) any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement (collectively, the "indemnified liabilities"), in each case to the
extent the Borrower would be required to do so pursuant to Section 11.5 of the
Senior Secured Credit Agreement, and in any event excluding any taxes or other
indemnified liabilities arising from gross negligence or willful misconduct of
the Administrative Agent or any Secured Party.
(c) The agreements in this Section 8.4 shall survive repayment of
the Obligations and all other amounts payable under the Senior Secured Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Granting Parties, the Administrative Agent and
the Secured Parties and their respective successors and assigns; provided that
no Granting Party may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Guarantor hereby irrevocably authorizes the
Administrative Agent and each other Secured Party at any time and from time to
time without notice to such Guarantor, any other Guarantor or the Borrower, any
such notice being expressly waived by each Guarantor and by the Borrower, to the
extent permitted by applicable law, upon the occurrence and during the
continuance of an Event of Default under Section 9(a) of the Senior Secured
Credit Agreement and any amount remaining unpaid after it becomes due and
payable by such Guarantor hereunder, to set-off and appropriate and apply
against any such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such other Secured Party to or for the
credit or the account of such Guarantor, or any part thereof in such amounts as
the Administrative Agent or such other Secured Party may elect. The
Administrative Agent and each other Secured Party shall notify such Guarantor
promptly of any such set-off and the application made by the Administrative
Agent or such other Secured Party of the proceeds thereof; provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Administrative Agent and each other Secured Party
under this Section 8.6 are in addition to
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other rights and remedies (including, without limitation, other rights of
set-off) which the Administrative Agent or such other Secured Party may have.
8.7 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Granting Parties, the Administrative Agent
and the other Secured Parties with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Granting Parties, the Administrative Agent or any other Secured Party relative
to subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each party hereto hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgement
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from
any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
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37
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
party at its address referred to in Section 8.2 or at such other address
of which the Administrative Agent (in the case of any other party hereto)
or the Borrower (in the case of the Administrative Agent) shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section any punitive damages.
8.13 Acknowledgements. Each Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Administrative Agent nor any other Secured Party has
any fiduciary relationship with or duty to any Guarantor arising out of or
in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Guarantors, on the one hand, and the
Administrative Agent and the Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Secured Parties or among the Guarantors and the Secured
Parties.
8.14 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 Additional Granting Parties. Each new Domestic Subsidiary of
the Borrower that is required to become a party to this Agreement pursuant to
Section 8.15 of the Senior Secured Credit Agreement shall become a Granting
Party for all purposes of this Agreement upon execution and delivery by such
Subsidiary of an Assumption Agreement in the form of Annex 1 hereto.
8.16 Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations then due and owing shall have been paid in
full, the Commitments
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38
have been terminated and no Letters of Credit shall be outstanding, all Security
Collateral shall be released from the Liens created hereby, and this Agreement
and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Granting Party hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Security Collateral shall revert to the
Granting Parties. At the request and sole expense of any Granting Party
following any such termination, the Administrative Agent shall deliver to such
Granting Party any Security Collateral held by the Administrative Agent
hereunder, and execute and deliver to such Granting Party such documents
(including without limitation UCC termination statements) as such Granting Party
shall reasonably request to evidence such termination.
(b) In connection with the sale or other disposition of all of the
Capital Stock of any Guarantor or the sale or other disposition of Security
Collateral permitted under the Senior Secured Credit Agreement and the release
of such Guarantor from its Guarantee or the release of the Security Collateral
subject to such sale or other disposition, the Borrower shall deliver to the
Administrative Agent, a written request for release identifying such Guarantor
or the relevant Security Collateral and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith,
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together with a certification by the Borrower stating that such transaction is
in compliance with the Senior Secured Credit Agreement and the other Loan
Documents. The Administrative Agent shall execute and deliver to the relevant
Granting Party (at the sole cost and expense of such Granting Party) all
releases or other documents (including without limitation UCC termination
statements) necessary or reasonably desirable for the release of the Liens
created hereby on such Security Collateral as such Granting Party may reasonably
request.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
EV INTERNATIONAL, INC.
By: ____________________________
Title
EVI AUDIO HOLDING, INC.
By: ____________________________
Title:
Acknowledged and Agreed to as
of the date hereof by:
THE CHASE MANHATTAN BANK, as
Administrative Agent
By: ________________________
Title:
212
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
EVI Audio Holding, Inc.
c/o EV International, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention:
Telephone:
Telecopy:
with Copies to:
Greenwich Street Capital Partners, Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
re: EVI Audio Holding, Inc.
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
213
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Stock Certificate
Issuer Class of Stock No. No. of Shares
-------------------- -------------- ----------------- -------------
214
Schedule 3
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
OR SOLE PLACE OF BUSINESS
Granting Party Location
-------------- --------
215
Schedule 4
LOCATION OF INVENTORY AND EQUIPMENT
Granting Party Locations
-------------- ---------
216
Schedule 5
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
217
Schedule 6
EXISTING PRIOR LIENS
218
Schedule 7
ACCOUNTS
219
3
Schedule 8
CONTRACTS
220
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of _________ __, 199_, made by
______________________________, a ______________ corporation (the "Additional
Granting Party"), in favor of THE CHASE MANHATTAN BANK, as administrative agent
(in such capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") from time to time parties to the Senior Secured
Credit Agreement referred to below and the other Secured Parties (as defined
below). All capitalized terms not defined herein shall have the meaning ascribed
to them in such the Guarantee and Collateral Agreement referred to below, or if
not defined therein, in Senior Secured Credit Agreement.
W I T N E S S E T H :
WHEREAS, EV International, Inc., a Delaware corporation (the
"Borrower"), the Lenders and the Administrative Agent are parties to a Credit
Agreement, dated as of February __, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Senior Secured Credit Agreement");
WHEREAS, in connection with the Senior Secured Credit Agreement, the
Borrower and certain of its Affiliates and Subsidiaries are, or are to become,
parties to the Guarantee and Collateral Agreement, dated as of February __, 1997
(as amended, supplemented or otherwise modified from time to time, the
"Guarantee and Collateral Agreement") in favor of the Administrative Agent, for
the ratable benefit of the Secured Parties (as defined in the Guarantee and
Collateral Agreement);
WHEREAS, the Additional Grantor is a member of an affiliated group
of companies that includes the Borrower and each other Granting Party to the
Guarantee and Collateral Agreement; the proceeds of the extensions of credit
under the Senior Secured Credit Agreement will be used in part to enable the
Borrower to make valuable transfers to one or more of the other Granting Parties
(including the Additional Grantor) in connection with the operation of their
respective businesses; and the Borrower and the other Granting Parties
(including the Additional Grantor) are engaged in related businesses, and each
such Granting Party (including the Additional Grantor) will derive substantial
direct and indirect benefit from the making of the extensions of credit under
the Senior Secured Credit Agreement;
WHEREAS, the Senior Secured Credit Agreement requires the Additional
Granting Party to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Granting Party has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
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2
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
this Assumption Agreement, the Additional Granting Party, as provided in Section
8.15 of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Granting Party thereunder with the same
force and effect as if originally named therein as a Guarantor [, Grantor and
Pledgor] [and Grantor] [and Pledgor] (1) and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Guarantor [, Grantor and Pledgor] [and Grantor] [and Pledgor] (2) thereunder.
The information set forth in Annex 1-A hereto is hereby added to the information
set forth in Schedules ____________ to the Guarantee and Collateral Agreement,
and such Schedules are hereby amended and modified to include such information.
The Additional Granting Party hereby represents and warrants that each of the
representations and warranties of such Additional Grantor, in its capacities as
a Guarantor [, Grantor and Pledgor] [and Grantor] [and Pledgor], (3) contained
in Section 4 of the Guarantee and Collateral Agreement is true and correct in
all material respects on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTING PARTY]
By:_________________________________________
Name:
Title:
--------
(1) Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
(2) Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
(3) Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
222
Annex 1-A to
Assumption Agreement
223
EXHIBIT C TO
CREDIT AGREEMENT
FORM OF PATENT AND TRADEMARK SECURITY AGREEMENT
PATENT AND TRADEMARK SECURITY AGREEMENT, dated as of
February __, 1997, made by [EV International, Inc., a Delaware corporation
formerly named Electro-Voice, Incorporated and successor by merger to Gulton
Acquisition Corp., Gulton Industries, Inc., LFE Corporation, Xxxx XX Audio, Inc.
and Xxxx XX Audio Magnetic, Inc., each a Delaware corporation] [name of Domestic
Subsidiary of the Borrower] (the "Grantor"), in favor of The Chase Manhattan
Bank, a New York banking corporation ("Chase"), as administrative agent (in such
capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") from time to time parties to the Credit Agreement,
dated as of February __, 1997 (as amended, waived, supplemented or otherwise
modified from time to time, the "Senior Secured Credit Agreement"), among [the
Grantor] [EV International, Inc., a Delaware corporation as the Borrower
thereunder] (as successor by merger to Gulton Acquisition Corp.) (in such
capacity, the "Borrower"), the Lenders and the Administrative Agent.
W I T N E S S E T H :
WHEREAS, pursuant to the Senior Secured Credit Agreement, the
Lenders have severally agreed to make extensions of credit to the Borrower upon
the terms and subject to the conditions set forth therein; and
[WHEREAS, the Grantor is party to the Guarantee and Collateral
Agreement, dated as of February __, 1997 (as amended, waived, supplemented or
otherwise modified from time to time, the "Guarantee and Collateral Agreement"),
in favor of the Administrative Agent, and the Borrower and one or more other
Granting Parties (as defined therein) are also parties thereto; and]1
[WHEREAS, the Grantor is a member of an affiliated group of
companies that includes the Borrower and each other Granting Party; the proceeds
of the extensions of credit under the Senior Secured Credit Agreement will be
used in part to enable the Borrower to make valuable transfers to one or more of
the other Granting Parties (including the Grantor) in connection with the
operation of their respective businesses; and the Borrower and the other
Granting Parties including the Grantor) are engaged in related businesses, and
each such
--------
1. Include in any future Patent and Trademark Agreement to which a Domestic
Subsidiary is to be a party.
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2
granting Party (including the Grantor) will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Senior
Secured Credit Agreement; and]2
WHEREAS, it is a condition to the obligation of the Lenders to make
their respective extensions of credit to the Borrower under the Senior Secured
Credit Agreement that the Grantor shall execute and deliver this Agreement to
the Administrative Agent for the ratable benefit of the Secured Parties (as
defined below);
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Senior Secured Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, the Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:
1. Defined Terms. (a) Unless otherwise defined herein, capitalized terms which
are defined in the Senior Secured Credit Agreement and used herein shall have
the meanings given to them in the Senior Secured Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Patent and Trademark Security Agreement, as the
same may be amended, supplemented, waived or otherwise modified from time
to time.
"Code": the Uniform Commercial Code as from time to time in effect
in the State of New York.
"Collateral": as defined in Section 2 of this Agreement.
"Default": a "Default" as defined in the Senior Secured Credit
Agreement.
"Event of Default": an "Event of Default" as defined in the Senior
Secured Credit Agreement.
"General Intangibles": as defined in Section 9-106 of the Code,
including, without limitation, all Patents and Trademarks now or hereafter
owned by the Grantor to the extent such Patents and Trademarks would be
included in General Intangibles under the Code.
"Loan Documents": the collective reference to the "Loan Documents"
as defined in the Senior Secured Credit Agreement.
--------
2. Include in any future Patent and Trademark Agreement to which a Domestic
Subsidiary is to be a party.
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3
"Loans": the collective reference to the "Loans" as defined in the
Senior Secured Credit Agreement.
"Obligations": the Obligations (as defined in the Guarantee and
Collateral Agreement) of the Grantor.
"Patent Licenses": all United States written license agreements of
the Grantor with any Person who is not an Affiliate or Subsidiary of the
Grantor in connection with any of the Patents or such other Person's
patents, whether the Grantor is a licensor or a licensee under any such
agreement, including, without limitation, the license agreements listed on
Schedule II hereto, subject, in each case, to the terms of such license
agreements, and the right to prepare for sale, sell and advertise for
sale, all Inventory (as defined in the Guarantee and Collateral Agreement)
now or hereafter covered by such licenses.
"Patents": all of the Grantor's right, title and interest in and to
all United States patents, patent applications and patentable inventions
and all reissues and extensions thereof, including, without limitation,
all patents and patent applications identified in Schedule II hereto, and
including, without limitation, (a) all inventions and improvements
described and claimed therein, and patentable inventions, (b) the right to
xxx or otherwise recover for any and all past, present and future
infringements and misappropriations thereof, (c) all income, royalties,
damages and other payments now and hereafter due and/or payable with
respect thereto (including, without limitation, payments under all
licenses entered into in connection therewith, and damages and payments
for past or future infringements thereof), and (d) all other rights
corresponding thereto in the United States and all reissues, divisions,
continuations, continuations-in-part, substitutes, renewals, and
extensions thereof, all improvements thereon, and all other rights of any
kind whatsoever of the Grantor accruing thereunder or pertaining thereto
(Patents and Patent Licenses being, collectively, the "Patent
Collateral").
"Proceeds": as defined in Section 9-306(1) of the Code.
"Revolving Credit Commitments": the collective reference to the
"Revolving Credit Commitments" as defined in the Senior Secured Credit
Agreement.
"Secured Parties": the collective reference to the Administrative
Agent, the Lenders (including, without limitation, the Issuing Lender and
the Swing Line Lender), any Affiliate of any Lender which has entered into
any Interest Rate Protection Agreement or Permitted Hedging Arrangement
with the Borrower or any of its Subsidiaries, and their respective
successors and assigns.
"Trademark Licenses": all United States written license agreements
of the Grantor with any Person who is not an Affiliate or Subsidiary of
the Grantor in
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4
connection with any of the Trademarks or such other Person's names or
trademarks, whether the Grantor is a licensor or a licensee under any such
agreement, including, without limitation, the license agreements listed on
Schedule I hereto, subject, in each case, to the terms of such license
agreements, and the right to prepare for sale, sell and advertise for
sale, all Inventory (as defined in the Guarantee and Collateral Agreement)
now or hereafter covered by such licenses.
"Trademarks": all of the Grantor's right, title and interest in and
to all United States trademarks, service marks, trade names, trade dress
or other indicia of trade origin or business identifiers, trademark and
service xxxx registrations, and applications for trademark or service xxxx
registrations (except for "intent to use" applications for trademark or
service xxxx registrations filed pursuant to Section 1(b) of the Xxxxxx
Act, 15 U.S.C. Section 1051, unless and until an Amendment to Allege Use
or a Statement of Use under Sections 1(c) and 1(d) of said Act has been
filed), and any renewals thereof, including, without limitation, each
registration and application identified in Schedule I hereto, and
including, without limitation, (a) the right to xxx or otherwise recover
for any and all past, present and future infringements and
misappropriations thereof, (b) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into
in connection therewith, and damages and payments for past or future
infringements thereof), and (c) all other rights corresponding thereto in
the United States and all other rights of any kind whatsoever of the
Grantor accruing thereunder or pertaining thereto, together in each case
with the goodwill of the business connected with the use of, and
symbolized by, each such trademark, service xxxx, trade name, trade dress
or other indicia of trade origin or business identifiers (Trademarks and
Trademark Licenses being, collectively, the "Trademark Collateral").
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to the Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
2. Grant of Security Interest. The Grantor hereby grants, subject to
existing licenses granted by such Grantor in the ordinary course of business
with respect to the Collateral (as hereinafter defined), to the Administrative
Agent for the ratable benefit of the Secured Parties a security interest in all
of the following property now owned or at any time
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hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations of such Grantor:
(i) all Patents;
(ii) all Patent Licenses;
(iii) all Trademarks;
(iv) all Trademark Licenses;
(v) all General Intangibles connected with the use of or symbolized
by the Trademarks and Patents; and
(vi) to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing;
provided, that the foregoing grant of a security interest with respect to
General Intangibles, Patent Licenses and Trademark Licenses shall not include a
security interest in, and the Collateral shall not include, any Patent License
or Trademark License with or issued by Persons other than a Subsidiary of the
Grantor that would otherwise be included in the Collateral to the extent that
the grant by such Grantor of such security interest is prohibited by the terms
and provisions of the written agreement or document or instrument creating or
evidencing such license or permit or Patent License or Trademark License, or
gives the other party thereto the right to terminate such Patent License or
Trademark License in the event of the grant of a security interest with respect
thereto. All references in this Agreement to any of the property described in
clauses (i) through (vi) of the preceding sentence, or to any Proceeds thereof,
shall be deemed to be references to such property or Proceeds to the extent such
property or Proceeds constitutes Collateral.
3. Representations and Warranties. The Grantor hereby represents and
warrants to the Administrative Agent on behalf of the Secured Parties that:
(a) Power and Authority. As of the date hereof, the Grantor has the
corporate power and authority, and the legal right, to make, deliver and
perform its obligations under, and to grant the security interest in the
Trademark Collateral and the Patent Collateral to the extent provided in,
and pursuant to, this Agreement and has taken all necessary corporate
action to authorize the execution, delivery and performance of, and grant
of the security interest in the Trademark Collateral and the Patent
Collateral to the extent provided in, and pursuant to, this Agreement.
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(b) Title; No Other Liens. As of the date hereof, except for the
Liens granted to the Administrative Agent, for the benefit of the Secured
Parties, pursuant to this Agreement and the other Liens permitted to exist
on the Collateral pursuant to the Loan Documents (including, without
limitation, any Liens permitted to exist on the Collateral pursuant to
subsection 8.3 of the Senior Secured Credit Agreement), the Grantor is
(or, in the case of after-acquired Collateral, will be) the sole, legal
and beneficial owner of the entire right, title and interest in and to the
material Trademarks set forth on Schedule I hereto and the material
Patents set forth in Schedule II hereto free and clear of any and all
Liens. As of the date hereof, except as set forth on Schedule III hereto,
no security agreement, financing statement or other public notice similar
in effect with respect to all or any part of the Collateral is on file or
of record in any public office (including, without limitation, the United
States Patent and Trademark Office), except such as may have been filed in
favor of the Administrative Agent, for the benefit of the Secured Parties,
pursuant to this Agreement or in respect of such Liens as may be permitted
pursuant to the Loan Documents (including, without limitation, any Liens
permitted to exist on the Collateral pursuant to subsection 8.3 of the
Senior Secured Credit Agreement).
(c) Perfected First Priority Liens. (i) As of the date hereof, this
Agreement is effective to create, as collateral security for the
Obligations, valid and enforceable Liens on the Collateral in favor of the
Administrative Agent, for the benefit of the Secured Parties, except as
enforceability may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
(ii) As of the date hereof, except with respect to Liens upon
Patents and Trademarks and Patent Licenses and Trademark Licenses, which
Liens, to the extent not otherwise perfected by the filing of financing
statements under the Code in accordance herewith, would in the case of
Patents and Trademarks listed in Schedules I and II hereto, or in the case
of Patent Licenses and Trademark Licenses listed in Schedules I and II
hereto may be perfected upon the filing, acceptance and recordation
thereof in the United States Patent and Trademark Office, upon filing of
the financing statements delivered to the Administrative Agent by the
Grantor on the Effective Date in the jurisdictions listed on Schedule 5.14
to the Senior Secured Credit Agreement (which financing statements are in
proper form for filing in such jurisdictions) (and the recording of this
Agreement in the United States Patent and Trademark Office, and the making
of filings after the Effective Date in any other jurisdiction in the
United States as may be necessary under any Requirement of Law) the Liens
created pursuant to this Agreement will constitute valid and perfected
Liens on the Collateral in the United States in favor of the
Administrative Agent for the benefit of the Secured Parties, which Liens
will be prior to all other Liens of all other Persons with respect to the
Collateral, except for Liens permitted pursuant to the Loan Documents
(including,
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without limitation, those permitted to exist pursuant to subsection 8.3 of
the Senior Secured Credit Agreement), and which Liens are enforceable as
such against all creditors of and purchasers (except to the extent that
the recording of an assignment or other transfer of title to the
Administrative Agent in the United States Patent and Trademark Office may
be necessary for such enforceability) from the Grantor, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law) or by an implied covenant of
good faith and fair dealing.
(d) Consents. No consent of any party (other than the Grantor) to
any material Patent License or material Trademark License constituting
Collateral is required, or purports to be required, to be obtained by or
on behalf of the Grantor in connection with the execution, delivery and
performance of this Agreement that has not been obtained. Each Patent
License and Trademark License constituting Collateral is in full force and
effect and constitutes a valid and legally enforceable obligation of the
Grantor and (to the knowledge of the Grantor) each other party thereto
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) or by an implied
covenant of good faith and fair dealing and except to the extent the
failure of any such Patent License or Trademark License constituting
Collateral to be in full force and effect or valid or legally enforceable
would not be reasonably expected, in the aggregate, to have a material
adverse effect on the value of the Collateral (as such term is defined in
the Senior Secured Credit Agreement). No consent or authorization of,
filing with or other act by or in respect of any Governmental Authority is
required in connection with the execution, delivery, performance, validity
or enforceability of any of the Patent Licenses or Trademark Licenses
constituting Collateral by any party thereto other than those which have
been duly obtained, made or performed and are in full force and effect and
those the failure of which to make or obtain would not be reasonably
expected, in the aggregate, to have a material adverse effect on the value
of the Collateral (as such term is defined in the Senior Secured Credit
Agreement). Neither such Grantor nor (to the knowledge of such Grantor)
any other party to any Patent License or Trademark License constituting
Collateral is in default in the performance or observance of any of the
terms thereof, except for such defaults as would not reasonably be
expected, in the aggregate, to have a material adverse effect on the value
of the Collateral (as such term is defined in the Senior Secured Credit
Agreement). Except for rights reserved in favor of the United States
government, as required under law, the right, title and interest of the
Grantor in, to and under each Patent License and Trademark License
constituting Collateral are not subject to any defense, offset,
counterclaim or claim which would be reasonably expected, either
individually or in the aggregate, to have a material adverse effect on the
value of the Collateral (as such term is defined in the Senior Secured
Credit Agreement).
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(e) Schedules I and II are Complete; All Filings Have Been Made. Set
forth in Schedules I and II is a complete and accurate list of all
material Trademarks and material Patents owned by the Grantor as of the
date hereof. As of the date hereof, the Grantor will have made all
necessary filings to protect and maintain its interest in the Trademarks
and Patents set forth in Schedules I and II, including, without
limitation, all necessary filings and payments of all maintenance fees, in
the United States Patent and Trademark Office to the extent such
Trademarks and Patents are material to such Grantor's business. Set forth
in Schedules I and II is a complete and accurate list of all of the
material Trademark Licenses and material Patent Licenses owned by the
Grantor as of the date hereof.
(f) The Trademarks and Trademark Licenses are Subsisting and Not
Adjudged Invalid. As of the date hereof, each trademark registration and
trademark application of the Grantor set forth in Schedule I is subsisting
as of the date hereof, and has not been adjudged invalid, unregisterable
or unenforceable, in whole or in part, and, to the best of such Grantor's
knowledge, is valid, registrable and enforceable. As of the date hereof,
each of the Trademark Licenses set forth in Schedule I is validly
subsisting and has not been adjudged invalid or unenforceable, in whole or
in part, and, to the best of such Grantor's knowledge, is valid and
enforceable. As of the date hereof, each Grantor has notified the
Administrative Agent in writing of all uses of any item of Trademark
Collateral material to such Grantor's business of which such Grantor is
aware which could reasonably be expected to lead to such item becoming
invalid or unenforceable, including unauthorized uses by third parties and
uses which were not supported by the goodwill of the business connected
with such Collateral.
(g) The Patent and Patent Licenses are Subsisting and Not Adjudged
Invalid. As of the date hereof, each Patent and patent application of the
Grantor set forth in Schedule II is subsisting and has not been adjudged
invalid, unpatentable or unenforceable, in whole or in part, and, to the
best of such Grantor's knowledge, is valid, patentable and enforceable. As
of the date hereof, each of the Patent Licenses set forth in Schedule II
is validly subsisting and has not been adjudged invalid or unenforceable,
in whole or in part, and, to the best of such Grantor's knowledge, is
valid and enforceable. As of the date hereof, the Grantor has notified the
Administrative Agent in writing of all uses of any item of Patent
Collateral material to such Grantor's business of which such Grantor is
aware which could reasonably be expected to lead to such item becoming
invalid or unenforceable.
(h) No Previous Assignments or Releases. As of the date hereof, the
Grantor has not made an agreement constituting a present or future
assignment, sale, transfer or encumbrance of any of the Collateral (except
for any such assignment, sale, transfer or encumbrance permitted under the
Loan Documents). Except as permitted by the Loan Documents or as required
by law, the Grantor has not granted any license, shop right, release,
covenant not to xxx, or non-assertion assurance to any Person with respect
to any material part of the Collateral which would have a Material Adverse
Effect.
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(i) Proper Statutory Notice. The Grantor has marked its products
with the trademark registration symbol (R), the numbers of all appropriate
patents, the common law trademark symbol (TM), or the designation "patent
pending," as the case may be, to the extent that it is reasonably and
commercially practicable.
(j) No Knowledge of Claims Likely to Arise. Except for the Trademark
Licenses and Patent Licenses listed in Schedules I and II hereto, the
Grantor has no knowledge of the existence of any right or any claim (other
than as permitted by this Agreement or the Loan Documents) that is likely
to be made under or against any item of Collateral contained on Schedules
I and II which would have a Material Adverse Effect.
(k) No Knowledge of Existing or Threatened Claims. No claim has been
made and is continuing or, to the Grantor's knowledge, threatened that the
use by such Grantor of any item of Collateral is invalid or unenforceable
or that the use by such Grantor of any Collateral does or may violate the
rights of any Person, which would have a Material Adverse Effect. To the
Grantor's knowledge, there is currently no infringement or unauthorized
use of any item of Collateral contained on Schedules I and II hereto which
would have a Material Adverse Effect.
The Grantor agrees that the foregoing representations and warranties
shall be deemed to have been made by the Grantor on and as of each date on which
an extension of credit is made by the Lenders to the Borrower under the Senior
Secured Credit Agreement, in each case as though made on and as of each such
date (or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date).
4. Covenants. The Grantor covenants and agrees with the
Administrative Agent and the other Secured Parties that, from and after the date
of this Agreement until the payment in full of the Loans, the Reimbursement
Obligations and to the extent then due and owing, all other Obligations, the
termination of the Revolving Credit Commitments and the expiration, termination
or return to the Issuing Lender of any Letters of Credit:
(a) Further Documentation; Pledge of Instruments and Chattel Paper.
At any time and from time to time, upon the written request of the
Administrative Agent or the Grantor, as the case may be, and at the sole
expense of such Grantor, such Grantor or the Administrative Agent, as the
case may be, will promptly and duly execute and deliver such further
instruments and documents and take such further action as the
Administrative Agent or such Grantor, as the case may be, may reasonably
request for the purpose of obtaining or preserving the full benefits of
this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements
under the Uniform Commercial Code in effect in any jurisdiction with
respect to the Liens created hereby. The Grantor also hereby authorizes
the Administrative Agent to file any such financing or continuation
statement without the signature of such Grantor to the extent permitted by
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applicable law. A carbon, photographic or other reproduction of this
Agreement shall be sufficient as a financing statement for filing in any
jurisdiction. The Administrative Agent agrees to notify such Grantor and
such Grantor agrees to notify the Administrative Agent of any financing or
continuation statement filed by it pursuant to this Section 4(a), provided
that any failure to give any such notice shall not affect the validity or
effectiveness of any such filing.
(b) Indemnification and Expenses. The Grantor agrees to pay, and to
save the Administrative Agent, the other Secured Parties and their
respective agents, officers, directors and successors harmless from, any
and all liabilities and reasonable costs and expenses (including, without
limitation, reasonable legal fees and expenses) (i) with respect to, or
resulting from, any delay by such Grantor in complying with any material
Requirement of Law applicable to any of the Collateral, or (ii) in
connection with any of the transactions contemplated by this Agreement,
provided that such indemnity shall not, as to the Administrative Agent,
any of the other Secured Parties or any of their respective agents,
officers, directors and successors, be available to the extent that such
liabilities, costs and expenses resulted from the gross negligence or
willful misconduct of any of the same. In any suit, proceeding or action
brought by the Administrative Agent or any other Secured Party under any
of the Collateral for any sum owing thereunder, or to enforce any of the
Collateral, the Grantor will save, indemnify and keep the Administrative
Agent, such Secured Party and their respective agents, officers, directors
and successors harmless from and against all expense, loss or damage
suffered by reason of any defense or counterclaim raised in any such suit,
proceeding or action, except to the extent such expense, loss or damage
resulted from the gross negligence or willful misconduct of any of the
same.
(c) Maintenance of Records. The Grantor will keep and maintain at
its own cost and expense reasonably satisfactory and complete records of
the Collateral, and shall xxxx such records to evidence this Agreement and
the Liens and the security interests created hereby. For the
Administrative Agent's and the other Secured Parties' further security,
the Administrative Agent, for the benefit of the Secured Parties, shall
have a security interest in all of the Grantor's books and records
pertaining to the Collateral.
(d) Right of Inspection. Upon reasonable written advance notice to
the Grantor and at reasonable intervals, or at any time and from time to
time after the occurrence and during the continuation of an Event of
Default, the Administrative Agent shall have reasonable access during
normal business hours to all the books, correspondence and records of such
Grantor, and the Administrative Agent and its representatives may examine
the same, and to the extent reasonable take extracts therefrom and make
photocopies thereof, and the Grantor agrees to render to the
Administrative Agent, at such Grantor's reasonable cost and expense, such
clerical and other assistance as may be reasonably requested with regard
thereto.
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(e) Compliance with Laws, etc. The Grantor will comply in all
material respects with all material Requirements of Law applicable to the
Collateral or any part thereof, except to the extent that the failure to
so comply would not be reasonably expected to materially adversely affect
in the aggregate the Administrative Agent's or the other Secured Parties'
rights hereunder, the priority of their Liens on the Collateral or the
value of the Collateral.
(f) Further Identification of Collateral. The Grantor will furnish
to the Administrative Agent from time to time such statements and
schedules further identifying and describing the Collateral, and such
other reports in connection with the Collateral, as the Administrative
Agent may reasonably request, all in reasonable detail.
(g) Security Interest in Any Newly Acquired Collateral. The Grantor
agrees that, should it obtain an ownership interest in any material
Trademark, Patent, Trademark License or Patent License, which is not now a
part of the Collateral, (i) the provisions of Section 2 shall
automatically apply thereto, (ii) any such Trademark, Patent, Trademark
License and Patent License shall automatically become part of the
Collateral, and (iii) with respect to any ownership interest in any such
Trademark, Patent, Trademark License or Patent License that such Grantor
should obtain, it shall give notice thereof to the Administrative Agent in
writing, in reasonable detail, at its address set forth in each of the
Credit Agreements within 45 days after the end of the calendar quarter in
which it obtains such ownership interest. The Grantor authorizes the
Administrative Agent to modify this Agreement by amending Schedules I and
II (and will cooperate reasonably with the Administrative Agent in
effecting any such amendment) to include on Schedule I any Trademark and
Trademark License and on Schedule II any Patent or Patent License of which
it receives notice under this Section, or to prepare and file with the
United States Patent and Trademark Office a supplement to this Agreement
to include any Patent or Trademark of which it receives notice to under
this Section.
(h) Maintenance of the Trademark Collateral. Except as permitted in
the Loan Documents the Grantor agrees to take all reasonably necessary
steps, including, without limitation, in the United States Patent and
Trademark Office or in any court, to (i) maintain each trademark
registration and each Trademark License identified on Schedule I hereto,
and (ii) pursue each trademark application now or hereafter identified in
Schedule I hereto, including, without limitation, the filing of responses
to office actions issued by the United States Patent and Trademark Office,
the filing of applications for renewal, the filing of affidavits under
Sections 8 and 15 of the United States Trademark Act, and the
participation in opposition, cancellation, infringement and
misappropriation proceedings, except, in each case in which such Grantor
has reasonably determined that any of the foregoing is not of material
economic value to it. The Grantor agrees to take corresponding steps with
respect to each new or acquired trademark or service xxxx
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registration, or application for trademark or service xxxx registration,
or any rights obtained under any Trademark License, in each case, which it
is now or later becomes entitled, except in each case in which such
Grantor has reasonably determined that any of the foregoing is not of
material economic value to it. Any expenses incurred in connection with
such activities shall be borne by such Grantor.
(i) Maintenance of the Patent Collateral. The Grantor agrees to take
all necessary steps, including, without limitation, in the United States
Patent and Trademark Office or in any court, to (i) maintain each patent
and each Patent License identified on Schedule II hereto, and (ii) pursue
each patent application, now or hereafter identified in Schedule II
hereto, including, without limitation, the filing of divisional,
continuation, continuation-in-part and substitute applications, the filing
of applications for reissue, renewal or extensions, the payment of
maintenance fees, and the participation in interference, reexamination,
opposition, infringement and misappropriation proceedings, except, in each
case in which such Grantor has reasonably determined that any of the
foregoing is not of material economic value to it. The Grantor agrees to
take corresponding steps with respect to each new or acquired patent,
patent application, or any rights obtained under any Patent License, in
each case, which it is now or later becomes entitled, except in each case
in which such Grantor has reasonably determined that any of the foregoing
is not of material economic value to it. Any expenses incurred in
connection with such activities shall be borne by the Grantor.
(j) Preservation and Protection of the Trademark Collateral and
Patent Collateral. Except as provided in Section 4(k) hereof, the Grantor
shall take all steps which it or the Administrative Agent deems reasonably
appropriate under the circumstances to preserve and protect its material
Trademark Collateral and Patent Collateral.
(k) Grantor Shall Not Abandon any Collateral. The Grantor shall not
abandon any trademark registration, patent or any pending trademark or
patent application, in each case listed on Schedule I or Schedule II,
without the written consent of the Administrative Agent, unless such
Grantor shall have previously determined that such use or the pursuit or
maintenance of such trademark registration, patent or pending trademark or
patent application is not of material economic value to it, in which case,
such Grantor will, at least annually, give notice of any such abandonment
to the Administrative Agent in writing, in reasonable detail, at its
address set forth in the Senior Secured Credit Agreement.
(l) Infringement of Any Collateral. In the event that any Grantor
becomes aware that any item of the Collateral which such Grantor has
reasonably determined to be material to its business is infringed or
misappropriated by a third party, which infringement or misappropriation
would reasonably be expected to have a Material Adverse Effect, such
Grantor shall notify the Administrative Agent promptly and in
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writing, in reasonable detail, at its address set forth in the Senior
Secured Credit Agreement, and shall take such actions as such Grantor or
the Administrative Agent deems reasonably appropriate under the
circumstances to protect such Collateral, including, without limitation,
suing for infringement or misappropriation and for an injunction against
such infringement or misappropriation. Any expense incurred in connection
with such activities shall be borne by such Grantor. The Grantor will
advise the Administrative Agent promptly and in writing, in reasonable
detail, at its address set forth in the Senior Secured Credit Agreement,
of any adverse determination or the institution of any proceeding
(including, without limitation, the institution of any proceeding in the
United States Patent and Trademark Office or any court) regarding any item
of the Collateral which has a Material Adverse Effect.
(m) Use of Statutory Notice. The Grantor shall xxxx its products
with the trademark registration symbol (R), the numbers of all appropriate
patents, the common law trademark symbol (TM), or the designation "patent
pending," as the case may be, to the extent that it is reasonably and
commercially practicable.
(n) Limitation on Liens on Collateral. The Grantor will not create,
incur or permit to exist, will defend the Collateral against, and will
take such other action as is reasonably necessary to remove, any material
Lien or material adverse claim on or to any of the Collateral, other than
Liens created hereby and other than as permitted pursuant to the Loan
Documents (including, without limitation, any Liens permitted to exist on
the Collateral pursuant to subsection 8.3 of the Senior Secured Credit
Agreement), and will defend the right, title and interest of the
Administrative Agent and the other Secured Parties in and to any of the
Collateral against the claims and demands of all Persons whomsoever,
except where failure to defend would not have a Material Adverse Effect.
(o) Limitations on Dispositions of Collateral. Without the prior
written consent of the Administrative Agent, the Grantor will not sell,
assign, transfer, exchange or otherwise dispose of, or grant any option
with respect to, the Collateral, or attempt, offer or contract to do so,
except with respect to licenses in the ordinary course of business or as
permitted by this Agreement or the Loan Documents.
(p) Notices. The Grantor will advise the Administrative Agent
promptly and in writing, in reasonable detail, at its address set forth in
the Senior Secured Credit Agreement, (i) of any Lien (other than Liens
created hereby or permitted under the Loan Documents, including, without
limitation, any Liens permitted to exist on the Collateral pursuant to
subsection 8.3 of the Senior Secured Credit Agreement) on any Patents or
Trademarks and (ii) of the occurrence of any other event which would
reasonably be expected in the aggregate to have a material adverse effect
on the aggregate value of the Collateral taken as a whole or the Liens
created hereunder.
5. Administrative Agent's Appointment as Attorney-in-Fact.
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(a) Powers. The Grantor hereby irrevocably constitutes and appoints
the Administrative Agent and any officer or agent of the Administrative Agent,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of such Grantor and
in the name of such Grantor or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be reasonably necessary
or desirable to accomplish the purposes of this Agreement to the extent
permitted by law, and, without limiting the generality of the foregoing, to the
extent permitted by law, the Grantor hereby gives the Administrative Agent the
power and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do, at any time when an Event of Default has occurred and is
continuing, the following:
(i) to execute and deliver any and all agreements, instruments,
documents, and papers as the Administrative Agent may reasonably request
to evidence the Administrative Agent's and the other Secured Parties'
security interest in any of the Collateral and the goodwill of such
Grantor relating thereto or represented thereby;
(ii) in the name of such Grantor or its own name, or otherwise, to
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
General Intangible (to the extent that the foregoing constitute
Collateral) or with respect to any other Collateral and to file any claim
or to take any other action or institute any proceeding in any court of
law or equity or otherwise deemed appropriate by the Administrative Agent
for the purpose of collecting any and all such moneys due under such
General Intangible or with respect to any other Collateral whenever
payable;
(iii) to pay or discharge Liens placed on the Collateral, other than
Liens permitted under this Agreement or the other Loan Documents,
including, without limitation, any Liens permitted to exist on the
Collateral pursuant to subsection 8.3 of the Senior Secured Credit
Agreement; and
(iv) (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (B) to ask for, or demand, collect, receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral; (C)
to sign and indorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with
any of the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any thereof and to enforce any other right in
respect of any Collateral; (E) to defend any suit, action or proceeding
brought against the Grantor with respect to any of the Collateral; (F) to
settle, compromise or adjust any suit, action or proceeding described in
clause (E) above and, in connection
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therewith, to give such discharges or releases as the Administrative Agent
may deem appropriate; (G) subject to any pre-existing reserved rights or
licenses, to assign any Patent or Trademark constituting Collateral (along
with the goodwill of the business to which any such Patent or Trademark
pertains), for such term or terms, on such conditions, and in such manner,
as the Administrative Agent shall in its sole discretion determine; and
(H) generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and to do, at the Administrative Agent's option
and the Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems reasonably necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's and the other Secured Parties' Liens thereon and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
The Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until the payment in full of the Loans, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Revolving Credit Commitments and the expiration, termination
or return to the Issuing Lender of any Letters of Credit.
(b) Other Powers. The Grantor also authorizes the Administrative
Agent, from time to time if an Event of Default shall have occurred and be
continuing, to execute, in connection with any sale provided for in Section 8
hereof, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(c) No Duty on the Part of Administrative Agent or Secured Parties.
The powers conferred on the Administrative Agent and the other Secured Parties
hereunder are solely to protect the Administrative Agent's and the other Secured
Parties' interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any other Secured Party to exercise any such powers. The
Administrative Agent and the other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees, affiliates,
agents or successors shall be responsible to the Grantor for any act or failure
to act hereunder, except for gross negligence or willful misconduct of any of
the same.
6. Performance by Administrative Agent of Grantor's Obligations. If
the Grantor fails to perform or comply with any of its agreements contained
herein and the Administrative Agent, as provided for by the terms of this
Agreement, shall perform or comply, or otherwise cause performance or
compliance, with such agreements, the reasonable expenses of the Administrative
Agent incurred in connection with such performance or compliance, together with
interest thereon at a rate per annum equal to 1.75% above the rate applicable to
ABR Loans that are Term Loans, shall be payable by such Grantor to the
Administrative Agent on demand, and such Grantor's obligations to make such
payments shall constitute Obligations secured hereby.
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7. Proceeds. It is agreed that if an Event of Default shall occur
and be continuing, (a) all Proceeds of any Collateral received by the Grantor
consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Administrative Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Administrative
Agent, if required), and (b) any and all such Proceeds received by the
Administrative Agent (whether from the Grantor or otherwise) shall be held by
the Administrative Agent for the benefit of the Secured Parties as collateral
security for the Obligations (whether matured or unmatured), and/or then or at
any time thereafter may, in the sole discretion of the Administrative Agent, be
applied by the Administrative Agent against the Obligations then due and owing
in the following order of priority:
FIRST, to the payment of all reasonable costs and expenses incurred
by the Administrative Agent (including, without limitation, in its
capacity as Senior Secured Credit Agreement Administrative Agent) in
connection with this Agreement, the Guarantee and Collateral Agreement,
the Senior Secured Credit Agreement, any other Loan Document or any of the
Obligations, including, without limitation, all court costs and the
reasonable fees and expenses of its agents and legal counsel, and any
other reasonable costs or expenses incurred in connection with the
exercise by the Administrative Agent (including, without limitation, in
its capacity as Senior Secured Credit Agreement Administrative Agent) of
any right or remedy under this Agreement, the Senior Secured Credit
Agreement, or any other Loan Document;
SECOND, to the ratable satisfaction of all other Obligations; and
THIRD, to the Grantor or its successors or assigns, or to whomsoever
may be lawfully entitled to receive the same.
8. Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent, on behalf of the Secured Parties, may exercise all
rights and remedies of a secured party under the Code, and, to the extent
permitted by law, all other rights and remedies granted to the Administrative
Agent or any Secured Party in this Agreement and the other Loan Documents and in
any other instrument or agreement securing, evidencing or relating to the
Obligations. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances, to the extent permitted by law, forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the
Administrative Agent or any other Secured Party or elsewhere
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upon such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption
of any credit risk. The Administrative Agent or any other Secured Party shall
have the right, to the extent permitted by law, upon any such sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in the Grantor, which right or equity is hereby waived and
released. The Grantor further agrees, at the Administrative Agent's request, to
assemble the Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select, whether at such
Grantor's premises or elsewhere. In the event of any sale, assignment, or other
disposition of any of the Collateral, the goodwill of the business connected
with and symbolized by any Trademark Collateral subject to such disposition
shall be included, and such Grantor shall supply to the Administrative Agent or
its designee such Grantor's know-how and expertise relating to the Collateral
subject to such disposition, and such Grantor's notebooks, studies, reports,
records, documents and things embodying the same or relating to the inventions,
processes or ideas covered by, and to the manufacture of any products under or
in connection with, the Collateral subject to such disposition, and such
Grantor's customer's lists, studies and surveys and other records and documents
relating to the distribution, marketing, advertising and sale of products
relating to the Collateral subject to such disposition. The Administrative Agent
shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
of the Administrative Agent and the other Secured Parties hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
and performance in whole or in part of the Obligations then due and owing, in
the order of priority specified in Section 7 hereof, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Administrative Agent account for the surplus,
if any, to the Grantor. To the extent permitted by applicable law, (a) the
Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any other Secured Party arising out of the repossession,
retention or sale of the Collateral, other than any such claims, damages and
demands that may arise from the gross negligence or willful misconduct of any of
them, and (b) any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition. The Grantor shall
remain liable for any deficiency if the proceeds of any sale or other
disposition of the Collateral are insufficient to pay in full the Loans, the
Reimbursement Obligations, and, to the extent then due and owing, all other
Obligations, including, without limitation, the reasonable fees and
disbursements of any attorneys employed by the Administrative Agent or any other
Secured Party to collect such deficiency, as provided in the Senior Secured
Credit Agreement.
9. Limitation on Duties Regarding Preservation of Collateral. The
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Administrative Agent deals with similar
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property for its own account. Neither the Administrative Agent, any other
Secured Party, nor any of their respective directors, officers, employees,
affiliates or agents shall be liable for failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Grantor or any other Person.
10. Powers Coupled with an Interest. All authorizations and agencies
herein contained with respect to the Collateral are powers coupled with an
interest and are irrevocable until the payment in full of the Loans, the
Reimbursement Obligations and, to the extent then due and owing, all other
Obligations, the termination of the Revolving Credit Commitments and the
expiration, termination or return to the Issuing Lender of any Letters of
Credit.
11. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
13. No Waiver; Cumulative Remedies. Neither the Administrative Agent
nor any other Secured Party nor the Grantor shall by any act (except by a
written instrument pursuant to Section 14 hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, any other Secured Party or
the Grantor, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
any other Secured Party or the Grantor of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent, such other Secured Party or the Grantor would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
14. Waivers and Amendments; Successors and Assigns. None of the
terms or provisions of this Agreement may be amended, supplemented, waived or
otherwise modified except by a written instrument executed by the Grantor and
the Administrative Agent, provided that, if requested by the Grantor, any
provision of this Agreement for the benefit of the Administrative Agent and/or
the other Secured Parties may be waived by the Administrative Agent in a written
letter or agreement executed by the Administrative Agent or
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by telex or facsimile transmission from the Administrative Agent. This Agreement
shall be binding upon and shall inure to the benefit of the Grantor and its
successors and assigns, and the Administrative Agent and the other Secured
Parties and their respective successors, indorsees, transferees and assigns,
except that (other than in accordance with subsection 8.5 of the Senior Secured
Credit Agreement) the Grantor shall not assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Administrative Agent.
15. Notices. All notices, requests and demands to or upon the
respective parties hereto shall be made in accordance with subsection 11.2 of
the Senior Secured Credit Agreement. The Administrative Agent, the Secured
Parties and the Grantor may change their respective addresses and transmission
numbers for notices by notice in the manner provided in this Section 15.
16. Authority of Administrative Agent. The Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the other
Secured Parties, be governed by the Senior Secured Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and such Grantor, the Administrative
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and such
Grantor shall not be under any obligation to make any inquiry respecting such
authority.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
18. Release of Collateral and Termination. (a) This Agreement shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms and the security interest created by this Agreement shall
not be released until the payment in full of the Loans, the Reimbursement
Obligations and the other Obligations then due and owing shall have occurred,
the Revolving Credit Commitments shall have been terminated and any Letters of
Credit shall have expired or been terminated or returned to the Issuing Lender,
at which time the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and the Grantor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the Grantor,
provided that if any payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any other Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Grantor or
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any other Loan Party, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or a trustee or similar officer for, the Grantor
or any other Loan Party or any substantial part of its property, or otherwise,
this Agreement, all rights hereunder and the Liens created hereby shall continue
to be effective, or be reinstated, as though such payments had not been made.
Upon request of the Grantor following any such termination, the Administrative
Agent shall reassign (at the sole cost and expense of such Grantor) to such
Grantor any Collateral held by the Administrative Agent hereunder, and execute
and deliver (at the sole cost and expense of such Grantor) to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination
and reassignment.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by the Grantor in a transaction permitted by the Senior Secured
Credit Agreement, then the Administrative Agent shall execute and deliver to the
Grantor (at the sole cost and expense of such Grantor) all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral.
19. Incorporation of Provisions of Guarantee and Collateral
Agreement. The Grantor hereby acknowledges and affirms that the rights and
remedies of the Administrative Agent with respect to the security interest in
the Collateral made and granted hereby are more fully set forth in the Guarantee
and Collateral Agreement, the terms, conditions and other provisions of which,
in so far as they relate to the Collateral, such security interest and such
rights and remedies, are incorporated by reference herein as if fully set forth
herein. Nothing in this Agreement shall defer or impair the attachment or
perfection of any security interest in any collateral described in the Guarantee
and Collateral Agreement which would attach or be perfected pursuant to the
terms of the Guarantee and Collateral Agreement without action by the Grantor or
any other Person.
20. Interpretation. In the event of a conflict between any term of
this Agreement and the terms of the Senior Secured Credit Agreement, the terms
of the Senior Secured Credit Agreement shall control.
21. Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Grantor and the Administrative Agent with
respect to the subject matter hereof and there are no promises or
representations by the Grantor, the Administrative Agent or any other Secured
Party relative to the subject matter hereof not reflected or referred to herein
or therein.
22. Submission To Jurisdiction; Waivers. Each party hereto hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgement
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the
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United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient forum and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Grantor or the applicable Secured Party, as the case may be, at the
address referred to in Section 15 or at such other address of which the
Administrative Agent and the Grantor shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section 22 any punitive damages.
23. WAIVER OF JURY TRIAL. THE GRANTOR AND THE ADMINISTRATIVE AGENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
24. Counterparts. This Agreement may be executed and acknowledged by
one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
[GRANTOR]
By: __________________________
Title:
ACKNOWLEDGED AND AGREED AS OF
THE DATE HEREOF BY:
THE CHASE MANHATTAN BANK, as Administrative Agent
By:__________________________________________________
Title:
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the ___________ day of _________, 1997, before me personally came
______________ to me known, who, being by me duly sworn, did depose and say he
resides at ____________________________________________________________________
____________________________ and that he is the_________________________________
of [GRANTOR], the corporation described in and which executed the above
instrument; that he has been authorized to execute said instrument on behalf of
said corporation; and that he signed said instrument on behalf of said
corporation pursuant to said authority.
--------------------------
Notary Public
[Notarial Seal]
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the _______ day of _________, 1997, before me personally came
____________ to me known, who, being by me duly sworn, did depose and say he
resides at ____________________________________________________________________
___________________________ and that he is the ________________________________
of THE CHASE MANHATTAN BANK, the national banking association described in and
which executed the above instrument; that he has been authorized to execute said
instrument on behalf of said association; and that he has signed said instrument
on behalf of said association pursuant to said authority.
--------------------------
Notary Public
[Notarial Seal]
247
Schedule I
TRADEMARKS AND TRADEMARK LICENSES
248
Schedule II
PATENTS AND PATENT LICENSES
249
Schedule III
EXISTING SECURITY INTERESTS
250
EXHIBIT D TO
CREDIT AGREEMENT
[California]
Recording requested by, and when
recorded, please return to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
a partnership which includes
professional corporations
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: Xxxxx X. Xxxxxxxx, Esq.
THIS INSTRUMENT IS TO BE INDEXED IN THE OFFICE OF THE LOS ANGELES
COUNTY RECORDS AS BOTH A DEED OF TRUST AND A FIXTURE FILING
DEED OF TRUST, ASSIGNMENT OF
RENTS AND LEASES, SECURITY
AGREEMENT AND FIXTURE FILING
from
EV INTERNATIONAL, INC., Grantor
to
CHICAGO TITLE INSURANCE COMPANY, Trustee
for the use and
benefit of
THE CHASE MANHATTAN BANK, as Administrative Agent, Beneficiary
DATED AS OF FEBRUARY __, 1997
251
[California]
DEED OF TRUST, ASSIGNMENT OF RENTS
AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY
AGREEMENT AND FIXTURE FILING, dated as of February __, 1997 is made by EV
INTERNATIONAL, INC., a Delaware corporation, as successor by merger and name
change to LFE Corporation ("GRANTOR"), whose address is 000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, to CHICAGO TITLE INSURANCE COMPANY, a ____________
corporation, ("TRUSTEE") whose address is ___________________________________for
the use and benefit of THE CHASE MANHATTAN BANK, a New York banking corporation
whose address is 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as Administrative
Agent (in such capacity, "BENEFICIARY") for the several banks and other
financial institutions (the "LENDERS") from time to time parties to the Credit
Agreement dated as of February __, 1997, (as the same may be amended,
supplemented, waived or otherwise modified from time to time the "SENIOR SECURED
CREDIT AGREEMENT") among Gulton Acquisition Corp., a Delaware corporation
("BORROWER"), the Lenders and Beneficiary. References to this "Deed of Trust"
shall mean this instrument and any and all renewals, modifications, amendments,
supplements, extensions, consolidations, substitutions, spreaders and
replacements of this instrument. Capitalized terms used and not otherwise
defined herein shall have the meanings assigned thereto in the Senior Secured
Credit Agreement.
Background
A. Gulton Holdings Corp., a Delaware corporation which, on or
after the Effective Date, will be renamed EVI Audio Holding, Inc. ("HOLDINGS")
and Borrower, its direct Wholly Owned Subsidiary, are newly formed companies
organized by an investor group led by Greenwich Street Capital Partners, Inc., a
Delaware corporation ("GSCP").
B. Borrower acquired Gulton Industries Inc., a Delaware
corporation ("GII") which was a subsidiary of Xxxx XX Industries, Inc. ("XXXX
XX") through the purchase from Xxxx XX and Xxxx XX PLC of the capital stock of
GII (the "ACQUISITION") pursuant to the Stock Purchase Agreement, dated as of
December 12, 1996, by and among Xxxx XX, Xxxx XX PLC and Borrower (as amended,
supplemented, waived or otherwise modified from time to time in accordance with
the Senior Secured Credit Agreement, the "STOCK PURCHASE AGREEMENT").
C. Borrower merged with and into GII (the "FIRST MERGER"), and
GII as surviving corporation of the First Merger merged (the "SECOND MERGER";
the First Merger
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together with the Second Merger, the "MERGERS") with and into Electro-Voice,
Incorporated, a Delaware corporation and a Wholly Owned Subsidiary of GII, which
was thereupon renamed EV International, Inc.
D. In order to (i) finance a portion of the Acquisition
Consideration, (ii) refinance a portion of the existing indebtedness of GII and
its subsidiaries, (iii) pay certain fees, taxes and expenses related to (x) the
Acquisition and the financing thereof and (y) the refinancing of such existing
indebtedness of GII and its subsidiaries and (iv) finance the working capital
and other business requirements of Grantor and its subsidiaries following the
consummation of the Acquisition and the Merger, Acquisition Co. has requested
that the Lenders make the Loans and issue and participate in the Letters of
Credit in accordance with the terms of the Senior Secured Credit Agreement.
E. Grantor is the owner of the parcel(s) of real property
described on Schedule A attached hereto (such real property, together with all
of the buildings, improvements, structures and fixtures now or subsequently
located thereon (the "IMPROVEMENTS"), being collectively referred to as the
"REAL ESTATE").
F. Pursuant to the terms of the Senior Secured Credit
Agreement, the Lenders have agreed, among other things, to make the Loans and
the Issuing Lender has agreed to issue, and the L/C Participants have agreed to
acquire undivided participating interests in, the Letter(s) of Credit for the
account of the Borrower upon the terms and subject to the conditions set forth
in the Senior Secured Credit Agreement which conditions include the grant by
Grantor to Beneficiary of a first lien upon and perfected security interest in,
among other things, all estate, right, title and interest of Grantor in and to
the Real Estate pursuant to the terms hereof.
G. Grantor is the successor by merger to Borrower, and it is
to the advantage and benefit of Grantor that the Lenders make the Loans to
Borrower.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor agrees that to secure:
(a) the repayment of principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans
and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans (as they may be evidenced by the Notes from
time to time) and all other obligations (including the Reimbursement
Obligations) and liabilities of Grantor to Beneficiary, the Issuing
Lender and the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Senior
Secured Credit Agreement, the Loans,
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the Letters of Credit, the Security Documents, any Guarantee Obligation
of Grantor as to which any Lender is a beneficiary, any Permitted
Hedging Arrangement with any Lender or any banking affiliate of any
Lender (whether entered into directly, or guaranteed, by Grantor), the
Guarantee and Collateral Agreement dated as of February __, 1997
between Grantor, Holdings and Beneficiary (the "GUARANTEE") or any
other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agent, the Issuing Lender or any Lender
that are required to be paid by any Loan Party pursuant to the Senior
Secured Credit Agreement) (the items set forth above being referred to
collectively as the "INDEBTEDNESS"); and
(b) the performance of all covenants, agreements, obligations
and liabilities of Grantor (the "OBLIGATIONS") under or pursuant to the
provisions of the Senior Secured Credit Agreement, the Loans, this Deed
of Trust, the Guarantee, any other document securing payment of the
Indebtedness (the "SECURITY DOCUMENTS") and any amendments,
supplements, extensions, renewals, restatements, replacements or
modifications of any of the foregoing (the Senior Secured Credit
Agreement, the Loans, the Letters of Credit, this Deed of Trust, the
Guarantee and all other documents and instruments from time to time
evidencing, securing or guaranteeing the payment of the Indebtedness or
the performance of the Obligations, as any of the same may be amended,
supplemented, extended, renewed, restated, replaced or modified from
time to time, are collectively referred to as the "LOAN DOCUMENTS");
GRANTOR HEREBY IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE, IN TRUST,
WITH POWER OF SALE, THE FOLLOWING:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Grantor, in possession or expectancy, in and to the Real Estate or
any part thereof;
(C) all right, title and interest of Grantor in, to and under
all easements, rights of way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water and riparian
rights, development rights, air rights, mineral rights and all estates,
rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents, issues, profits
and revenue thereof and all land lying in the bed of any street, road
or avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) all right, title and interest of Grantor in and to all of
the fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles
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of personal property of every kind and nature whatsoever, and all
appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts
and accessories) currently owned or subsequently acquired by Grantor
and now or subsequently attached to, or contained in or used or usable
in any way in connection with any operation or letting of the Real
Estate, including but without limiting the generality of the foregoing,
all screens, awnings, shades, blinds, curtains, draperies, artwork,
carpets, rugs, storm doors and windows, furniture and furnishings,
heating, electrical, and mechanical equipment, lighting, switchboards,
plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security systems,
motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description (all of the
foregoing in this paragraph (D) being referred to as the "EQUIPMENT");
(E) all right, title and interest of Grantor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Grantor or constructed, assembled or placed by Grantor on the Real
Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials to be used by Grantor whether stored at the Real
Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Grantor;
(F) all right, title and interest of Grantor in, to and under
all leases, subleases, underlettings, concession agreements, management
agreements, licenses and other agreements relating to the use or
occupancy of the Real Estate or the Equipment or any part thereof, now
existing or subsequently entered into by Grantor and whether written or
oral and all guarantees of any of the foregoing (collectively, as any
of the foregoing may be amended, restated, extended, renewed or
modified from time to time, the "LEASES"), and all rights of Grantor in
respect of cash and securities deposited thereunder and the right to
receive and collect the revenues, income, rents, issues and profits
thereof, together with all other rents, royalties, issues, profits,
revenue, income and other benefits arising from the use and enjoyment
of the Trust Property (as defined below) (collectively, the "RENTS");
(G) all books and records relating to or used in connection
with the operation of the Real Estate or the Equipment or any part
thereof;
(H) all right, title and interest of Grantor, to the extent
assignable, in and to (i) all unearned premiums under insurance
policies now or subsequently obtained by
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Grantor relating to the Real Estate or Equipment, (ii) any such
insurance policies, (iii) all proceeds of any such insurance policies
(including title insurance policies) including the right to collect and
receive such proceeds, subject to the provisions relating to insurance
generally set forth below, and (iv) all awards and other compensation,
including the interest payable thereon and the right to collect and
receive the same, made to the present or any subsequent owner of the
Real Estate or Equipment for the taking by eminent domain, condemnation
or otherwise, of all or any part of the Real Estate or any easement or
other right therein, subject to the provisions relating to condemnation
awards generally set forth below;
(I) all right, title and interest of Grantor, to the extent
assignable, in and to (i) all contracts from time to time executed by
Grantor or any manager or agent on its behalf relating to the
ownership, construction, maintenance, repair, operation, occupancy,
sale or financing of the Real Estate or Equipment or any part thereof
and all agreements relating to the purchase or lease of any portion of
the Real Estate or any property which is adjacent or peripheral to the
Real Estate, together with the right to exercise such options
(collectively, the "CONTRACTS"), (ii) all consents, licenses, building
permits, certificates of occupancy and other governmental approvals
relating to construction, completion, occupancy, use or operation of
the Real Estate or any part thereof (collectively, the "PERMITS") and
(iii) all drawings, plans, specifications and similar or related items
relating to the Real Estate (collectively, the "PLANS");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Beneficiary as provided in this Deed of Trust;
(K) all accounts and revenues arising from the operation of
the Improvements; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Grantor and described in the foregoing
clauses (A) through (E) are collectively referred to as the "PREMISES", and
those described in the foregoing clauses (A) through (L) are collectively
referred to as the "TRUST PROPERTY").
TO HAVE AND TO HOLD the Trust Property and the rights and
privileges hereby granted unto Trustee, its successors and assigns for the uses
and purposes set forth, until the Indebtedness is fully paid and the Obligations
fully performed or as otherwise expressly provided in the Section of this Deed
of Trust entitled "Release of Deed of Trust".
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Terms and Conditions
Grantor further represents, warrants, covenants and agrees
with Trustee and Beneficiary as follows:
1. Warranty of Title. Grantor warrants that Grantor has good
title to the Real Estate in fee simple and good title to the rest of the Trust
Property, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Beneficiary to insure the
lien of this Deed of Trust and Liens expressly permitted under the Senior
Secured Credit Agreement (collectively, the "PERMITTED EXCEPTIONS") and Grantor
shall warrant, defend and preserve such title and the rights granted by this
Deed of Trust with respect thereto against all claims of all persons and
entities. Grantor further warrants that it has the right to grant this Deed of
Trust.
2. Payment of Indebtedness. Grantor shall pay the Indebtedness
at the times and places and in the manner specified in the Senior Secured Credit
Agreement and shall perform all the Obligations.
3. Requirements. (a) Grantor shall promptly comply with, or
cause to be complied with, and conform to all present and future laws, statutes,
codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements, and irrespective of the nature of the work to be done, of each of
the United States of America, any State and any municipality, local government
or other political subdivision thereof and any agency, department, bureau,
board, commission or other instrumentality of any of them, now existing or
subsequently created (collectively, "GOVERNMENTAL AUTHORITY") which has
jurisdiction over the Trust Property and all covenants, restrictions and
conditions now or later of record which may be applicable to any of the Trust
Property, or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of any of the Trust Property,
except to the extent that failure to comply therewith, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Grantor or to any of the Trust Property and all covenants, restrictions, and
conditions which now or later may be applicable to any of the Trust Property are
collectively referred to as the "LEGAL REQUIREMENTS".
(b) From and after the date of this Deed of Trust, except as
expressly permitted under the Senior Secured Credit Agreement or herein, Grantor
shall not by act or omission permit, other than Permitted Exceptions, any
building or other improvement on any premises not subject to this Deed of Trust
to rely on the Premises or any part thereof or any interest therein to fulfill
any Legal Requirement, and Grantor hereby assigns to Beneficiary any and all
rights to give consent for all or any portion of the Premises or any interest
therein to be so used. Grantor shall not by act or omission impair the integrity
of any of the Real Estate as a single zoning lot separate and apart from all
other premises. Grantor represents that each parcel of the Real Estate
constitutes a legally subdivided lot, in compliance with all subdivision
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laws and similar Legal Requirements, except to the extent that failure to comply
therewith, in the aggregate, would not reasonably be expected to have a Material
Adverse Effect. Any act or omission by Grantor which would result in a violation
of any of the provisions of this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Except as
expressly permitted under the Senior Secured Credit Agreement, Grantor, prior to
delinquency, shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes), all
charges for any easement or agreement maintained for the benefit of any of the
Trust Property, all general and special assessments, levies, permits, inspection
and license fees, all water and sewer rents and charges and all other public
charges even if unforeseen or extraordinary, imposed upon or assessed against or
which may become a lien on any of the Trust Property, or arising in respect of
the occupancy, use or possession thereof, together with any penalties or
interest on any of the foregoing (all of the foregoing are collectively referred
to as the "IMPOSITIONS"). Grantor shall within 30 days after the request of
Beneficiary deliver to Beneficiary (i) original or copies of receipted bills and
cancelled checks or other evidence of payment of such Imposition if it is a real
estate tax or other public charge and (ii) evidence acceptable to Beneficiary in
its reasonable discretion showing the payment of any other such Imposition. If
by law any Imposition, at Grantor's option, may be paid in installments (whether
or not interest shall accrue on the unpaid balance of such Imposition), Grantor
may elect to pay such Imposition in such installments and shall be responsible
for the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of Trustee
or Beneficiary under this Deed of Trust or otherwise, without notice or demand
to Grantor, to pay any Imposition after the date such Imposition shall have
become delinquent, and to add to the Indebtedness the amount so paid, together
with interest from the time of payment at the rate of interest described in
paragraph 4.1(c) of the Senior Secured Credit Agreement (the "DEFAULT RATE").
Any sums paid by Trustee or Beneficiary in discharge of any Impositions shall be
(i) a charge on the Premises secured hereby prior to any right or title to,
interest in, or claim upon the Premises subordinate to the lien of this Deed of
Trust, and (ii) payable on demand by Grantor to Trustee or Beneficiary, as the
case may be, together with interest at the Default Rate as set forth above.
(c) Grantor shall not claim, demand or be entitled to receive
any credit or credits toward the satisfaction of this Deed of Trust or on any
interest payable thereon for any taxes assessed against the Trust Property or
any part thereof, and shall not claim any deduction from the taxable value of
the Trust Property by reason of this Deed of Trust.
(d) Grantor shall have the right pursuant to subsection 7.3 of
the Senior Secured Credit Agreement to contest in good faith to the amount or
validity of any Imposition by appropriate proceedings diligently conducted with
reserves in conformity with GAAP, provided that Grantor shall demonstrate to
Beneficiary's reasonable satisfaction that such
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proceedings shall operate conclusively to prevent the sale of the Trust
Property, or any part thereof, to satisfy such Imposition prior to final
determination of such proceedings.
(e) Upon written notice to Grantor, Beneficiary during the
continuance of an Event of Default (as defined below) shall be entitled to
require Grantor to pay monthly in advance to Beneficiary the equivalent of
1/12th of the estimated annual Impositions. Beneficiary may commingle such funds
with its own funds but Grantor shall be entitled to interest thereon at a rate
mutually agreed upon by Grantor and Beneficiary.
5. Insurance. (a) Grantor shall maintain or cause to be
maintained on all of the Premises:
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss (provided, however, that the maintenance of insurance
against earthquake, windstorm, flood and freeze risks shall be subject
to availability of such insurance coverage on commercially reasonable
terms). The policy shall include building ordinance law endorsements
and the policy limits shall be automatically reinstated after each loss
(other than with respect to flood and earthquake coverage which shall
be reinstated on a commercially reasonable basis);
(ii) commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage,
subject to standard policy terms, conditions and exclusions, occurring
on, in or about the Premises in an amount not less than $10,000,000
combined single limit with respect to personal injury, bodily injury or
death, or property damage, relating to any one occurrence plus such
excess limits as Beneficiary shall reasonably request from time to
time;
(iii) when and to the extent reasonably required by
Beneficiary, insurance against loss or damage by any other risk
commonly insured against by persons occupying or using like properties
in the locality or localities in which the Real Estate is situated;
(iv) during the course of any construction or repair of
Improvements, commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), (including coverage
for elevators and escalators, if any). The policy shall include
coverage for independent contractors and completed operations. The
completed operations coverage shall stay in effect for two years after
construction of any Improvements has been completed. The policy shall
provide coverage on an occurrence basis against claims for personal
injury, including, without limitation,
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bodily injury and death, and property damage resulting from Grantor's
negligence or other behavior for which Grantor may be adjudged
tortiously liable, subject to standard policy terms, conditions and
exclusions, occurring on, in or about the Premises and the adjoining
streets, sidewalks and passageways, such insurance to afford immediate
minimum protection to a limit of not less than that reasonably required
by Beneficiary with respect to personal injury, bodily injury or death
to any one or more persons or damage to property;
(v) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Grantor engaged on or with
respect to the Premises in such amounts no less than the limits
established by law or in the case of employer's liability insurance, no
less than $500,000, provided that Grantor may self-insure any or all
workers' compensation liabilities;
(vi) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed
value property insurance form against "all risks of physical loss"
(subject to standard policy exclusions), including collapse, water
damage, flood and earthquake and transit coverage, during construction
or repairs of the Improvements, with deductible approved by Beneficiary
in its reasonable discretion, in reporting form, covering the total
replacement value of work performed and equipment, supplies and
materials furnished (with an appropriate limit for soft costs in the
case of construction); provided, however, that the maintenance of
insurance against earthquake and flood risks shall be subject to
availability of such insurance coverage on commercially reasonable
terms;
(vii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping,
heating, air conditioning and elevator equipment and escalator
equipment, provided the Improvements contain equipment of such nature,
in such amounts as are reasonably satisfactory to Beneficiary but not
less than the lesser of $1,000,000 or 10% of the value of the
Improvements;
(viii) if any portion of the Premises are located in an area
identified in the Federal Register as having special flood hazards by
the Secretary of Housing and Urban Development or other applicable
agency, flood insurance covering any parcel of the Trust Property which
contains improvements in an amount satisfactory to Beneficiary in its
reasonable discretion, but in no event less than the maximum limit of
coverage available with respect to the particular type of property
under the National Flood Insurance Act of 1968, as amended and with a
term ending not later than the maturity of the Indebtedness and
Beneficiary shall receive confirmation that Grantor has received the
notice required pursuant to Section 208.8(e)(3) of Regulation H of the
Board of Governors of The Federal Reserve System; and
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(ix) such other insurance in such amounts as Beneficiary may
reasonably request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or, in the case of
property and boiler and machinery insurance, materially amended without 30-days'
prior written notice to Beneficiary, (ii) with respect to all property
insurance, subject to availability on commercially reasonable terms, provide for
deductibles not to exceed $250,000, other than with respect to (a) flood,
freeze, windstorm and earthquake perils for which deductibles shall not exceed
the greater of $500,000 or 5% of values at risk per location involved in loss
and (b) boiler and machinery coverage for which deductibles shall not exceed the
greater of $500,000 or five times 100% of the daily time element value, contain
a "Replacement Cost Endorsement" without any deduction made for depreciation and
with no co-insurance penalty (or attaching an agreed amount endorsement
satisfactory to Beneficiary in its reasonable discretion), with loss payable
solely to Beneficiary (modified, if necessary and to the extent available under
such policy, to provide that proceeds in the amount of replacement cost may be
retained by Beneficiary without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Beneficiary in its reasonable discretion and be written by
insurance companies having an A.M. Best Company, Inc. rating of A- or higher and
a financial size category of not less than VII, or otherwise as approved by
Beneficiary in its reasonable discretion and (iii) contain a "manuscript"
endorsement providing that Grantor may not unilaterally cancel such policy
without Beneficiary's prior written consent. Liability insurance policies shall
name Beneficiary as an additional insured and contain a waiver of subrogation
against Beneficiary; all such policies shall indemnify and hold Beneficiary
harmless from all liability claims occurring on, in or about the Premises and
the adjoining streets, sidewalks and passageways, subject to standard policy
terms, conditions and exclusions. The amounts of each insurance policy and the
form of each such policy shall at all times be satisfactory to Beneficiary in
its reasonable discretion. Each policy shall expressly provide that any proceeds
which are payable to Beneficiary shall be paid by check payable to the order of
Beneficiary only and requiring the endorsement of Beneficiary only. If any
required insurance shall expire, be withdrawn, become void by breach of any
condition thereof by Grantor or by any lessee of any part of the Trust Property
or become void or unsafe by reason of the failure or impairment of the capital
of any insurer, Grantor shall immediately obtain new or additional insurance
satisfactory to Beneficiary in its reasonable discretion. Grantor shall not take
out any separate or additional insurance which is contributing in the event of
loss unless it is properly endorsed and otherwise satisfactory to Beneficiary in
all respects in its reasonable discretion.
(b) Grantor shall deliver to Beneficiary an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Beneficiary in its reasonable discretion, together with a copy of
the declaration page for each such policy. Grantor shall (i) pay as they become
due all premiums for such insurance, (ii) not later than seven days prior to the
expiration of each policy to be furnished pursuant to the provisions of
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this Section , deliver a renewed policy or policies, or certificates of
insurance acceptable to Beneficiary, in its reasonable discretion, or duplicate
original or originals thereof. Upon the reasonable request of Beneficiary,
Grantor shall cause its insurance underwriter or broker to certify to
Beneficiary in writing that all the requirements of this Deed of Trust governing
insurance have been satisfied.
(c) If Grantor is in default of its obligations to insure or
deliver any such policy or policies, or certificates of insurance acceptable to
Beneficiary, in its reasonable discretion, then Beneficiary, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Grantor shall pay to Beneficiary on demand such
premium or premiums so paid by Beneficiary with interest from the time of
payment at the Default Rate and the same shall be deemed to be secured by this
Deed of Trust and shall be collectible in the same manner as the Indebtedness
secured by this Deed of Trust.
(d) Grantor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12 months
from the date of this Deed of Trust and each successive 12 month period to occur
thereafter) by using the Xxxxxx & Swift Building Cost Index to determine whether
there shall have been an increase in the replacement value since the most recent
adjustment and, if there shall have been such an increase, the amount of
insurance required shall be adjusted accordingly.
(e) Grantor promptly shall in all material respects comply
with and conform to (i) all provisions of each such insurance policy, and (ii)
all requirements of the insurers applicable to Grantor or to any of the Trust
Property or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration or repair of any of the Trust Property. Grantor shall
not use or permit the use of the Trust Property in any manner which would permit
any insurer to cancel any insurance policy or void coverage required to be
maintained by this Deed of Trust.
(f) (i) If the Trust Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Grantor for any
personal injury, bodily injury or property damage incurred on or about
the Premises, Grantor shall promptly give notice thereof to
Beneficiary.
(ii) If the Trust Property is damaged by fire or other
casualty and the cost to repair such damage is less than $1,000,000,
then provided that no Event of Default shall have occurred and be
continuing, Grantor shall have the right to adjust such loss, and the
insurance proceeds relating to such loss may be paid over to Grantor;
provided that Grantor shall, promptly after any such damage, repair
such damage to the extent required by subsection 7.5 of the Senior
Secured Credit Agreement regardless of whether any insurance proceeds
have been received or whether such proceeds, if received, are
sufficient to pay for the costs of repair.
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(iii) If the Trust Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds the limit in
Section 5(f)(ii) above, or if an Event of Default shall have occurred
and be continuing, then Grantor authorizes and empowers Beneficiary, at
Beneficiary's option and in Beneficiary's reasonable discretion, as
attorney-in-fact for Grantor, to make proof of loss, to adjust and
compromise any claim under any insurance policy, to appear in and
prosecute any action arising from any policy, to collect and receive
insurance proceeds and to deduct therefrom Beneficiary's reasonable
expenses incurred in the collection process. Each insurance company
concerned is hereby authorized and directed to make payment for such
loss directly to Beneficiary. Beneficiary shall have the right to
require Grantor to repair or restore the Trust Property to the extent
required by subsection 7.5 of the Senior Secured Credit Agreement, and
Grantor hereby designates Beneficiary as its attorney-in-fact for the
purpose of making any election required or permitted under any
insurance policy relating to such repair or restoration. The insurance
proceeds or any part thereof received by Beneficiary may be applied by
Beneficiary toward reimbursement of all reasonable costs and expenses
of Beneficiary in collecting such proceeds, and the balance, at
Beneficiary's option in its sole and absolute discretion, to the
principal (to the installments in inverse order of maturity, if payable
in installments) and interest due or to become due under the Notes, the
Senior Secured Credit Agreement or the other Loan Documents, to fulfill
any other Obligation of Grantor, to the restoration or repair of the
property damaged, or released to Grantor. Application by Beneficiary of
any insurance proceeds toward the last maturing installments of
principal and interest due or to become due on the Loans shall not
excuse Grantor from making any regularly scheduled payments due
thereunder, nor shall such application extend or reduce the amount of
such payments. In the event Beneficiary elects to release such proceeds
to Grantor, Grantor shall be obligated to use such proceeds to restore
or repair the Trust Property to the extent required by subsection 7.5
of the Senior Secured Credit Agreement.
(g) In the event of foreclosure of this Deed of Trust or other
transfer of title to the Trust Property in extinguishment of the Indebtedness,
all right, title and interest of Grantor in and to any insurance policies then
in force, to the extent assignable or transferable, shall pass to the purchaser
or grantee and Grantor hereby appoints Beneficiary its attorney-in-fact, in
Grantor's name, to assign and transfer all such policies and proceeds to such
purchaser or grantee.
(h) Upon written notice to Grantor, Beneficiary, during the
continuance of an Event of Default, shall be entitled to require Grantor to pay
monthly in advance to Beneficiary the equivalent of 1/12th of the estimated
annual premiums due on such insurance. Beneficiary may commingle such funds with
its own funds but Grantor shall be entitled to interest thereon at a rate
mutually agreed upon by Grantor and Beneficiary.
(i) Grantor may maintain insurance required under this Deed of
Trust by means of one or more blanket insurance policies maintained by Grantor;
provided, however,
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that (A) any such policy shall specify, or Grantor shall furnish to Beneficiary
a written statement from the insurer so specifying, the maximum amount of the
total insurance afforded by such blanket policy that is allocated to the
Premises and the other Trust Property and any sublimits and aggregates in such
blanket policy applicable to the Premises and the other Trust Property, (B) each
such blanket policy shall include an endorsement providing that, in the event of
a loss resulting from an insured peril, insurance proceeds shall be allocated to
the Trust Property in an amount equal to the coverages required to be maintained
by Grantor as provided above (subject to applicable sublimits and aggregates)
and (C) the protection afforded under any such blanket policy shall be no less
than that which would have been afforded under a separate policy or policies
relating only to the Trust Property (subject to applicable sublimits and
aggregates).
6. Restrictions on Liens and Encumbrances. Except for the lien
of this Deed of Trust and the Permitted Exceptions and except as otherwise
permitted pursuant to the terms of the Senior Secured Credit Agreement, Grantor
shall not further mortgage, nor otherwise encumber the Trust Property nor create
or suffer to exist any lien, charge or encumbrance on the Trust Property, or any
part thereof, whether superior or subordinate to the lien of this Deed of Trust
and whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as may
be otherwise expressly permitted under the Senior Secured Credit Agreement,
Grantor shall not sell, transfer, convey or assign all or any portion of, or any
interest in, the Trust Property.
8. Maintenance; No Alteration; Inspection; Utilities. (a)
Grantor shall maintain or cause to be maintained all the Improvements in good
condition and repair and shall not commit or suffer any waste of the
Improvements. To the extent required under subsection 7.5 of the Senior Secured
Credit Agreement, Grantor shall repair, restore, replace or rebuild promptly any
part of the Premises which may be damaged or destroyed by any casualty
whatsoever to a condition substantially equivalent to its condition prior to the
damage or destruction. Except as permitted by the Senior Secured Credit
Agreement, the Improvements shall not be demolished or materially altered, nor
any material additions built, without the prior written consent of Beneficiary,
provided that Grantor may make alterations or additions without the consent of
Beneficiary that do not materially reduce the value of the Trust Property.
(b) Beneficiary and any persons authorized by Beneficiary
shall, upon reasonable notice and at any reasonable time, have the right to
enter and inspect the Premises and the right to inspect all work done, labor
performed and materials furnished in and about the Improvements and the right to
inspect and make copies, to the extent reasonable, of all books, contracts and
records of Grantor relating to the Trust Property.
(c) Except as permitted under subsection 7.3 of the Senior
Secured Credit Agreement, Grantor shall pay or cause to be paid prior to
delinquency, all utility charges which are incurred for gas, electricity, water
or sewer services furnished to the Premises and
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all other assessments or charges of a similar nature, whether public or private,
affecting the Premises or any portion thereof, whether or not such assessments
or charges are liens thereon.
9. Condemnation/Eminent Domain. Promptly upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Trust Property, or any portion thereof, Grantor will notify Beneficiary of the
pendency of such proceedings. Grantor authorizes Beneficiary, at Beneficiary's
option and in Beneficiary's reasonable discretion, as attorney-in-fact for
Grantor, to commence, appear in and prosecute, in Beneficiary's or Grantor's
name, any action or proceeding relating to any condemnation of the Trust
Property, or any portion thereof, and to settle or compromise any claim in
connection with such condemnation upon the occurrence and during the continuance
of an Event of Default. If Beneficiary elects not to participate in such
condemnation proceeding, then Grantor shall, at its expense, diligently
prosecute any such proceeding and shall consult with Beneficiary, its attorneys
and experts and cooperate with them in any defense of any such proceedings. All
awards and proceeds of condemnation shall be applied in the same manner as
insurance proceeds, and to the extent such awards and proceeds exceed $1,000,000
and no Event of Default shall have occurred and be continuing, such awards and
proceeds shall be assigned to Beneficiary to be applied in the same manner as
insurance proceeds, as provided above in subsection 5(f)(iii) above, and Grantor
agrees to execute any such assignments of all such awards as Beneficiary may
request.
10. Restoration. If Beneficiary elects or is required
hereunder to release funds to Grantor for restoration of any of the Trust
Property, then such restoration shall be performed in accordance with such
conditions as Beneficiary shall impose in its reasonable discretion, and as are
customarily imposed by construction lenders.
11. Leases. (a) Grantor shall not (i) execute an assignment or
pledge of any Lease relating to all or any portion of the Trust Property other
than in favor of Beneficiary, or (ii) without the prior written consent of
Beneficiary, which consent shall not be unreasonably withheld or delayed,
execute or permit to exist any Lease of any of the Trust Property, except for
Permitted Exceptions and except as may be otherwise expressly permitted under
the Senior Secured Credit Agreement.
(b) As to any Lease consented to by Beneficiary under
subsection 11(a) above, Grantor shall:
(i) promptly perform in all material respects all of the
provisions of the Lease on the part of the lessor thereunder to be
performed;
(ii) promptly enforce all of the material provisions of the
Lease on the part of the lessee thereunder to be performed;
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(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Grantor as lessor or of the lessee thereunder;
(iv) exercise, within 5 business days after a reasonable
request by Beneficiary, any right to request from the lessee a
certificate with respect to the status thereof;
(v) promptly deliver to Beneficiary copies of any notices of
default which Grantor may at any time forward to or receive from the
lessee;
(vi) promptly deliver to Beneficiary a fully executed
counterpart of the Lease; and
(vii) promptly deliver to Beneficiary, upon Beneficiary's
reasonable request, if permitted under such Lease, an assignment of the
Grantor's interest under such Lease.
(c) Grantor shall deliver to Beneficiary, within 10 business
days after a reasonable request by Beneficiary, a written statement, certified
by Grantor as being true, correct and complete, containing the names of all
lessees and other occupants of the Trust Property, the terms of all Leases and
the spaces occupied and rentals payable thereunder, and a list of all Leases
which are then in default, including the nature and magnitude of the default;
such statement shall be accompanied by such other information as Beneficiary may
reasonably request.
(d) All Leases entered into by Grantor after the date hereof,
if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Deed of Trust
unless Beneficiary shall otherwise elect in writing.
(e) In the event of the enforcement by Beneficiary of any
remedy under this Deed of Trust, the lessee under each Lease shall, if requested
by Beneficiary or any other person succeeding to the interest of Beneficiary as
a result of such enforcement, and if provided, at such lessee's request, with a
nondisturbance agreement from Beneficiary or such person, attorn to Beneficiary
or to such person and shall recognize Beneficiary or such successor in interest
as lessor under the Lease without change in the provisions thereof; provided
however, that Beneficiary or such successor in interest shall not be: (i) bound
by any payment of an installment of rent or additional rent which may have been
made more than 30 days before the due date of such installment; (ii) bound by
any amendment or modification to the Lease made without the consent of
Beneficiary or such successor in interest; (iii) liable for any previous act or
omission of Grantor (or its predecessors in interest); (iv) responsible for any
monies owing by Grantor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Grantor (or its predecessors in interest); (v) bound by any covenant to
undertake or complete any construction of the Premises or any portion thereof;
or (vi) obligated to make any payment to such lessee other than any security
deposit actually delivered to Beneficiary or such successor in interest. Each
lessee or other occupant, upon request by Beneficiary or such successor in
interest, shall
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execute and deliver an instrument or instruments confirming such attornment. In
addition, Grantor agrees that each Lease entered into after the date of this
Deed of Trust shall include language to the effect of subsections (d)-(e) of
this Section and language to the effect that if any act or omission of Grantor
would give any lessee under such Lease the right, immediately or after lapse of
a period of time, to cancel or terminate such Lease, or to xxxxx or offset
against the payment of rent or to claim a partial or total eviction, such lessee
shall not exercise such right until it has given written notice of such act or
omission to Beneficiary and until a reasonable period for remedying such act or
omission shall have elapsed following the giving of such notice without a remedy
being effected; provided that the provisions of such subsections shall be
self-operative and any failure of any Lease to include such language shall not
impair the binding effect of such provisions on any lessee under such Lease.
12. Further Assurances/Estoppel Certificates. To further
assure Beneficiary's and Trustee's rights under this Deed of Trust, Grantor
agrees upon demand of Beneficiary or Trustee to do any act or execute any
additional documents (including, but not limited to, security agreements on any
personalty included or to be included in the Trust Property and a separate
assignment of each Lease in recordable form) as may be reasonably required by
Beneficiary or Trustee to confirm the rights or benefits conferred on
Beneficiary or Trustee by this Deed of Trust.
13. Beneficiary's Right to Perform. If Grantor fails to
perform any of the covenants or agreements of Grantor, Beneficiary or Trustee,
without waiving or releasing Grantor from any obligation or default under this
Deed of Trust, may, at any time (but shall be under no obligation to) pay or
perform the same, and the amount or cost thereof, with interest at the Default
Rate, shall immediately be due from Grantor to Beneficiary or Trustee (as the
case may be) and the same shall be secured by this Deed of Trust and shall be an
encumbrance on the Trust Property prior to any right, title to, interest in or
claim upon the Trust Property attaching subsequent to the date of this Deed of
Trust. No payment or advance of money by Beneficiary or Trustee under this
Section shall be deemed or construed to cure Grantor's default or waive any
right or remedy of Beneficiary or Trustee.
14. Events of Default. The occurrence of an Event of Default
under the Senior Secured Credit Agreement shall constitute an Event of Default
hereunder.
15. Remedies. (a) Upon the occurrence of any Event of Default,
in addition to any other rights and remedies Beneficiary may have pursuant to
the Loan Documents, or as provided by law, and without limitation, the
Indebtedness and all other amounts payable with respect to the Loans, the
Letters of Credit, the Senior Secured Credit Agreement, this Deed of Trust and
the other Security Documents shall become due and payable as provided in the
Senior Secured Credit Agreement. Except as expressly provided above in this
Section , presentment, demand, protest and all other notices of any kind are
hereby expressly waived. In addition, upon the occurrence of any Event of
Default, Beneficiary may immediately take such action, without notice or demand,
as it deems advisable to protect and enforce its rights against Grantor and in
and to the Trust Property, including, but not limited to, the following
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actions, each of which may be pursued concurrently or otherwise, at such time
and in such manner as Beneficiary may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of Beneficiary:
(i) Enter upon and take possession of the Trust Property or
any part thereof, with or without legal action, and do any acts which it deems
necessary or desirable to preserve the value, marketability or rentability of
the Trust Property, or any part thereof or the value of this Deed of Trust
(including, without limitation, entering into new leases of all or any part of
the Trust Property) and, with or without taking possession of the Trust
Property, xxx for or otherwise collect the rents, issues and profits thereof,
including those past due and unpaid, and apply the same, less costs and expenses
of operation and collection including reasonable attorneys' fees, upon the
Indebtedness, all in such order as Beneficiary may determine. The entering upon
and taking possession of the Trust Property, the collection of such rents,
issues and profits and the application thereof as aforesaid, shall not cure or
waive any default or notice of default hereunder or invalidate any act done in
response to such default or pursuant to such notice of default and,
notwithstanding the continuance in possession of the Trust Property or the
collection, receipt and application of rents, issues or profits, Beneficiary
shall be entitled to exercise every right provided for in any of the Loan
Documents or by law.
(ii) Bring an action in any court of competent jurisdiction to
foreclose this Deed of Trust or to enforce any of the covenants, terms or
conditions hereof and Beneficiary shall have the right to specific performance,
injunction and any other equitable right or remedy as though other remedies were
not provided in this Deed of Trust.
(iii) Elect to cause the Trust Property or any part thereof to
be sold as follows, Grantor hereby expressly waiving any right which it may have
to direct the order in which any of the Trust Property may be sold:
(a) Beneficiary may proceed as if all of the Trust Property
were real property, in accordance with subparagraph (c) below, or
Beneficiary may elect to treat any of the Trust Property which consists
of personal property, in accordance with the Section of this Deed of
Trust entitled "Security Agreement Under Uniform Commercial Code",
separate and apart from the sale of real property, the remainder of the
Trust Property being treated as real property;
(b) Beneficiary may cause any such sale or other disposition
to be conducted immediately following the expiration of any grace
period, if any, herein provided or Beneficiary may delay any such sale
or other disposition for such period of time as Beneficiary deems to be
in its best interest. Should Beneficiary desire that more than one such
sale or other disposition be conducted, Beneficiary may, at its option,
cause the same to be conducted simultaneously, or successively on the
same day, or at such different days or times and in such order as
Beneficiary may deem to be in its best interest;
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(c) Should Beneficiary elect to sell the Trust Property upon
which Beneficiary elects to proceed under the laws governing
foreclosure of or sales pursuant to Deeds of Trust, Beneficiary or
Trustee shall give such notice of default and election to sell as may
then be required by law. Thereafter, upon the expiration of such time
and the giving of such notice of sale as may then be required by law,
Trustee, at the time and place specified by the notice of sale, shall
sell such Trust Property, or any portion thereof specified by
Beneficiary, at public auction to the highest bidder for cash in lawful
money of the United States, subject, however, to the provisions of the
Section of this Deed of Trust entitled "Right of Beneficiary to Credit
Sale". Trustee may, and upon request of Beneficiary shall, from time to
time, postpone the sale by public announcement thereof at the time and
place noticed therefor. If the Trust Property consists of several lots
or parcels, Beneficiary may elect to sell the Trust Property either as
a whole or in separate lots or parcels. If Beneficiary elects to sell
in separate lots or parcels, Beneficiary may designate the order in
which such lots or parcels shall be offered for sale or sold. Any
person, including Grantor, Trustee or Beneficiary, may purchase at the
sale. Upon any sale, Trustee shall execute and deliver to the purchaser
or purchasers a deed or deeds conveying the property so sold, but
without any covenant or warranty whatsoever, express or implied,
whereupon such purchaser or purchasers shall be let into immediate
possession;
(d) In the event of a sale or other disposition of any such
property, or any part thereof, and the execution of a deed or other
conveyance pursuant thereto, the recitals therein of facts, such as an
Event of Default, the giving of notice of default and notice of sale,
demand that such sale should be made, postponement of sale, terms of
sale, sale, purchase, payments of purchase money, and any other fact
affecting the regularity or validity of such sale or disposition shall
be conclusive proof of the truth of such facts; and any such deed or
conveyance shall be conclusive against all persons as to such facts
recited therein;
(e) Beneficiary and/or Trustee shall apply the proceeds of any
sale or disposition hereunder in the order as provided in the Section
of this Deed of Trust entitled "Sale of the Properties; Application of
Proceeds"; and
(iv) Exercise all other rights and remedies provided herein, in the
other Loan Documents or otherwise available at law or equity.
16. Sale of the Properties; Application of Proceeds. (a)
Subject to the requirements of applicable law, the proceeds or avails of any
foreclosure sale and all moneys received by Beneficiary pursuant to any right
given or action taken under the provisions of this Deed of Trust shall be
applied as follows:
First: To the payment of the costs and expenses of any such
sale or other enforcement proceedings in accordance with the terms
hereof and of any judicial proceeding wherein the same may be made, and
in addition thereto,
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reasonable compensation to Beneficiary, its agents and counsel, and all
actual out of pocket expenses, advances, liabilities and sums made or
furnished or incurred by Beneficiary or the holder of this Deed of
Trust under this Deed of Trust and the other Loan Documents, together
with interest at the Default Rate (or such lesser amount as may be the
maximum amount permitted by law), and all taxes, assessments or other
charges, except any taxes, assessments or other charges subject to
which the Trust Property shall have been sold;
Second: To the payment of the aggregate amount when due, owing
and unpaid (whether by acceleration or otherwise) upon the Indebtedness
for principal and interest; and in case such proceeds shall be
insufficient to pay in full the whole aggregate amount so due and
unpaid, then first, to the payment of all amounts of interest at the
time due and payable on the Indebtedness, without preference or
priority of any installment of interest over any other installment of
interest, and with payment of interest on the Notes and other
instruments evidencing the Indebtedness being applied pro rata based on
the amount of interest then due pursuant to the Notes, the Senior
Secured Credit Agreement and other instrument evidencing the
Indebtedness, and second, to the payment of all amounts of principal,
with payment of principal due under the Notes, the Senior Secured
Credit Agreement and other instruments evidencing the Indebtedness
being applied pro rata based on the amount of principal due under the
Notes, the Senior Secured Credit Agreement and other instrument
evidencing the Indebtedness; all such payments of principal and
interest to be made ratably to the holders entitled thereto.
Third: To the payment of any other sums required to be paid by
Grantor pursuant to any provision of this Deed of Trust, or any other
Loan Document.
Fourth: To the payment of the surplus, if any, to whomsoever
may be lawfully entitled to receive the same.
17. Trustee's Powers and Liabilities.
(a) Powers of Trustee. At any time or from time to time,
without liability therefor and without notice, upon the written request of
Beneficiary and presentation of the Notes and the other instruments evidencing
the indebtedness and this Deed of Trust for endorsement, without affecting the
personal liability of any person for the payment of the indebtedness secured
hereby, and without affecting the lien of this Deed of Trust upon the Trust
Property for the full amount of all amounts secured hereby, Trustee may (i)
reconvey all or any part of the Trust Property, (ii) consent to the making of
any map or plat thereof, (iii) join in granting any easement thereon or in
creating any covenants or conditions restricting use or occupancy thereof, or
(iv) join in any extension agreement or in any agreement subordinating the lien
or charge hereof.
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(b) Reconveyance. Upon written request of Beneficiary stating
that all sums secured hereby have been paid, and upon surrender of this Deed of
Trust and the Notes and the other instruments evidencing the Indebtedness to
Trustee for cancellation and retention, and upon payment of its fees, Trustee
shall reconvey, without warranty, the property then held hereunder. The recitals
in any such reconveyance of any matters or facts shall be conclusive proof of
the truth thereof. The grantee in such reconveyance may be described as "the
person or persons legally entitled thereto."
(c) Trustee Notice. Trustee is not obligated to notify any
party hereto of any pending sale under any other deed of trust or of any action
or proceeding in which Grantor, Beneficiary or Trustee shall be a party, unless
brought by Trustee.
(d) Compensation and Indemnification of Trustee. Trustee shall
be entitled to reasonable compensation for all services rendered or expenses
incurred in the administration or execution of the trusts hereby created and
Grantor hereby agrees to pay the same. Trustee shall be indemnified, held
harmless and reimbursed by Grantor for any liability, damage or expense,
including reasonable attorneys' fees and amounts paid in settlement, which
Trustee may incur or sustain in connection with this Deed of Trust or in the
doing of any act which Trustee is required or permitted to do by the terms
hereof or by law.
(e) Substitute Trustees. Beneficiary may substitute the
Trustee hereunder in any manner now or hereafter provided by law, or in lieu
thereof, Beneficiary may from time to time, by an instrument in writing,
substitute a successor or successors to any Trustee named herein or acting
hereunder, which instrument, executed and acknowledged by Beneficiary and
recorded in the office of the recorder of the county or counties where the Trust
Property is situated, shall be conclusive proof of proper substitution of such
successor Trustee or Trustees, who shall thereupon, and without conveyance from
the predecessor Trustee, succeed to all its title, estate, rights, powers and
duties. Such instrument must contain the name of the original Grantor, Trustee
and Beneficiary hereunder, the book and page where this Deed of Trust is
recorded, the legal description of the Land and the name and address of the new
Trustee.
(f) Acceptance by Trustee. The acceptance by Trustee of this
trust shall be evidenced when this Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law.
(g) Trust Irrevocable; No Offset. The trust created hereby is
irrevocable by Grantor. No offset or claim that Grantor now or may in the future
have against Beneficiary shall relieve Grantor from paying installments or
performing any other obligation herein or secured hereby.
(h) Corrections. Grantor will, upon request of Beneficiary or
Trustee, promptly correct any defect, error or omission which may be discovered
in the contents of this Deed of Trust or in the execution or acknowledgement
hereof, and will execute, acknowledge and deliver such further instruments and
do such further acts as may be necessary or as may be
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reasonably requested by Beneficiary or Trustee to carry out more effectively the
purposes of this Deed of Trust, to subject to the lien and security interests
hereby created any of Grantor's properties, rights or interest covered or
intended to be covered hereby, and to perfect and maintain such lien and
security interest.
18. Request for Notice. In accordance with California Civil
Code Section 2924b, a request is hereby made by Grantor that a copy of any
notice of default and a copy of any notice of sale under this Deed of Trust be
mailed to Grantor at Grantor's address set forth in the first paragraph of this
Deed of Trust.
19. Successor Grantor. In the event ownership of the Trust
Property or any portion thereof becomes vested in a person other than the
Grantor herein named, Beneficiary may, without notice to the Grantor herein
named, whether or not Beneficiary has given written consent to such change in
ownership, deal with such successor or successors in interest with reference to
this Deed of Trust and the Indebtedness and the Obligations, and in the same
manner as with the Grantor herein named, without in any way vitiating or
discharging Grantor's liability hereunder or under the Indebtedness and the
Obligations.
20. Right of Beneficiary to Credit Sale. Upon the occurrence
of any sale made under this Deed of Trust, whether made under the power of sale
or by virtue of judicial proceedings or of a judgment or decree of foreclosure
and sale, Beneficiary may bid for and acquire the Trust Property or any part
thereof. In lieu of paying cash therefor, Beneficiary may make settlement for
the purchase price by crediting upon the Indebtedness or other sums secured by
this Deed of Trust the net sales price after deducting therefrom the expenses of
sale and the cost of the action and any other sums which Beneficiary is
authorized to deduct under this Deed of Trust. In such event, this Deed of
Trust, the Notes and other instruments evidencing the Indebtedness and any and
all documents evidencing expenditures secured hereby may be presented to the
person or persons conducting the sale in order that the amount so used or
applied may be credited upon the Indebtedness as having been paid.
21. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Beneficiary as a matter of right and without notice
to Grantor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Trust Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Grantor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Trust Property, without
requiring the posting of a surety bond and without reference to the adequacy or
inadequacy of the value of the Trust Property or the solvency or insolvency of
Grantor or any other party obligated for payment of all or any part of the
Indebtedness, and whether or not waste has occurred with respect to the Trust
Property. Grantor hereby irrevocably consents to such appointment and waives
notice of any application therefor (except as may be required by law). Any such
receiver or receivers shall have all the usual powers and duties of receivers in
like or similar cases and all the powers and duties of Beneficiary in case of
entry as provided in this Deed of Trust, including, without limitation and to
the extent permitted by law, the right to enter into leases of all or any
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part of the Trust Property, and shall continue as such and exercise all such
powers until the date of confirmation of sale of the Trust Property unless such
receivership is sooner terminated.
22. Extension, Release, etc. (a) Without affecting the
encumbrance or charge of this Deed of Trust upon any portion of the Trust
Property not then or theretofore released as security for the full amount of the
Indebtedness, Beneficiary may, from time to time and without notice, agree to
(i) release any person liable for the Indebtedness, (ii) extend the maturity or
alter any of the terms of the Indebtedness or any guaranty thereof, (iii) grant
other indulgences, (iv) release or reconvey, or cause to be released or
reconveyed at any time at Beneficiary's option any parcel, portion or all of the
Trust Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Deed of Trust shall secure
less than all of the principal amount of the Indebtedness, it is expressly
agreed that any repayments of the principal amount of the Indebtedness shall not
reduce the amount of the encumbrance of this Deed of Trust until the encumbrance
amount shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Beneficiary and no levy of
an execution under any judgment upon the Trust Property or upon any other
property of Grantor shall affect the encumbrance of this Deed of Trust or any
liens, rights, powers or remedies of Beneficiary or Trustee hereunder, and such
liens, rights, powers and remedies shall continue unimpaired.
(c) If Beneficiary shall have the right to foreclose this Deed
of Trust or to direct the Trustee to exercise its power of sale, Grantor
authorizes Beneficiary at its option to foreclose the lien of this Deed of Trust
(or direct the Trustee to sell the Trust Property, as the case may be) subject
to the rights of any tenants of the Trust Property. The failure to make any such
tenants parties defendant to any such foreclosure proceeding and to foreclose
their rights, or to provide notice to such tenants as required in any statutory
procedure governing a sale of the Trust Property by Trustee, or to terminate
such tenant's rights in such sale will not be asserted by Grantor as a defense
to any proceeding instituted by Beneficiary to collect the Indebtedness or to
foreclose this Deed of Trust.
(d) Unless expressly provided otherwise, in the event that
Beneficiary's interest in this Deed of Trust and title to the Trust Property or
any estate therein shall become vested in the same person or entity, this Deed
of Trust shall not merge in such title but shall continue as a valid charge on
the Trust Property for the amount secured hereby.
23. Security Agreement under Uniform Commercial Code. (a) It
is the intention of the parties hereto that this Deed of Trust shall constitute
a Security Agreement within the meaning of the Uniform Commercial Code (the
"CODE") of the State in which the Trust Property is located, and Grantor hereby
grants a security interest in all of the personal property of Grantor described
in the Granting Clauses of this Deed of Trust. If an Event of Default shall
occur under this Deed of Trust, then in addition to having any other right or
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remedy available at law or in equity, Beneficiary shall have the option of
either (i) proceeding under the Code and exercising such rights and remedies as
may be provided to a secured party by the Code with respect to all or any
portion of the Trust Property which is personal property (including, without
limitation, taking possession of and selling such property) or (ii) treating
such property as real property and proceeding with respect to both the real and
personal property constituting the Trust Property in accordance with
Beneficiary's rights, powers and remedies with respect to the real property (in
which event the default provisions of the Code shall not apply). If Beneficiary
shall elect to proceed under the Code, then five days' notice of sale of the
personal property shall be deemed reasonable notice and the reasonable expenses
of retaking, holding, preparing for sale, selling and the like incurred by
Beneficiary shall include, but not be limited to, reasonable attorneys' fees and
legal expenses. At Beneficiary's request, during the continuance of an Event of
Default, Grantor shall assemble the personal property and make it available to
Beneficiary at a place designated by Beneficiary which is reasonably convenient
to both parties.
(b) Grantor and Beneficiary agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Deed of
Trust upon recording or registration in the real estate records of the proper
office shall constitute a financing statement filed as a "fixture filing" within
the meaning of Sections 9-313 and 9-402 of the Code; (iii) Grantor is the record
owner of the Real Estate; and (iv) the addresses of Grantor and Beneficiary are
as set forth on the first page of this Deed of Trust.
(c) Grantor, upon request by Beneficiary from time to time,
shall execute, acknowledge and deliver to Beneficiary one or more separate
security agreements, in form satisfactory to Beneficiary in its reasonable
discretion, covering all or any part of the Trust Property and will further
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any financing statement, affidavit, continuation statement or
certificate or other document as Beneficiary may request in order to perfect,
preserve, maintain, continue or extend the security interest under and the
priority of this Deed of Trust and such security instrument. Grantor further
agrees to pay to Beneficiary on demand all reasonable costs and expenses
incurred by Beneficiary in connection with the preparation, execution,
recording, filing and re-filing of any such document and all reasonable costs
and expenses of any record searches for financing statements Beneficiary shall
reasonably require. If Grantor shall fail to furnish any financing or
continuation statement within 10 days after request by Beneficiary, then
pursuant to the provisions of the Code, Grantor hereby authorizes Beneficiary,
without the signature of Grantor, to execute and file any such financing and
continuation statements. The filing of any financing or continuation statements
in the records relating to personal property or chattels shall not be construed
as in any way impairing the right of Beneficiary to proceed against any personal
property encumbered by this Deed of Trust as real property, as set forth above.
24. Assignment of Rents. Grantor hereby absolutely and
unconditionally assigns, transfers, conveys and sets over to Beneficiary, the
Rents as further security for the
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payment of the Indebtedness and performance of the Obligations, and Grantor
grants to Beneficiary the right to enter the Trust Property for the purpose of
collecting the same and to let the Trust Property or any part thereof and to
apply the Rents on account of the Indebtedness. The foregoing assignment and
grant is present and absolute and shall continue in effect until the
Indebtedness is paid in full, but Beneficiary and Trustee hereby waive the right
to enter the Trust Property for the purpose of collecting the Rents, letting the
Trust Property or any part thereof or applying the Rents and Grantor shall be
entitled to collect, receive, use and retain the Rents until the occurrence of
an Event of Default under this Deed of Trust; such right of Grantor to collect,
receive, use and retain the Rents may be revoked by Beneficiary upon the
occurrence of any Event of Default under this Deed of Trust by giving not less
than five days' written notice of such revocation to Grantor; in the event such
notice is given, Grantor shall pay over to Beneficiary, or to any receiver
appointed to collect the Rents, any lease security deposits, and shall pay
monthly in advance to Beneficiary, or to any such receiver, the fair and
reasonable rental value as determined by Beneficiary for the use and occupancy
of the Trust Property or of such part thereof as may be in the possession of
Grantor or any affiliate of Grantor, and upon default in any such payment
Grantor and any such affiliate will vacate and surrender the possession of the
Trust Property to Beneficiary or to such receiver, and in default thereof may be
evicted by summary proceedings or otherwise. Grantor shall not accept
prepayments of installments of Rent to become due for a period of more than one
month in advance (except for security deposits and estimated payments of
percentage rent, if any).
25. Trust Funds. All lease security deposits of the Real
Estate shall be treated as trust funds not to be commingled with any other funds
of Grantor. Within 10 days after request by Beneficiary, Grantor shall furnish
Beneficiary satisfactory evidence of compliance with this subsection, together
with a statement of all lease security deposits by lessees and copies of all
Leases not previously delivered to Beneficiary under which such security
deposits are held, which statement shall be certified by Grantor.
26. Additional Rights. The holder of any subordinate lien or
subordinate deed of trust on the Trust Property shall have no right to terminate
any Lease whether or not such Lease is subordinate to this Deed of Trust nor
shall any holder of any subordinate lien or subordinate deed of trust join any
tenant under any Lease in any trustee's sale or action to foreclose the lien or
modify, interfere with, disturb or terminate the rights of any tenant under any
Lease. By recordation of this Deed of Trust all subordinate lienholders and the
trustees and beneficiaries under subordinate deeds of trust are subject to and
notified of this provision, and any action taken by any such lienholder or
trustee or beneficiary contrary to this provision shall be null and void. Upon
the occurrence of any Event of Default, Beneficiary may, in its sole discretion
and without regard to the adequacy of its security under this Deed of Trust,
apply all or any part of any amounts on deposit with Beneficiary under this Deed
of Trust against all or any part of the Indebtedness. Any such application shall
not be construed to cure or waive any Default or Event of Default or invalidate
any act taken by Beneficiary on account of such Default or Event of Default.
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27. Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting from
the value of the Premises for the purposes of taxation any lien or deed of trust
thereon, or changing in any way the laws for the taxation of mortgages or deeds
of trust or debts secured thereby for federal, state or local purposes, or the
manner of collection of any such taxes, and imposing a tax, either directly or
indirectly, on mortgages or deeds of trust or debts secured thereby, the holder
of this Deed of Trust shall have the right to declare the Indebtedness due on a
date to be specified by not less than 30 days' written notice to be given to
Grantor unless within such 30-day period Grantor shall assume as an Obligation
hereunder the payment of any tax so imposed until full payment of the
Indebtedness and such assumption shall be permitted by law.
28. Notices. All notices, requests, demands and other
communications hereunder shall be deemed to have been sufficiently given or
served when served in the same manner as set forth for notices in the Senior
Secured Credit Agreement. The Trustee's address for notices shall be the
Trustee's address given on the first page of this Deed of Trust.
29. No Oral Modification. This Deed of Trust may not be
changed or terminated orally. Any agreement made by Grantor and Beneficiary
after the date of this Deed of Trust relating to this Deed of Trust shall be
superior to the rights of the holder of any intervening or subordinate deed of
trust, lien or encumbrance. Trustee's execution of any written agreement between
Grantor and Beneficiary shall not be required for the effectiveness thereof as
between Grantor and Beneficiary.
30. Partial Invalidity. In the event any one or more of the
provisions contained in this Deed of Trust shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Deed of
Trust or in any provisions of the Indebtedness or Loan Documents, the
obligations of Grantor and of any other obligor under the Indebtedness or Loan
Documents shall be subject to the limitation that Beneficiary shall not charge,
take or receive, nor shall Grantor or any other obligor be obligated to pay to
Beneficiary, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Beneficiary.
31. Grantor's Waiver of Rights. To the fullest extent
permitted by law, Grantor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Trust Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Trust Property from attachment, levy or sale under execution or
exemption from civil process. To the full extent Grantor may do so, Grantor
agrees that Grantor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Deed of Trust before exercising any other remedy
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26
granted hereunder and Grantor, for Grantor and its successors and assigns, and
for any and all persons ever claiming any interest in the Trust Property, to the
extent permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the event
of exercise by Trustee or Beneficiary of the power of sale or other rights
hereby created.
32. Remedies Not Exclusive. Beneficiary and Trustee shall be
entitled to enforce payment of the Indebtedness and performance of the
Obligations and to exercise all rights and powers under this Deed of Trust or
under any of the other Loan Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the Indebtedness and
Obligations may now or hereafter be otherwise secured, whether by deed of trust,
mortgage, security agreement, pledge, lien, assignment or otherwise. Neither the
acceptance of this Deed of Trust nor its enforcement, shall prejudice or in any
manner affect Beneficiary's or Trustee's right to realize upon or enforce any
other security now or hereafter held by Beneficiary or Trustee, it being agreed
that Beneficiary and Trustee shall be entitled to enforce this Deed of Trust and
any other security now or hereafter held by Beneficiary or Trustee in such order
and manner as Beneficiary may determine in its absolute discretion. No remedy
herein conferred upon or reserved to Trustee or Beneficiary is intended to be
exclusive of any other remedy herein or by law provided or permitted, but each
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Beneficiary or Trustee or
to which either may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Beneficiary or Trustee, as the case may be. In no event shall Beneficiary or
Trustee, in the exercise of the remedies provided in this Deed of Trust
(including, without limitation, in connection with the assignment of Rents, or
the appointment of a receiver and the entry of such receiver on to all or any
part of the Trust Property), be deemed a "mortgagee in possession," and neither
Beneficiary nor Trustee shall in any way be made liable for any act, either of
commission or omission, in connection with the exercise of such remedies.
33. Multiple Security. If (a) the Premises shall consist of
one or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Deed of Trust, Beneficiary shall now or
hereafter hold or be the beneficiary of one or more additional mortgages, liens,
deeds of trust or other security (directly or indirectly) for the Indebtedness
upon other property in the State in which the Premises are located (whether or
not such property is owned by Grantor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Beneficiary may, at its election, commence or
consolidate in a single trustee's sale or foreclosure action all trustee's sale
or foreclosure proceedings against all such collateral securing the Indebtedness
(including the Trust Property), which action may be brought or consolidated in
the courts of, or sale conducted in, any county in which any of such collateral
is located. Grantor acknowledges that the right to maintain a consolidated
trustee's sale or foreclosure action is a specific inducement to Beneficiary to
extend the Indebtedness, and Grantor expressly and
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27
irrevocably waives any objections to the commencement or consolidation of the
foreclosure proceedings in a single action and any objections to the laying of
venue or based on the grounds of forum non conveniens which it may now or
hereafter have. Grantor further agrees that if Trustee or Beneficiary shall be
prosecuting one or more foreclosure or other proceedings against a portion of
the Trust Property or against any collateral other than the Trust Property,
which collateral directly or indirectly secures the Indebtedness, or if
Beneficiary shall have obtained a judgment of foreclosure and sale or similar
judgment against such collateral (or, in the case of a trustee's sale, shall
have met the statutory requirements therefor with respect to such collateral),
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Beneficiary
may commence or continue any trustee's sale or foreclosure proceedings and
exercise its other remedies granted in this Deed of Trust against all or any
part of the Trust Property and Grantor waives any objections to the commencement
or continuation of a foreclosure of this Deed of Trust or exercise of any other
remedies hereunder based on such other proceedings or judgments, and waives any
right to seek to dismiss, stay, remove, transfer or consolidate either any
action under this Deed of Trust or such other proceedings on such basis. The
commencement or continuation of proceedings to sell the Trust Property in a
trustee's sale, to foreclose this Deed of Trust or the exercise of any other
rights hereunder or the recovery of any judgment by Beneficiary or the
occurrence of any sale by the Trustee in any such proceedings shall not
prejudice, limit or preclude Beneficiary's right to commence or continue one or
more trustee's sales, foreclosure or other proceedings or obtain a judgment
against (or, in the case of a trustee's sale, to meet the statutory requirements
for, any such sale of) any other collateral (either in or outside the State in
which the Real Estate is located) which directly or indirectly secures the
Indebtedness, and Grantor expressly waives any objections to the commencement
of, continuation of, or entry of a judgment in such other sales or proceedings
or exercise of any remedies in such sales or proceedings based upon any action
or judgment connected to this Deed of Trust, and Grantor also waives any right
to seek to dismiss, stay, remove, transfer or consolidate either such other
sales or proceedings or any sale or action under this Deed of Trust on such
basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Beneficiary may, at its election, cause the sale of all
collateral which is the subject of a single trustee's sale or foreclosure action
at either a single sale or at multiple sales conducted simultaneously and take
such other measures as are appropriate in order to effect the agreement of the
parties to dispose of and administer all collateral securing the Indebtedness
(directly or indirectly) in the most economical and least time-consuming manner.
34. Successors and Assigns. All covenants of Grantor contained
in this Deed of Trust are imposed solely and exclusively for the benefit of
Beneficiary and Trustee and their respective successors and assigns, and no
other person or entity shall have standing to require compliance with such
covenants or be deemed, under any circumstances, to be a beneficiary of such
covenants, any or all of which may be freely waived in whole or in part by
Beneficiary or Trustee at any time if in the sole discretion of either of them
such waiver is deemed advisable. All such covenants of Grantor shall run with
the land and bind Grantor, the successors and assigns of Grantor (and each of
them) and all subsequent owners, encumbrancers and tenants
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28
of the Trust Property, and shall inure to the benefit of Beneficiary, Trustee
and their respective successors and assigns. Without limiting the generality of
the foregoing, any successor to Trustee appointed by Beneficiary shall succeed
to all rights of Trustee as if such successor had been originally named as
Trustee hereunder. The word "Grantor" shall be construed as if it read
"Grantors" whenever the sense of this Deed of Trust so requires and if there
shall be more than one Grantor, the obligations of the Grantors shall be joint
and several.
35. No Waivers, etc. Any failure by Beneficiary to insist upon
the strict performance by Grantor of any of the terms and provisions of this
Deed of Trust shall not be deemed to be a waiver of any of the terms and
provisions hereof, and Beneficiary or Trustee, notwithstanding any such failure,
shall have the right thereafter to insist upon the strict performance by Grantor
of any and all of the terms and provisions of this Deed of Trust to be performed
by Grantor. Beneficiary may release, regardless of consideration and without the
necessity for any notice to or consent by the beneficiary of any subordinate
deed of trust or the holder of any subordinate lien on the Trust Property, any
part of the security held for the obligations secured by this Deed of Trust
without, as to the remainder of the security, in anywise impairing or affecting
this Deed of Trust or the priority of this Deed of Trust over any subordinate
lien or deed of trust.
36. Governing Law, etc. This Deed of Trust shall be governed
by and construed in accordance with the laws of the State in which the Premises
are located, except that Grantor expressly acknowledges that by its terms the
Senior Secured Credit Agreement shall be governed and construed in accordance
with the laws of the State of New York, without regard to principles of conflict
of law, and for purposes of consistency, Grantor agrees that in any in personam
proceeding related to this Deed of Trust the rights of the parties to this Deed
of Trust shall also be governed by and construed in accordance with the laws of
the State of New York governing contracts made and to be performed in that
State, without regard to principles of conflict of law.
37. Waiver of Trial by Jury. Grantor, Trustee and Beneficiary
each hereby irrevocably and unconditionally waive trial by jury in any action,
claim, suit or proceeding relating to this Deed of Trust and for any
counterclaim brought therein.
38. Certain Definitions. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Deed of Trust shall be used interchangeably in singular or plural form
and the word "Grantor" shall mean "each Grantor or any subsequent owner or
owners of the Trust Property or any part thereof or interest therein," the word
"Beneficiary" shall mean "Beneficiary or any successor Administrative Agent,"
the word "Trustee" shall mean "Trustee and any successor trustee hereunder," the
word "Notes" shall mean "the notes that may from time to time be given pursuant
to the terms of the Senior Secured Credit Agreement or any other evidence of
indebtedness secured by this Deed of Trust," the word "person" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Trust
Property" shall include any portion of the
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29
Trust Property or interest therein. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa. The captions in this Deed of Trust are for convenience or
reference only and in no way limit or amplify the provisions hereof.
39. Reconveyance of Deed Of Trust. Upon payment in full of the
Indebtedness, the termination of all Commitments under the Senior Secured Credit
Agreement secured hereby and the compliance with the Obligations then required
to be complied with, Beneficiary shall release the encumbrance of this Deed of
Trust. If any of the Trust Property shall be sold, transferred or otherwise
disposed of by Grantor in a transaction expressly permitted by the Senior
Secured Credit Agreement, then Beneficiary shall execute and deliver, and shall
cause Trustee to execute and deliver to Grantor (at the sole cost and expense of
Grantor) all releases, reconveyances or other documents reasonably necessary or
desirable for the release of such Trust Property from the encumbrance of this
Deed of Trust.
40. Conflict With Senior Secured Credit Agreement. In the
event of any conflict or inconsistency between the terms and provisions of this
Deed of Trust and the terms and provisions of the Senior Secured Credit
Agreement, the terms and provisions of the Senior Secured Credit Agreement shall
govern, other than with respect to the Section of this Deed of Trust captioned
"Governing Law, etc.". By their execution of the Senior Secured Credit
Agreement, each Lender hereby agrees that it shall not have the right to
institute any suit for enforcement of Notes or any other Indebtedness secured by
this Deed of Trust or any other Security Document, if and to the extent that the
institution or prosecution thereof or the entry of judgment therein would, under
applicable law, result in the surrender, impairment, waiver or loss of the Lien
of this Deed of Trust or any other Security Document or impede or delay the
enforcement of the Lien of this Deed of Trust or any other Security Document.
41. Receipt of Copy. Grantor acknowledges that it has received
a true copy of this Deed of Trust.
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30
This Deed of Trust has been duly executed by Grantor as of the
date first above written.
Signed, sealed and EV INTERNATIONAL, INC.
delivered in our
presence: By:
-----------------------
Name:
Title:
---------------------------
Name:
---------------------------
Name:
000
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK )
On this ________ day of _____________ in the year 1997 before
me, ________, a Notary Public of said State, duly commissioned and sworn,
personally appeared _____________________ , personally known to me (or proved to
me on the basis of satisfactory evidence _______________) to be the person who
executed the within instrument as president (or secretary) or on behalf of the
corporation therein and acknowledged to me that such corporation executed the
same.
In Witness Whereof, I have hereunto set my hand and affixed by
official seal the day and year in this certificate first above written.
_____________________________
Notary Public
[Notarial Stamp]
282
CERTIFICATION PURSUANT TO CALIFORNIA GOVERNMENT CODE 27361.7:
I certify under penalty of perjury that the notary seal on the document to which
this statement is attached reads as follows:
Name of Notary: __________________________________________
Date Commission Expires: _________________________________
County where qualification
or bond is filed: ________________________________________
Place of execution: ______________________________________
Signature: _______________________________________________
Print Name:
283
Schedule A
Description of the Premises
[Attach Legal Description of all parcels]
284
000 Xxxxxxxxxx Xxxxxx Telephone 000 000 0000
Xxxxxxxxxx, XX 00000 FAX 000 000 0000
EXHIBIT E TO
CREDIT
AGREEMENT
APPRAISAL ECONOMICS INC.
February 10, 0000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
and
The Chase Manhattan Bank
as Administrative Agent under the Senior Secured Credit Agreement referred to
below, and as Agent under the Senior Subordinated Credit Agreement referred to
below 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
and
Greenwich Street Capital Partners, L.P.,
Greenwich Street Offshore Fund, Ltd.,
The Travelers Insurance Company,
The Travelers Life and Annuity Company,
TRV Employees Fund, L.P.
x/x Xxxxxxxxx Xxxxxx Capital Partners, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
The Lenders from time to time party to either Credit Agreement referred to below
Dear Ladies and Gentlemen:
At your request, we have undertaken and completed an analysis and a valuation of
the audio products business of Gulton Industries, Inc. and its subsidiaries
("GII" or the "Company") which are being acquired by Gulton Acquisition
Corporation ("Acquisition
--------------------------------------------------------------------------------
HACKENSACK, NEW JERSEY RANCHO CORDOVA, CALIFORNIA BARRINGTON, ILLINOIS
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 2
Co." or the "Borrower"), through the purchase from Xxxx XX Industries, Inc.
("Xxxx XX Industries") and Xxxx XX PLC of the capital stock of GII (the
"Acquisition"). Greenwich Street Capital Partners, Inc. ("Greenwich") has formed
Acquisition Co., a Delaware corporation, to undertake this transaction.
Following the Acquisition, Acquisition Co. will merge with and into GII (the
"First Merger") with GII as the surviving corporation. GII will merge with and
into its subsidiary Electro-Voice, Incorporated (the "Second Merger") and
together with the First Merger, (the "Mergers"), with Electro-Voice,
Incorporated being the surviving corporation and changing its name to EV
International, Inc. ("EV International"). The purpose of our analysis and
valuation is to provide our opinion as to the solvency of EV International.
Capitalized terms used and not otherwise defined herein shall have the meanings
ascribed to such terms in the Senior Secured Credit Agreement referred to below.
The Company is engaged in the manufacture and sale of high quality, high
performance sound system products for musical concerts, stadiums, theaters,
churches, and other places where music or speech is amplified. The principal
product lines include wired and wireless microphones, mixing consoles. signal
processors, amplifiers, loudspeakers and loudspeaker systems. The Company
operates on a worldwide basis with approximately 55 percent of sales occurring
outside the United States. The Company is headquartered in Xxxxxxxx, Michigan,
and also owns facilities in Tennessee, Oklahoma, California, Germany, England,
and Canada. The Company also leases facilities in the United States, England,
Switzerland, France, Australia, Japan, China and Hong Kong. The Company employs
approximately 1,700 people and has been in existence for approximately 60 years.
As used in this letter, prior to the consummation of the Transactions (as
defined below), GII shall mean the audio products business of Gulton Industries,
Inc. prior to its merger with and into Acquisition Co., and after the
consummation of the Transactions referred to below, the term "Borrower" shall
mean EV International. Consummation of the Facilities (as defined below)
provided under the Senior Secured Credit Agreement is conditioned upon the
concurrent consummation of the Acquisition and the transactions contemplated
thereby including the indirect contribution of $57,600,000 in proceeds from the
issuance by EV International of capital stock (comprised of $13,000,000 of
Senior PIK Preferred Stock, and $44,600,000 of Common Stock) to Gulton and the
consummation of the issuance by EV International of $75,000,000 in principal
amount of Subordinated Loans (the "Subordinated Debt"), and $35,000,000 in
principal amount of Senior Secured Term Loan ("Term Loan") (collectively the
"Loans").
Following the closing of the Acquisition, it is anticipated that EV
International will refinance the Subordinated Debt and $12,000,000 of the Term
Loan, and its parent will
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 3
redeem the Senior Preferred Stock. from the proceeds of a subordinated debt
offering by EV International.
The consummation of the Acquisition, the aforesaid Mergers, the contributions of
proceeds from the issuance by EV International of capital stock, the financial
accommodations under the Credit Agreement, the issuance by EV International of
the Subordinated Debt and all the transactions contemplated in connection with
each of the foregoing are hereinafter referred to as the "Transactions."
The Borrower has entered into the Senior Secured Credit Agreement (the "Senior
Secured Credit Agreement"), dated as of the date hereof, with the financial
institutions parties thereto, as lenders, and The Chase Manhattan Bank as
administrative agent ("Administrative Agent"), pursuant to which up to
$25,000,000 in Revolving Credit Loans, the $35,000,000 Term Loan and other
financial accommodations (collectively the "Facilities") will be made available
to the Borrower, and the Senior Subordinated Credit Agreement, dated as of the
date hereof (the "Senior Subordinated Credit Agreement"), and together with the
Senior Secured Credit Agreement (the "Credit Agreements"), with the financial
institution parties thereto, as lenders, and The Chase Manhattan Bank as agent
("Agent"), pursuant to which the Subordinated Debt will be made available to the
Borrower.
Interest on the Facilities may accrue at the ABR Rate or Eurodollar Rate.
The Facilities under the Senior Secured Credit Agreement are secured by (i)
pledges of the stock of Borrower and (ii) security interests in and liens upon
(except as otherwise agreed by the Agent) substantially all other assets now or
hereafter owned by the Borrower and its domestic subsidiaries, including, but
not limited to, accounts receivable, inventory, general intangibles, and real
property of the Borrower and such subsidiaries.
We further understand mandatory repayments of the Facilities under the Senior
Secured Credit Agreement are required from (i) the net cash proceeds from
certain assets sales, (ii) the net proceeds from equity issuances of the
Borrower or any of its subsidiaries, (iii) for each fiscal year of the Borrower
commencing in Fiscal Year 1999 a specified percentage of annual excess cash
flow, (iv) any purchase price adjustments paid by the sellers of GII to the
Borrower. These mandatory payments are to be applied first to permanently repay
Term Loans then outstanding, second, to repay Revolving Credit Loans then
outstanding, third, to pay any Reimbursement Obligations then outstanding, and,
last, to cash collateralize any outstanding L/C Obligations on terms reasonably
satisfactory to the Agent.
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 4
The scheduled amortizations on and final maturity of the Term Loans are as
presented in Schedule II. Scheduled amortization begins November 30, 1997.
We have reviewed and understand each of the limitations on Borrower set forth in
each of the covenants contained in the Credit Agreement.
The following terms are used herein as defined below:
- "Fair Value" means the value which would be realized in an exchange or
series of exchanges between a willing buyer and a willing seller,
within a commercially reasonable period of time, neither being under
any compulsion to act and each having reasonable knowledge of all
relevant facts. Further, "Fair Value" assumes the retention of all
operating assets within the economic entity and continuation of the
operations as a going concern.
- "Present Fair Salable Value" means the value which would be realized
from a willing, independent purchaser aware of all relevant information
relating to the assets or group of assets being sold and who is willing
to purchase in an arm's-length transaction under ordinary selling
conditions in an existing and not theoretical market for the sale of
assets of a comparable business enterprise if the assets or group of
assets are disposed of with reasonable promptness. The term "reasonable
promptness" is normally defined to mean a period of six months to one
year.
- "Identified Contingent Liabilities" means the estimated maximum amount
of liability that may result from pending litigation, asserted claims
and assessments, guarantees, uninsured risks and any other contingent
liability (including environmental clean-up and unfunded liability for
retiree welfare benefits), whether subordinated, matured, unmatured,
liquidated or unliquidated, as identified to us by responsible officers
of the Company, accountants, financial advisors and such other experts
as we deemed necessary to consult and valued by us after consultation
with responsible officers and employees of the Company, as the case may
be, and/or such industry, economic, statistical, and other experts as
we deemed necessary to consult (the valuation of contingent liabilities
to be computed in light of all the facts and circumstances existing at
the time of such valuation as the maximum amount that can reasonably be
expected to become an actual or matured liability), which contingent
liabilities may not meet the criteria for accrual under Statement of
Financial Accounting Standards No. 5 and therefore may not be recorded
as liabilities under generally accepted accounting principles ("GAAP").
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 5
- "Stated Liabilities" means the matured, contingent, subordinated,
unmatured, liquidated and unliquidated liabilities of the Company as of
November 30, 1996, determined in accordance with GAAP, assuming the
Transactions have been consummated as proposed (and taking into
consideration amounts currently outstanding, and additional borrowing
capacity under the Facilities and also assuming the full utilization of
the Facilities and full issuance of the Subordinated Debt), during the
period covered by the Projections (as defined below) prepared by
management of the Company
- "able to pay its debts as they mature" means that during the period
covered by the Projections the Borrower will have positive cash flow
after paying its Stated Liabilities; the realization of current assets
in the ordinary course of business of the Borrower will be sufficient
to pay its Stated Liabilities, including Identified Contingent
Liabilities, as such obligations mature; and that the Borrower has
sufficient ability to obtain cash necessary to repay its long-term
indebtedness as such debt matures.
- "will not have unreasonably small capital" means that during the period
covered by the Projections, the Borrower has and will have sufficient
capital levels during the ordinary course of business after payment of
principal and interest on the Facilities and interest on the
Subordinated Debt to operate its business without interruption due to
lack of capital.
In providing the following opinions, we have performed reviews, analyses,
appraisals and inquiries as we deemed necessary and appropriate under the
circumstances. In the normal course of our studies, we have performed the
following:
1. Reviewed the audited, unaudited, pro forma and other consolidated
financial statements of the Company prepared by the Company and set
forth in the Memorandum dated January 1997 prepared by Chase Securities
Inc. for the syndication of the Facilities as well as the latest
interim financial statements of the Company dated November 30, 1996.
The independent accounting firm of Coopers & Xxxxxxx LLP performed the
audits of the audited financial statements.
2. Reviewed forecasts and projections prepared for the Company as of
January 1997 for the fiscal years ended on the last day in February
1997 through February 2007 (the "Projections") and inquired of
management of the Company as to the foundation for such material and
the basic assumptions made in the preparation of the Projections
relating to the type of business, geographic markets, domestic and
international economic conditions, capital facilities and working
capital
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 6
requirements. We have extended the Projections beyond the fiscal year
ended February 28, 2007 at a constant rate utilizing the projected
growth rate for 2007. We believe the assumptions used in preparing the
Projections (and our extension thereof) are reasonable.
3. Met with certain responsible members of the Company's management to
discuss the operations, financial condition, future prospects and
projected operations and performance of the Company.
4. Reviewed the proposed capital structure of the Borrower as it relates
to the debt service and repayment schedule of all senior and
subordinated debt and other obligations outstanding, including, without
limitation, the Facilities and the Subordinated Debt.
5. Made a site visit to the Company's corporate headquarters located in
Buchanan, Michigan, and discussed with management the historical and
projected operating results and industry data, including the impact of
future trends on the industry and the Company, as well as the effects
of the limitations of business operations and other provisions of the
Facilities and Subordinated Debt.
6. Reviewed internal financial analyses and other internally generated
data of the Company.
7. Reviewed certain publicly available economic, financial and market
information as it relates to the respective business operations of the
Company.
8. Reviewed each of the Credit Agreements, and the respective Exhibits and
Schedules thereto.
9. Performed such other studies, analyses and investigations and met with
such experts as we have deemed appropriate and have relied on generally
accepted valuation principles and procedures.
In conjunction with our work, we have assumed, without independent verification,
that the data was reasonably prepared, complete and without material
misstatement or omission and that the sources such as the management of the
Company and Coopers & Xxxxxxx LLP are reliable. Management of the Company has
each represented to us, and we have relied on management's representations, that
no adverse changes have occurred since November 30, 1996 to the date of this
letter that would materially affect the content of the Projections. Nothing has
come to our attention during the course of our
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 7
engagement which has led us to believe that any information reviewed by us or
presented to us in connection with our rendering of the solvency opinions set
forth herein is unreasonable in any material respect or that it was unreasonable
for us to use, utilize and rely upon the Projections (and our extension thereof
beyond February 28, 2007), financial statements, assumptions, estimates, and
judgments or statements, as the case may be, of the management of the Company or
their respective counsel, accountants and financial advisors and experts
referred to herein.
These opinions value the Borrower (including its assets both tangible and
intangible in their entirety) as a going concern (including goodwill), both
immediately before and after giving effect to the financial accommodations under
the Facilities, the issuance of the Subordinated Debt and the application of the
proceeds of the foregoing. We believe that this is a reasonable basis on which
to value the Borrower and nothing has come to our attention that indicates that
the entity, both before and after the related financing, was not and is not a
going concern that is capable of continuing its current operations.
Our analysis of the Borrower assumes that the Funded Debt incurred in connection
with the acquisition of the Company will only consist of the $110,000,000
principal amount of the Facilities, Subordinated Debt, and other debt and
scheduled interest thereon. Furthermore, our opinions are necessarily based on
economic, market and other conditions as they exist and could be evaluated by us
at the date of this letter.
Based on our analysis, it is our opinion as of the date hereof, that both
immediately before and after giving effect to the consummation of the
Transactions:
a) The Fair Value and Present Fair Salable Value of the assets of the
Borrower will exceed the sum of its Stated Liabilities, including
Identified Contingent Liabilities;
b) The Borrower is and will continue to be able to pay its debts including
the principal of the Facilities and the interest accrued thereon, the
principal of and interest on the Subordinated Debt as they mature in
the normal course of business through various means which may include
refinancing and assets sales; and
c) The Borrower did not and will not have unreasonably small capital with
which to engage in its business as such business is conducted and is
proposed to be conducted following the consummation of the
Transactions.
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 8
This opinion is subject to the Statement of Limiting Conditions attached hereto
as Schedule I. Work notes from which this opinion has been prepared are retained
in our files and are available for inspection on request.
Respectfully submitted,
APPRAISAL ECONOMICS INC.
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 9
Schedule I
STATEMENT OF LIMITING CONDITIONS
We have made no independent investigation of, and have relied on management's
representations to us as to title to the assets of the Company and, other than
as set forth in the attached opinion letter, we have made no investigation of
and have relied on management's representations to us as to the liabilities of
the Company.
Neither Appraisal Economics Inc. nor any of its employees has any present,
prospective, direct or indirect interest (financial or other) in GII, EV
International, Xxxx XX Industries, Greenwich Street Capital Partners, Inc., The
Chase Manhattan Bank, or any of their respective assets.
The information and data supplied by others, which have been considered in the
analysis, are from sources believed to be reliable but no further responsibility
is assumed for their accuracy.
We assume that there are no undisclosed conditions relating to either the real
or personal property which would adversely affect the economic prospects of the
Company.
Neither all nor any part of the contents of this solvency opinion shall be
conveyed to the public through advertising, public relations, news, sales or
other media without the written consent and approval of Appraisal Economics Inc.
Documentation of the premises and procedures utilized has been prepared in a
manner to fully support our conclusions and will be retained in our files.
However, any testimony or appearance in court required is outside the initial
scope of our engagement but will be provided at our then prevailing per diem fee
The fee for the solvency opinion is not contingent upon the conclusions
reported.
Except for matters of which we have actual knowledge based on discussions,
studies, analyses and investigations undertaken in connection herewith,
Appraisal Economics Inc. accepts as being materially correct the financial
statements, both audited and unaudited, and other financial data provided by the
Company without further investigation.
In the event that this solvency opinion is used as a basis to set market price,
no responsibility is assumed for the inability to obtain a purchaser or the
conclusion reported herein.
000
Xxxxxxxxx Xxxxxx Capital Partners, Inc.
February 10, 1997
Page 10
Schedule II
AMORTIZATION SCHEDULE
SENIOR SENIOR SECURED
SENIOR SECURED SUBORDINATED REVOLVING CREDIT
FISCAL YEAR TERM LOAN LOANS LOANS
----------- -------------- ------------ ----------------
1998 $ 1,944,366 $ 0 $ 0
1999 $ 3,888,732 $ 0 $ 0
2000 $ 5,866,900 $ 0 $ 0
2001 $ 7,000,000 $ 0 $ 0
2002 $ 8,400,000 $ 0 $ 0
2003 $ 7,900,002 $ 0 $ 25,00,000
2004 $ 0 $ 0 not applicable
2005 $ 0 $ 0 not applicable
2006 $ 0 $ 0 not applicable
2007 $ 0 $75,000,000 not applicable
----------- ----------- --------------
Total $35,000,000 $75,000,000 $ 25,000,000
=========== =========== ==============
294
EXHIBIT F TO
CREDIT AGREEMENT
February 10, 1997
The Chase Manhattan Bank,
as Administrative Agent
under the Credit Agreement referred to below
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Each of the Lenders named in Annex A
attached hereto that are parties
to the Credit Agreement referred to below
We have acted as special counsel to EVI Audio Holding, Inc., a
Delaware corporation ("Holdings"), and its wholly owned subsidiary Gulton
Acquisition Corp., a Delaware corporation ("Acquisition Co."), in connection
with (a) the preparation, and the execution and delivery today, of (i) the
Credit Agreement, dated as of February 10, 1997 (the "Senior Credit Agreement"
or "Credit Agreement"), among Acquisition Corp., the several banks and other
financial institutions parties thereto named on the signature pages thereof
(collectively, the "Senior Lenders"), and The Chase Manhattan Bank, a New York
banking corporation, as administrative agent for the Senior Lenders (in such
capacity, the "Administrative Agent" and together with the Senior Lenders, the
"Secured Parties"), (ii) the Guarantee and Collateral Agreement, dated as of
February 10, 1997 (the "Guarantee and
000
Xxx Xxxxx Xxxxxxxxx Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -2- February 10, 1997
Collateral Agreement"), made by Holdings and EV International (as hereinafter
benefit of the Senior Lenders, (iii) the Patent and Trademark Security
Agreement, dated as of February 10, 1997 (the "Patent and Trademark Security
Agreement"), made by EV International (as hereinafter defined) in favor of the
Administrative Agent for the benefit of the Senior Lenders, and (iv) the other
Loan Documents (as hereinafter defined), and (b) the consummation today of the
Acquisition and the Mergers (as each such term is hereinafter defined) and the
other transactions contemplated by the Loan Documents.
The opinions expressed below are furnished to you pursuant to
subsection 6.1 (o)(i) of the Senior Credit Agreement. Unless otherwise defined
herein or in any Schedule hereto, capitalized terms defined in the Credit
Agreement are used herein as defined therein. As used herein, the following
terms shall have the following meanings: The term "Acquisition" means the
acquisition by Acquisition Co. of Gulton Industries, Inc. ("Gulton"), a Delaware
corporation and a wholly owned subsidiary of Xxxx XX Industries, Inc. ("Xxxx
XX"), pursuant to the terms of the Stock Purchase Agreement, dated as of
December 12, 1996, by and among Xxxx XX, Gulton, Xxxx XX PLC and Acquisition
Co., as amended by Amendment and Supplement thereto, dated as of December 18,
1996, among the original parties to the Stock Purchase Agreement and Amendment
and Supplement thereto, dated as of February 7, 1997, among the original parties
to the Stock Purchase Agreement (as so amended, the "Stock Purchase Agreement").
The term "Foreign Holding Co." means EVI Audio International Holding
Corporation, Inc., a Delaware corporation and a wholly owned subsidiary of EV
International (as defined below). The term "First Merger" refers to the merger
today of Acquisition Co. with and into Gulton, with Gulton being the surviving
corporation of such merger. The term "Second Merger" refers to the merger today
of Gulton with and into Electro-Voice, Incorporated, a Delaware corporation and
a wholly owned subsidiary of Gulton, with Electro-Voice, Incorporated being the
surviving corporation of such merger and being renamed EV International, Inc.
("EV International"). The term "Mergers" refers collectively to the First Merger
and the Second Merger. The term "Material Adverse Effect" means a material
adverse effect on the business, operations, property or condition (financial or
otherwise) of Holdings and its Subsidiaries taken as a whole. The term "DGLC"
means the General Corporation Law of the State of Delaware as in effect on the
date hereof. The term
296
The Chase Manhattan Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -3- February 10, 1997
"UCC" means the Uniform Commercial Code as in effect in the State of New York on
the date hereof.
In arriving at the opinions expressed below,
(1) we have examined and relied on the following (including, but not limited to,
the representations and warranties contained therein):
(a) originals, or copies certified or otherwise identified to
our satisfaction, of the Credit Agreement, any Notes issued today
pursuant thereto, the Guarantee and Collateral Agreement, the Patent
and Trademark Security Agreement and the Mortgages to which EV
International is today a party listed in Schedule 2 hereto (such
Mortgages, together with the Credit Agreement, the Guarantee and
Collateral Agreement, and the Patent and Trademark Security Agreement,
the "Loan Documents"),
(b) originals or copies certified or otherwise identified to
our satisfaction of the contracts and agreements to which Holdings or
Acquisition Co. is today a party that are listed in Schedule 3 hereto
(collectively, the "Contracts"), and
(c) such corporate documents and records of Holdings,
Acquisition Co. or EV International and such other instruments and
certificates of public officials, officers and representatives of
Holdings, Acquisition Co., EV International and other Persons as we
have deemed necessary or appropriate for the purposes of this opinion;
and
(2) we have made such investigations of law as we have deemed appropriate as a
basis for this opinion.
In rendering the opinions expressed below, we have assumed,
with your permission, without independent investigation or inquiry, (a) the
authenticity of all documents submitted to us as originals, (b) the genuineness
of all signatures on all documents that we examined (other than those of any
officer of Holdings or Acquisition Co., or following the Acquisition, of Gulton
or EV International), (c) the
000
Xxx Xxxxx Xxxxxxxxx Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -4- February 10, 1997
conformity to authentic originals of documents submitted to us as certified,
conformed or photostatic copies and (d) the due authorization, execution and
delivery of the Loan Documents by each party thereto (other than Holdings or
Acquisition Co., or following the Acquisition, of Gulton or EV International).
Based upon and subject to the foregoing and the qualifications
hereinafter set forth, we are of the opinion that:
1. Each of Holdings, Acquisition Co. and Foreign Holding Co.
(i) is duly incorporated, validly existing and in good standing under the laws
of the State of Delaware, and (ii) has the corporate power and authority to own
and operate its respective property, to lease the property each operates as
lessee and to conduct the business in which each is currently engaged.
2. Each of Holdings, Acquisition Co. and (after giving effect
to the Acquisition and the Mergers) EV International has the corporate power and
authority to make, deliver and perform its obligations under each of the Loan
Documents to which it is today a party and, in the case of Acquisition Co., to
borrow today under the Credit Agreement. Each of Holdings, Acquisition Co. and
(after giving effect to the Acquisition and the Mergers) EV International has
taken all necessary corporate action to authorize the execution, delivery and
performance of the Loan Documents to which it is today a party, and in the case
of Acquisition Co., to authorize its borrowings today on the terms and
conditions of the Credit Agreement. Except for (a) any consents, authorizations,
approvals, notices and filings that have been obtained or made, (b) filings in
the United States Patent and Trademark Office, the United States Copyright
Office, and appropriate offices under any applicable state trademark laws, (c)
filings to perfect the security interests created by the Guarantee and
Collateral Agreement or any Mortgage, (d) mortgage filings related to any of the
Loan Documents and (e) those consents, authorizations, approvals, notices and
filings that if not made, obtained or done, would not, to our knowledge, have a
Material Adverse Effect, to our knowledge no consent or authorization of,
approval by, notice to, or filing with, any Federal, New York or Delaware
(insofar as the DGCL is concerned) court or governmental authority is required
to be obtained or made on or prior to the date hereof by Holdings, Acquisition
Co. or EV International, as the case may be, in connection with its respective
execution, delivery or performance of the Loan Documents to which it is
298
The Chase Manhattan Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -5- February 10, 1997
today a party or, in the case of Acquisition Co., with the borrowings today
under the Credit Agreement, or in connection with the validity or enforceability
against it of the Loan Documents to which it is today a party.
3. (a) The Senior Credit Agreement, as in effect today, has
been duly executed and delivered on behalf of Acquisition Co. The Senior Credit
Agreement, as in effect today and after giving effect to the Acquisition and the
Mergers, constitutes the legal, valid and binding obligation of EV International
enforceable against EV International in accordance with its terms.
(b) After giving effect to the Acquisition and the Mergers,
the Guarantee and Collateral Agreement has been duly executed and delivered on
behalf of EV International and constitutes the legal, valid and binding
obligation of EV International enforceable against EV International in
accordance with its terms.
(c) The Guarantee and Collateral Agreement has been duly
executed and delivered on behalf of Holdings, and constitutes the legal, valid
and binding obligation of Holdings enforceable against Holdings in accordance
with its terms.
4. (a) The execution and delivery by Acquisition Co. of the
Senior Credit Agreement, the performance by Acquisition Co. of its obligations
thereunder, and the borrowings today by Acquisition Co. under the Senior Credit
Agreement, all as provided therein, (x) will not violate (i) the certificate of
incorporation or by-laws of Acquisition Co., (ii) any existing Federal, New York
or DGCL law, rule or regulation known to us to be applicable to Acquisition Co.
or any of its material properties, (iii) any existing judgment, order or decree
known to us of any arbitrator, court or other governmental authority binding
upon Acquisition Co. or any of its material properties or to which Acquisition
Co. or any of its material properties is subject or (iv) any Contract to which
Acquisition Co. is a party, except, in the case of clauses (ii), (iii) and (iv),
for such violations that to our knowledge would not have a Material Adverse
Effect, and (y) will not result in, or require, the creation or imposition of
any Lien (other than under the Loan Documents) on any of the properties or
revenues of Acquisition Co., by operation of any law, rule, regulation,
judgment, order or decree referred to in the preceding clause (x) or pursuant to
any such Contract.
299
The Chase Manhattan Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -6- February 10, 1997
(b) After giving effect to the Acquisition and the Mergers,
the execution and delivery by EV International of the Guarantee and Collateral
Agreement, the performance by EV International of its obligations under any Loan
Document to which it is today a party, and the creation today and perfection of
any security interest upon or with respect to any of the properties of EV
International, all as provided therein, will not violate (i) the certificate of
incorporation or by-laws of EV International, or (ii) any existing Federal, New
York or DGCL law, rule or regulation known to us to be applicable to EV
International or any of its material properties, except, in each case, for such
violations that to our knowledge would not have a Material Adverse Effect.
(c) The execution and delivery by Holdings of the Guarantee
and Collateral Agreement, the performance by Holdings of its obligations
thereunder, and the creation and perfection today of any security interest upon
or with respect to any of the properties of Holdings, all as provided therein,
(x) will not violate (i) the certificate of incorporation or by-laws of
Holdings, (ii) any existing Federal, New York or DGCL law, rule or regulation
known to us to be applicable to Holdings or any of its material properties,
(iii) any existing judgment, order or decree known to us of any arbitrator,
court or other governmental authority binding upon Holdings or any of its
material properties or to which Holdings or any of its material properties is
subject or (iv) any Contract to which Holdings is a party, except, in the case
of clauses (ii), (iii) and (iv), for such violations that to our knowledge would
not have a Material Adverse Effect, and (y) will not result in, or require, the
creation or imposition of any Lien (other than under the Loan Documents) on any
of the properties or revenues of Holdings, by operation of any law, rule,
regulation, judgment, order or decree referred to in the preceding clause (x) or
pursuant to any such Contract.
5. (a) The provisions of the Guarantee and Collateral
Agreement that purport to create security interests are effective to create
security interests in favor of the Administrative Agent, for the benefit of the
Secured Parties, in all of the collateral of Holdings or EV International
described therein that is of the type in which a security interest can be
created under Article 9 of the UCC (the "Collateral"), to the extent the UCC is
applicable to the creation of such security interests.
(b) The Administrative Agent will have a valid and perfected
security interest, for the benefit of the Secured Parties, in the Collateral of
Holdings or EV
300
The Chase Manhattan Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -7- February 10, 1997
International that consists of Pledged Stock (as defined in the Guarantee and
Collateral Agreement) pledged today, upon the execution and delivery of the
Guarantee and Collateral Agreement, and the delivery of such Pledged Stock to
(and retention of possession thereof by) the Administrative Agent. Assuming the
Administrative Agent (i) acquires its security interest in such Pledged Stock in
good faith and without notice of any adverse claim (as defined in Section
8-302(2) of the UCC) and (ii) the Administrative Agent takes possession of each
certificate evidencing shares of such Pledged Stock either in bearer form or
registered form, issued or endorsed in the name of the Administrative Agent or
in blank, the Administrative Agent will acquire its security interest in such
Pledged Stock free of adverse claims (as so defined) governed by the UCC.
6. To our knowledge, except as described in the Credit
Agreement, no litigation, investigation or proceeding of or before any
arbitrator, court or other governmental agency is pending or threatened by or
against Holdings or Acquisition Co. or against any of its or their respective
properties or revenues with respect to the Credit Agreement or any of the other
Loan Documents or the transactions contemplated by the Stock Purchase Agreement.
7. Neither Holdings nor Acquisition Co. is (a) an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or "controlled" by an entity required to be registered as an "investment
company" under such Act, or (b) a "holding company" as defined in, or otherwise
subject to regulation under, the Public Utility Holding Company Act of 1935.
8. Acquisition Co. is not subject to regulation under any
Federal or New York state statute or regulation that limits its ability to
borrow under the Credit Agreement.
Our opinions set forth in paragraphs 2, 3, 4, 5 and 8 above
are subject to the effects of (a) bankruptcy, insolvency, fraudulent conveyance,
fraudulent transfer, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights or remedies generally, and (b) general
equitable principles (whether considered in a proceeding in equity or at law).
Our opinions set forth in paragraphs 2, 3, 4, 5 and 8 above are also subject to
the effects of (i) an implied covenant of good faith,
000
Xxx Xxxxx Xxxxxxxxx Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -8- February 10, 1997
reasonableness and fair dealing, (ii) applicable laws and interpretations which
may affect the validity or enforceability of certain remedies provided for in
the Loan Documents, which limitations, however, do not, in our opinion, make the
remedies provided for therein inadequate for the practical realization of the
rights and benefits in tended to be provided thereby (subject to the other
qualifications expressed herein), and (iii) limitations on enforceability of
rights to indemnification under securities laws or regulations or to the extent
any indemnification would violate public policy. We express no opinion as to (1)
the enforceability of any waiver of any statutory right, (2) the security
interest referred to in the next to last paragraph of Section 9 of the Senior
Credit Agreement, (3) Section 11.12(i) of the Senior Credit Agreement, Section
8.12(a) of the Guarantee and Collateral Agreement, Section 22(a) of the Patent
and Trademark Security Agreement and any similar provision in any other Loan
Document, insofar as such provisions relate to the subject matter jurisdiction
of the United States District Court for the Southern District of New York to
adjudicate ally controversy, (4) the waiver of inconvenient forum set forth in
Section 11.12(ii) of the Senior Credit Agreement, Section 8.12(b) of the
Guarantee and Collateral Agreement, and Section 22(b) of the Patent and
Trademark Security Agreement and any similar provision in any other Loan
Document and (5) Section 36 of any of the Mortgages.
We express no opinion as to the validity or perfection of any
security interest, or the validity, binding effect or enforceability of any Loan
Document to the extent that such Loan Document grants or purports to grant a
security interest, (i) that is not governed by the UCC (including but not
limited to any such security interest with respect to (x) Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses, as such
terms are defined in the Guarantee and Collateral Agreement, and the Patent and
Trademark Security Agreement), (y) the Collateral Proceeds Account, the General
Fund Account and any Lockbox System, as such terms are defined in the Guarantee
and Collateral Agreement and (z) any other deposit accounts, insurance policies,
and real property and fixtures), (ii) in any collateral of a type described in
Section 9-401(1)(a) or (b) of the UCC, or (iii) in any collateral that contains
or is governed by provisions that purport to void or prohibit the assignment
thereof, or that are otherwise violated, if it is assigned pursuant to a
document such as the Guarantee and Collateral Agreement or any other Loan
Document, including, without limitation, any Accounts the obligor for which is
the United States of America or any department, agency or instrumentality
thereof. No security interest will exist
302
The Chase Manhattan Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -9- February 10, 1997
with respect to after-acquired property of Holdings of EV International until
such party has rights therein within the meaning of Section 9-203 of the UCC. We
express no opinion herein as to the title or any other interest of Holdings or
EV International in or to any of the collateral described in the Loan Documents.
Without limiting the foregoing, we have not made or undertaken to have made any
investigation of the state of title to any real property, fixtures or personal
property referred to in the Mortgages, and we express no opinion as to (i) the
title to or other ownership rights in, or the description of, such property,
(ii) the creation of any lien or security interest, or absence of any
conflicting rights of others, with respect to such property, or due recordation
of the Mortgages, (iv) the enforceability of any of the remedies set forth in
the Mortgages with respect to such property, or (v) any law relating to the
protection of the environment.
Except as set forth in paragraph 5 above, we express no
opinion as to the validity or perfection of the security interests purported to
be created by the Loan Documents. We express no opinion as to the validity or
perfection of such security interests:
(i) with respect to collateral sold, exchanged or otherwise
disposed of by a Loan Party;
(ii) to the extent such security interests may be affected by
(A) Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, under which a
bankruptcy court has discretion as to the extent to which post-petition
proceeds may be subject to a lien arising from a security agreement
entered into by the debtor before the commencement of the case, or (B)
Section 547(b) of the United States Bankruptcy Code, relating to the
power to avoid a preference;
(iii) with respect to proceeds, to the extent of limitations
under Section 9-306 of the UCC on the perfection of a security interest
in proceeds;
(iv) as to any collateral acquired by the party granting such
security interest more than four months after such party changes its
name, identity or corporate structure so as to make the relevant
financing statements seriously misleading, unless new appropriate
financing statements indicating the new
303
The Chase Manhattan Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -10- February 10, 1997
name, identity or corporate structure of such party are properly filed
before the expiration of such four months; and
(v) as to any securities, to the extent of limitations under
Section 8-321 of the UCC on the creation, perfection and continuation
of a security interest therein.
We call to your attention that (i) in the event that a debtor that maintains a
place of business in more than one county in the State of New York should at any
time in the future maintain a place of business in only one county in such
state, or a debtor that maintains a place of business in only one county in the
State of New York relocates such place of business to another county in such
state, continued perfection of a security interest granted by such debtor may
require filing of an appropriate financing statement in the office of the filing
officer of such county, (ii) the UCC requires periodic filing of continuation
statements in order to maintain the effectiveness of financing statements filed
pursuant thereto and (iii) Sections 8-304 and 8-311 of the UCC may in certain
circumstances limit the rights of a secured party in respect of any unauthorized
endorsement with respect to certificated securities constituting collateral
under the Loan Documents not registered in the name of or issued to the
Administrative Agent and not originally issued in bearer form.
Except as set forth in the last sentence of paragraph 5(b)
above, we express no opinion as to the priority of the security interests
purported to be created by the Loan Documents. Our opinion in paragraph 5 above
with respect to the Pledged Stock is subject to the effects of the attachment
provisions of Section 324 of the DGCL. In rendering the opinion set forth in
paragraph 5 above, we have assumed, with your consent, that all of the Pledged
Stock will be held at all times by the Administrative Agent in the State of New
York.
We express no opinion as to the validity, binding effect or
enforceability of any provision of the Loan Documents that purports (i) to
waive, release or vary any right of, or any duties owing to, any Loan Party, to
the extent limited by Section 1-102(3) or 9-501(3) of the UCC or other
provisions of applicable law, (ii) to prohibit any Loan Party from transferring
its respective rights in the collateral described in the Loan Documents or any
proceeds thereof, as a result of the operation of Section 9-311
304
The Chase Manhattan Bank,
as Administrative Agent
Each of the Lenders
named in Annex A -11- February 10, 1997
of the UCC, or (iii) to permit the Administrative Agent to vote or otherwise
exercise any rights with respect to any of the collateral under the Loan
Documents absent compliance with the requirements of applicable laws and
regulations as to the voting of or other exercise of rights with respect to such
collateral.
We express no opinion as to the effect of, or compliance with,
any Federal or State laws regarding fraudulent transfers or conveyances, or
provisions of Delaware or New York law restricting dividends, loans or other
distributions by a corporation or for the benefit of its stockholders, or any
Federal or State securities laws, rules or regulations, including without
limitation, as to the effect thereof on the validity, binding effect or
enforceability of any of the Loan Documents.
We express no opinion as to the laws of any jurisdiction other
than the laws of the State of New York, the General Corporation Law of the State
of Delaware and the Federal laws of the United States of' America.
The opinions expressed herein are solely for your benefit and,
without our prior consent, neither our opinion nor this opinion letter may be
disclosed publicly to or relied upon by any other person.
Very truly yours,
305
Annex A
LENDERS
1. Comerica Bank
2. The Travelers Insurance Company
3. The First National Bank of Boston
4. National CityBank (Cleveland)
5. BHF-Bank Aktiengefellschaft
6. NBD Bank
7. Michigan National Bank
8. The Bank of New York
9. Xxxxxx Financial, Inc.
10. The Chase Manhattan Bank
11. First Source Financial LL-P
306
Schedule 2
OTHER LOAN DOCUMENTS
The following Mortgages and Deeds of Trust (collectively, the
"Mortgages"):
1. Deed of Trust, Assignment of Rents and Leases, Security
Agreement and Fixture Filing, dated as of February 10, 1997,
from EV International, Inc., as Grantor, for the benefit of
The Chase Manhattan Bank, as Administrative Agent, regarding
property located in Sun Valley, California.
2. Deed of Trust, Assignment of Rents and Leases, Security
Agreement and Fixture Filing, dated as of February 10, 1997,
from EV International, Inc., as Grantor, for the benefit of
The Chase Manhattan Bank, as Administrative Agent, regarding
property located in Sylmar, California.
3. Mortgage, Assignment of Rents and Leases, Security Agreement
and Fixture Filing, dated as of February 10, 1997, from EV
International, Inc., as Mortgagor, to The Chase Manhattan
Bank, as Administrative Agent, as Mortgagee, regarding the
property located on Xxxxx Street in Buchanan, Michigan.
4. Mortgage, Assignment of Rents and Leases, Security Agreement
and Fixture Filing, dated as of February 10, 1997, from EV
International, Inc., as Mortgagor, to The Chase Manhattan
Bank, as Administrative Agent, regarding the property located
on East Front Street in Buchanan, Michigan.
5. Mortgage, Assignment of Rents and Leases and Security
Agreement, dated as of February 10, 1997, from EV
International, Inc., as Mortgagor, to The Chase Manhattan
Bank, as Administrative Agent, as Mortgagee, regarding
property located in Oklahoma City, Oklahoma.
6. Deed of Trust, Assignment of Rents and Leases and Security
Agreement, dated as of February 10, 1997, from EV
International, Inc., as Grantor, for the benefit of The Chase
Manhattan Bank, as Administrative Agent, regarding property
located in Newport, Tennessee.
307
7. Deed of Trust and Security Agreement, dated as of February 10,
1997, from EV International, Inc., as Grantor, for the benefit
of The Chase Manhattan Bank, as Administrative Agent,
regarding property located in Sevierville, Tennessee.
2
308
Schedule 3
CONTRACTS
1. The Stock Purchase Agreement (as defined in the body of this letter).
1
309
EXHIBIT G TO
CREDIT AGREEMENT
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
Reference is made to the Loan(s) held by the undersigned
pursuant to the Credit Agreement (as amended, supplemented, waived or otherwise
modified from time to time, the "Credit Agreement"), dated as of February 10,
1997 among EV International, Inc., a Delaware corporation formerly named
Electro-Voice, Incorporated (the "Borrower"), the several banks and other
financial institutions from time to time parties thereto (the "Lenders"), and
The Chase Manhattan Bank, a New York banking corporation, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent"). The
undersigned hereby certifies under penalty of perjury that:
(1) The undersigned is the beneficial owner of the Loan(s) (as
well as any Note(s) evidencing such Loan(s)) registered in its name;
(2) The undersigned is not a bank (as such term is used in
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended
(the "Code")), is not subject to regulatory or other legal requirements
as a bank in any jurisdiction, and has not been treated as a bank for
purposes of any tax, securities law or other filing or submission made
to any governmental authority, any application made to a rating agency
or any qualification for any exemption from any tax, securities law or
other legal requirements;
(3) The undersigned is not a 10-percent shareholder within the
meaning of Section 881(c)(3)(B) of the Code; and
(4) The undersigned is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
[NAME OF LENDER]
By:_____________________________________
[Address]
Dated: ____________, 199_
310
EXHIBIT H TO
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Senior Secured Credit Agreement,
dated as of February __, 1997 (as amended, supplemented, waived or otherwise
modified from time to time, the "Senior Secured Credit Agreement"), among EV
International, Inc., a Delaware corporation formerly named Electro-Voice,
Incorporated (the "Borrower"), the several banks and other financial
institutions from time to time parties thereto (the "Lenders"), and The Chase
Manhattan Bank, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"). Unless otherwise defined herein, terms defined in the
Senior Secured Credit Agreement and used herein shall have the meanings given to
them in the Senior Secured Credit Agreement.
_________________________ (the "Assignor") and
_____________________ (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby
irrevocably purchases and assumes from the Assignor without recourse to
the Assignor, as of the Transfer Effective Date (as defined below), a
percentage interest (the "Assigned Interest") as set forth in Schedule
1 hereto in and to the Assignor's rights and obligations under the
Senior Secured Credit Agreement and the other Loan Documents with
respect to those credit facilities provided for in the Senior Secured
Credit Agreement as are set forth on Schedule 1 hereto (individually,
an "Assigned Facility"; collectively, the "Assigned Facilities"), in a
principal amount for each Assigned Facility as set forth on Schedule 1
hereto.
2. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Senior Secured Credit
Agreement, any other Loan Document or any other instrument or document
furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Senior Secured
Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that it has not created
any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b)
makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower, any of its
Subsidiaries or any other obligor or the performance or observance by
the Borrower, any of its Subsidiaries or any other obligor of any of
their respective obligations under the Senior Secured Credit Agreement,
any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto; and (c) attaches the Note(s), if any, held
by it evidencing the Assigned Facilities and requests that the
Administrative Agent exchange such Note(s) for a new Note or Notes
payable to the Assignee and (if the Assignor has
311
2
retained any interest in the Assigned Facilities) a new Note or Notes
payable to the Assignor in the respective amounts which reflect the
assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Transfer Effective Date)
and (d) represents and warrants that it is legally authorized to enter
into this Assignment and Acceptance.
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms
that it has received a copy of the Senior Secured Credit Agreement,
together with copies of the financial statements referred to in
subsection 5.1 thereof and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the
Administrative Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Senior Secured Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (d)
appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under
the Senior Secured Credit Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto as
are delegated to the Administrative Agent by the terms thereof,
together with such powers as are incidental thereto; (e) hereby affirms
the acknowledgments and representations of such Assignee as a Lender
contained in subsection 10.6 of the Senior Secured Credit Agreement;
and (f) agrees that it will be bound by the provisions of the Senior
Secured Credit Agreement and will perform in accordance with the terms
of the Senior Secured Credit Agreement all the obligations which by the
terms of the Senior Secured Credit Agreement are required to be
performed by it as a Lender, including its obligations pursuant to
subsection 11.15 of the Senior Secured Credit Agreement, and, if it is
organized under the laws of a jurisdiction outside the United States,
its obligations pursuant to subsection 4.11(b) of the Senior Secured
Credit Agreement.
4. The effective date of this Assignment and Acceptance shall
__________ be , 19____ (the "Transfer Effective Date"). Following the
execution of this Assignment and Acceptance, it will be delivered to
the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to subsection 11.6 of the Senior Secured
Credit Agreement, effective as of the Transfer Effective Date (which
shall not, unless otherwise agreed to by the Administrative Agent, be
earlier than five Business Days after the date of such acceptance and
recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the
Transfer Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee whether
such amounts have accrued prior to the Transfer Effective Date or
accrued subsequent to the Transfer Effective Date. The Assignor and the
Assignee
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3
shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Transfer Effective Date
or with respect to the making of this assignment directly between
themselves.
6. From and after the Transfer Effective Date, (a) the
Assignee shall be a party to the Senior Secured Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and under the other Loan
Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Senior Secured Credit Agreement, but shall nevertheless
continue to be entitled to the benefits of subsections 4.10, 4.11, 4.12
and 11.5 thereof.
7. Notwithstanding any other provision hereof, if the consents
of the Borrower and the Administrative Agent hereto are required under
subsection 11.6 of the Senior Secured Credit Agreement, this Assignment
and Acceptance shall not be effective unless such consents shall have
been obtained.
8. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York without
regard to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date indicated by their
respective duly authorized officers on Schedule 1 hereto.
313
SCHEDULE 1 TO THE
ASSIGNMENT AND ACCEPTANCE
Re: Credit Agreement, dated as of February __, 1997 (as
amended, supplemented, waived or otherwise modified from time to time,
the "Senior Secured Credit Agreement"), among EV International, Inc., a
Delaware corporation formerly named Electro-Voice, Incorporated (the
"Borrower"), the several banks and other financial institutions from
time to time parties thereto (the "Lenders"), and The Chase Manhattan
Bank, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent").
Name of Assignor:
Name of Assignee:
Transfer Effective Date of Assignment:
Percentage of
Credit Assignor's Interest Principal Commitment
Facility in Credit Facility Amount Percentage
Assigned Assigned Assigned Assigned
__________.% $__________ __________.%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: _________________________ By: __________________________
Title: Title:
Accepted for recording in the Register: Consented To:
THE CHASE MANHATTAN BANK, as EV INTERNATIONAL, INC.
Administrative Agent
By: _________________________ By: __________________________
Title: Title:
314
2
DATED: ______________________ THE CHASE MANHATTAN BANK, as
Administrative Agent
By: __________________________
Title:
315
EXHIBIT I-1 TO
CREDIT AGREEMENT
FORM OF BORROWING CERTIFICATE
EV INTERNATIONAL, INC.
Pursuant to subsection 6.1(t) of the Credit Agreement, dated
as of February __, 1997 (the "Senior Secured Credit Agreement"; terms defined
therein being used herein as therein defined), among EV International, Inc., a
Delaware corporation formerly named Electro-Voice, Incorporated (the
"Borrower"), the several banks and other financial institutions from time to
time parties thereto (the "Lenders"), and The Chase Manhattan Bank, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), the Borrower hereby certifies that:
1. The representations and warranties of the Borrower set
forth in the Senior Secured Credit Agreement and each of the other Loan
Documents to which the Borrower is a party or which are contained in
any certificate furnished by or on behalf of the Borrower pursuant to
or in connection with the Senior Secured Credit Agreement or any of the
other Loan Documents are true and correct in all material respects on
and as of the date hereof with the same effect as if made on the date
hereof except for representations and warranties expressly stated to
relate to a specific earlier date, in which case such representations
and warranties are true and correct as of such earlier date; and
2. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to the Loans to
be made on the date hereof and/or the issuance of any Letters of Credit
to be issued on the date hereof.
IN WITNESS WHEREOF, the Borrower has caused this certificate
to be duly executed and delivered on its behalf as of the date set forth below.
EV INTERNATIONAL, INC.
By:_______________________________
Title:
Date: February __, 1997
316
EXHIBIT I-2 TO
CREDIT AGREEMENT
FORM OF
BORROWING BASE CERTIFICATE
Reference is made to the Credit Agreement, dated as of
February __, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Senior Secured Credit Agreement"), among Gulton Acquisition Corp., a
Delaware corporation, the several banks and other financial institutions from
time to time parties thereto (the "Lenders"), and The Chase Manhattan Bank, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"). Unless otherwise defined herein, capitalized terms which are used
herein shall have the meanings assigned thereto in the Senior Secured Credit
Agreement.
The undersigned, _________________, a ___________________ (a
Responsible Officer of the Borrower) does hereby certify that, as of the date
hereof, the Borrowing Base, as set forth on Schedule A hereto, is
$___________________ and no Default or Event of Default has occurred and is
continuing.
Pursuant to subsection 7.2(e) of the Senior Secured Credit
Agreement, the Borrower hereby certifies, and represents and warrants, that this
Borrowing Base Certificate and the attached Schedule A are true, correct and
complete in all material respects and that the amounts set forth in such
Schedule are in compliance in all material respects with the provisions of the
Senior Secured Credit Agreement. The Borrower acknowledges that the
Administrative Agent and Lenders are relying upon the information contained
herein and therein in making the Loans.
IN WITNESS WHEREOF, the undersigned has caused this Borrowing
Base Certificate to be executed and delivered as of this ____ day of
________________, 199__.
EV INTERNATIONAL, INC.
By:________________________________
Name:
Title:
317
SCHEDULE
EV INTERNATIONAL, INC.
SUMMARY OF BORROWING BASE RECEIVABLES
as of _____________ ____, 199__
ADVANCE BASE
DESCRIPTION RECEIVABLE RATE RECEIVABLE TOTALS
------------------------------------------------------------------------------------------------------------
Domestic
[Debtor Name] $ % $
$ % $__________ $__________
Foreign Syndication
[Debtor Name] $ % $
$ % $__________ $__________
Other
Domestic Syndication:
[Debtor Name] $ % $
$ % $__________ $__________
Foreign Syndication:
[Debtor Name] $ % $
$ % $__________ $__________
TOTAL BORROWING BASE $
==========
318
EXHIBIT J TO THE
CREDIT AGREEMENT
[Form of Landlord Waiver]
[UNDERSIGNED's NAME AND ADDRESS]
-----------, ----
VIA OVERNIGHT SERVICE
[LANDLORD NAME]
[LANDLORD ADDRESS]
[ADDRESS OF LEASED PREMISES]
Dear Landlord:
The undersigned, [COMPANY NAME], is the tenant of the
above-described property (the "Property").
We have arranged for financing from a group of banks led by
The Chase Manhattan Bank, as Administrative Agent. These banks have agreed to
make loans to us secured, among other things, by a lien on any furniture,
fixtures, equipment, leasehold improvements and inventory that is now or in the
future may be located at the Property (collectively, the "Personal Property"),
which loans may be modified, refinanced, extended or restructured, from time to
time. The Administrative Agent has asked that we notify you and request that you
agree to the terms of this letter by returning it to us in the enclosed
postage-paid envelope.
By signing this letter you agree that any lien of any kind and
any and all rights, including levy, execution, sale and distraint for unpaid
rents, that you may have or obtain on the Personal Property shall be junior to
the Administrative Agent's lien, and that prior to taking any action to enforce
any lien, you will give the Administrative Agent at least ten (10) business
days' prior notice of your intent to take action at the following address:
000
Xxx Xxxxx Xxxxxxxxx Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: _______________
Fax: (212) 972-____/0009
Tel: (212) 270-____
If we should default to the banks, you agree that in all circumstances the
Administrative Agent may have access to the Property for the purpose of removing
or selling the Personal Property, provided that the Administrative Agent agrees
to pay you for the reasonable cost of repair of any physical damage to the
Property caused by the Administrative Agent in connection with any removal or
sale.
Because these loans are important for the future of our
company and because the bank group and the Administrative Agent will be relying
on this letter, we would greatly appreciate it if you would sign the enclosed
copy of this letter and return it to me by _________ ___, ____, in the enclosed
envelope. If you have any questions, please feel free to contact ___________ at
(___) ___-____.
Thank you in advance for your cooperation.
Sincerely,
[COMPANY NAME]
By:___________________________
[Name, Title]
Acknowledged and agreed as of the date first above written:
[LANDLORD NAME]
By:________________________________
Name:
Title:
2
320
EXHIBIT K TO
CREDIT AGREEMENT
FORM OF SWING LINE PARTICIPATION CERTIFICATE
_________ __, 19__
[Name of Lender]
________________________
________________________
Ladies and Gentlemen:
Pursuant to subsection 2.5(d) of the Credit Agreement, dated
as of February __, 1997, among EV International, Inc., a Delaware corporation
formerly named Electro- Voice, Incorporated (the "Borrower"), the several banks
and other financial institutions from time to time parties thereto (the
"Lenders"), and The Chase Manhattan Bank, as administrative agent for the
Lenders, the undersigned hereby acknowledges receipt from you on the date hereof
of DOLLARS ($ ) as payment for a participating interest in the following Swing
Line Loan:
Date of Swing Line Loan:____________________________________
Principal Amount of Swing Line Loan:________________________
Very truly yours,
THE CHASE MANHATTAN BANK,
as Swing Line Lender
By:____________________________
Title:
321
EXHIBIT L TO
CREDIT AGREEMENT
FORM OF LOCKBOX AGREEMENT
LOCKBOX AGREEMENT, dated as of February __, 1997, among
_______________ (the "Lockbox Bank"), EV International, Inc., a Delaware
corporation formerly named Electro-Voice, Incorporated (the "Borrower") and THE
CHASE MANHATTAN BANK, a New York banking corporation ("Chase"), as
administrative agent (in such capacity, the "Administrative Agent") for the
several banks and other financial institutions (the "Lenders") from time to time
parties to the Credit Agreement, dated as of February 10, 1997, (the "Senior
Secured Credit Agreement"), among the Borrower, the Lenders and the
Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Senior Secured Credit Agreement, the
Lenders have severally agreed to make extensions of credit to the Borrower upon
the terms and subject to the conditions set forth therein;
WHEREAS, the Borrower has delivered to the Administrative Agent for
the benefit of the Secured Parties a Guarantee and Collateral Agreement, dated
as of February __, 1997 (as amended, supplemented, waived or otherwise modified
from time to time, the "Guarantee and Collateral Agreement"), pursuant to which
the Borrower has granted a security interest in all of its Collateral referred
to therein, including, without limitation, all Accounts of the Borrower; and
WHEREAS, as contemplated by subsection 8.18 of the Senior Secured
Credit Agreement and the Guarantee and Collateral Agreement, the Borrower has
agreed to establish a lockbox and depositary account system (the "Lockbox
System"), and to establish the bank accounts listed on Schedule 1 hereto with
the Lockbox Bank to be maintained by the Borrower in the name of the
Administrative Agent (the "Lockbox Accounts");
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Senior Secured Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower under the Senior Secured Credit Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used herein but not defined herein
shall have the meanings assigned to such terms in the Guarantee and Collateral
Agreement or the Senior Secured Credit Agreement, as the context requires.
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2
2. Lockbox Accounts. (a) In order to secure the performance by the
Borrower of the Obligations, this Lockbox Agreement is intended to create a
security interest in, and the Borrower hereby pledges to, and grants and creates
a security interest in favor of, the Administrative Agent for the benefit of the
Secured Parties, all of its right, title and interest in and to the Lockbox
Accounts, and all cash, Cash Equivalents, instruments, investments and other
securities at any time on deposit in the Lockbox Accounts, and all proceeds of
any of the foregoing. All cash, Cash Equivalents, instruments, investments and
securities at any time on deposit in the Lockbox Accounts shall constitute
collateral security for the payment by the Borrower of the Obligations and the
performance and observance by the Borrower of all the covenants and conditions
contained herein with respect to the Lockbox Accounts.
(b) The Lockbox Bank shall be the Administrative Agent's agent for
the purpose of holding and collecting all of the items from time to time on
deposit in the Lockbox Accounts and their proceeds. The Lockbox Accounts shall
be under the sole dominion and control of the Administrative Agent. Neither the
Borrower nor any person or entity claiming by, through or under the Borrower
(except the Administrative Agent), shall have any control over the use of, or
any right to withdraw any amount from, the Lockbox Accounts. The Lockbox Bank
shall be entitled to rely on, and shall act in accordance with, all instructions
given to it by the Administrative Agent with respect to the Lockbox Accounts.
3. Duties of the Lockbox Bank. If instructed by the Borrower or the
Administrative Agent, the Lockbox Bank shall:
(a) Rent one or more post office boxes in the name of the
Administrative Agent relating to the Lockbox Accounts. The Lockbox Bank
shall have exclusive and unrestricted access, and shall collect the mail
delivered, to such post office box or boxes (even though addressed to the
Borrower or the Administrative Agent) on each business day on which the
Lockbox Bank is open in accordance with the Lockbox Bank's regular
collection schedule. The Lockbox Bank shall give the Administrative Agent
and the Borrower notice of the address or addresses of the post office box
or boxes and shall instruct the Administrative Agent and the Borrower how
mail intended for the Lockbox Accounts should be addressed.
(b) Open all mail (even though addressed to the Borrower or the
Administrative Agent) and promptly endorse all items and remittances
received in such post office box or boxes and credit such items and
remittances to the Lockbox Accounts. All such items and remittances shall
be endorsed in substantially the following form:
"Credited without prejudice to Account No.____________. Absence of
Endorsement Guaranteed - '[Name of Bank]'."
(c) Maintain a record of each check, draft, note, xxxx of exchange,
money order, commercial paper or other security instrument or document
(collectively, the "checks"; individually, a "check"), included in the
Lockbox Accounts, in accordance
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with its customary procedures for acting as a "lock box" or similar bank.
This record shall be available for inspection by the Administrative Agent
and the Borrower.
.
(d) Checks returned unpaid because of uncollected or insufficient
funds shall be redeposited without advice; checks returned a second time
shall be charged to the appropriate Lockbox Account and mailed under
appropriate advice to the Borrower or, at any time after written notice by
the Administrative Agent of the occurrence and continuance of an Event of
Default, to the Administrative Agent. Undated checks may be dated by the
Lockbox Bank to agree with the postmark date and included in the regular
deposit. Checks incorrectly made out, where the amount specified in
figures and the written amount differ, are to be deposited for the written
amount only, except where the figure amount agrees with the total of the
remittance notice. Checks bearing no signature are to be deposited with
notification to the drawer bank requesting that the signature be obtained.
Third-party checks may be deposited into the appropriate Lockbox Account
if properly endorsed. Checks bearing the legend "Payment in Full" or words
of similar import, either typed or handwritten, shall be withheld from the
clearing system and sent to the Borrower or, at any time after written
notice by the Administrative Agent of the occurrence and continuance of an
Event of Default, to the Administrative Agent.
(e) Apply and credit to the appropriate Lockbox Account all wire
transfers directed to such Lockbox Account even though such wire transfers
may identify such Lockbox Account as an account of the Borrower.
4. Transfer of Funds. (a) On each day on which both a branch office
of the Lockbox Bank at which any Lockbox Account is being maintained and the
office of the Collateral Account Bank in ___________, ______ are open, the
Lockbox Bank shall transfer all funds on deposit in such Lockbox Account (after
such funds become available to the Lockbox Bank, either through the Federal
Reserve System or other clearing mechanism used by the Lockbox Bank) to the
Collateral Proceeds Account referred to in the Guarantee and Collateral
Agreement, maintained at such office of the Collateral Account Bank. Unless
otherwise directed by the Administrative Agent, such funds shall be transferred
by the Lockbox Bank through the Automated Clearing House and shall be identified
as follows:
[Collateral Proceeds For the account of
Account: [EV International, Inc.]
Name,
Account # Account #
and address]
(b) Except as otherwise provided in the Guarantee and Collateral
Agreement, (i) neither the Borrower nor any person or entity claiming by,
through or under the Borrower shall have any control over the use of, or any
right to withdraw from, the Collateral Proceeds Account and its proceeds; (ii)
the Administrative Agent shall hold such funds in the Collateral Proceeds
Account and shall have sole dominion and control over all of
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4
the items in the Collateral Proceeds Account and the proceeds thereof; and (iii)
the Administrative Agent shall have sole dominion and control over all interest
earned on the funds on deposit in the Collateral Proceeds Account and the
proceeds thereof, which interest shall be held on deposit in the Collateral
Proceeds Account and shall constitute collateral security for the payment by the
Borrower of the Obligations as described in Section 2(a) hereof.
(c) Notwithstanding the foregoing, the Borrower shall not deposit
any funds into any Lockbox Account or the Collateral Proceeds Account other than
proceeds of Collateral.
5. Indemnity. The Borrower hereby agrees to pay, indemnify and hold
the Lockbox Bank harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
reasonable legal fees) with respect to the performance of this Lockbox
Agreement, or any procedures agreement among the Lockbox Bank, the
Administrative Agent and the Borrower, by the Lockbox Bank or any of the Lockbox
Bank's directors, officers, agents or employees, unless arising from its or
their own gross negligence or willful misconduct. This Lockbox Agreement shall
not limit any limitation of liability afforded the Lockbox Bank under any
account agreement.
6. Fees and Expenses. The Borrower hereby agrees as follows:
(a) Fees and charges associated with the Lockbox Accounts shall from
time to time be mutually agreed upon by the Borrower and the Lockbox Bank.
(b) Reasonable Lockbox Bank expenses in connection with the
establishment and maintenance of the post office boxes rented pursuant to
this Lockbox Agreement shall also be included on the analysis statement.
7. Limitations on Liability of the Lockbox Bank. The Lockbox Bank
undertakes to perform such duties as are expressly set forth herein and such
other processing requirements as may be covered in any procedures agreement
among the Lockbox Bank, the Administrative Agent and the Borrower.
Notwithstanding any other provision of this Lockbox Agreement, it is agreed by
the parties hereto that the Lockbox Bank shall not be liable for any action
taken by it or any of its directors, officers, agents or employees in accordance
with this Lockbox Agreement except for its or their own gross negligence or
willful misconduct. In no event shall the Lockbox Bank be liable for losses or
delays resulting from force majeure, computer malfunctions, interruption of
communication facilities, labor difficulties or other causes beyond the Lockbox
Bank's reasonable control or for indirect, special or consequential damages.
8. Irrevocable Instructions. The Borrower acknowledges that the
agreements made by it and the authorizations granted in Sections 2, 3 and 4 are
irrevocable unless
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otherwise agreed to in writing by the Administrative Agent and are powers
coupled with an interest.
9. Account Information. The Lockbox Bank shall provide monthly
statements summarizing the activity of the Lockbox Accounts to the Borrower and,
upon request, to the Administrative Agent. In addition, the Lockbox Bank will
provide to the Administrative Agent and the Borrower copies of all information
reasonably requested by either of them.
10. Waiver of Right of Set-Off. The Lockbox Bank waives, until the
payment in full of the Loans, Reimbursement Obligations and other Obligations
then due and owing, the termination of the Revolving Credit Commitments and the
expiration of, termination of or return to the Issuing Lender of the Letters of
Credit, with respect to all of its existing and future claims against the
Borrower or any Affiliate thereof, all existing and future rights of set-off and
banker's liens against the Lockbox Accounts and all items (and proceeds thereof)
that come into its possession in connection with the Lockbox Accounts other than
as specifically granted under this Lockbox Agreement, provided that the Lockbox
Bank retains the right to charge any Lockbox Account for (i) all items deposited
in such Lockbox Account on or after the date hereof and subsequently returned to
the Lockbox Bank unpaid and (ii) for all past due compensation and expenses with
respect to the Lockbox Accounts as provided in Section 6 hereof.
11. Representations and Warranties. The Lockbox Bank represents and
warrants that:
(a) Only employees of the Lockbox Bank or its affiliates have access
to the post office box or boxes provided for herein.
(b) The Lockbox Accounts are the only accounts that have been or
will be maintained by the Lockbox Bank with respect to receivables of the
Borrower, other than bank accounts permitted to be maintained by
subsection 8.18 of the Senior Secured Credit Agreement.
12. Effectiveness; Integration; Amendments. This Lockbox Agreement
shall be effective as of the date first above written, and the Lockbox Bank
shall be in a position to process remittances as of that date. To the extent
that other agreements are inconsistent with this Lockbox Agreement, this Lockbox
Agreement shall supersede any other agreement relating to the matters referred
to herein, including any procedures agreement and any other agreement between
the Borrower and the Lockbox Bank relating to the collection of receivables of
the Borrower or its predecessors. Neither this Lockbox Agreement nor any
provisions hereof may be changed, amended, modified or waived orally, but only
by an instrument in writing signed by the parties hereto. Any provision of this
Lockbox Agreement which may prove unenforceable under any law or regulation
shall not affect the validity of any other provisions hereof.
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13. Termination. (a) This Lockbox Agreement shall automatically
terminate on the date of the payment in full of the Loans, Reimbursement
Obligations and other Obligations then due and owing, the termination of the
Revolving Credit Commitments and the expiration of, termination or return to the
Issuing Lender of the Letters of Credit. The Lockbox Bank shall be entitled to
rely on a certificate of the Administrative Agent to such effect. Upon such
termination, all amounts on deposit in any Lockbox Account shall be forwarded by
the Lockbox Bank by wire transfer of immediately available funds to an account
specified in writing by the Borrower.
(b) This Lockbox Agreement may be terminated by the Borrower (with
the consent of the Administrative Agent) or any other party hereto upon 60 days'
advance written notice to the other parties hereto.
(c) All rights of the Lockbox Bank under Sections 5, 6 and 7 hereof
shall survive termination of this Lockbox Agreement.
14. Notices. All notices, requests or other communications given to
the Borrower, the Administrative Agent or the Lockbox Bank shall be given in
writing (including facsimile transmission or similar writing) at the address or
facsimile number specified below:
Administrative Agent: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [ ]
Telecopy: (212) [ ]
Lockbox Bank: [Name of Bank]
[Address]
Attention:
Telecopy:
The Borrower: EV International, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: [ ]
Telecopy: (000) 000-0000
with a copy to: Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000
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Any party may change its address or facsimile number for notices hereunder by
notice to each other party hereunder. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or three days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when sent, confirmation of receipt received, provided that any notice,
request or demand to or upon the Administrative Agent or the other Secured
Parties shall not be effective until received.
15. Bankruptcy of the Borrower. In the event that a bankruptcy case
or receivership proceeding is commenced by or against the Borrower, the
Administrative Agent may pay the fees and charges of the Lockbox Bank payable by
the Borrower under this Lockbox Agreement from the date of commencement of such
case or proceeding until the earlier of the date of termination of this Lockbox
Agreement or the date of dismissal or termination of such case or proceeding to
the extent that such fees and charges are not being paid by the Borrower.
16. Relationship of the Parties. The relationship between the
Lockbox Bank and the Administrative Agent, as agent for the Secured Parties, is
and shall be construed to constitute the Lockbox Bank as an agent for the
benefit of the Administrative Agent and the other Secured Parties. The Lockbox
Bank agrees, for the benefit of the Administrative Agent and the other Secured
Parties, to act as custodian and bailee of the Administrative Agent and the
other Secured Parties in holding moneys and collections received pursuant hereto
pending their application in accordance herewith and acknowledges that such
moneys and collections are subject to the security interest granted to the
Administrative Agent by the Borrower under the Guarantee and Collateral
Agreement. It is intended that, by the Lockbox Bank's agreement pursuant to this
Section 16, the Administrative Agent, as secured party, shall be deemed to have
possession of such moneys and collections for purposes of Section 9-305 of the
Uniform Commercial Code of the State of New York.
17. GOVERNING LAW. EXCEPT TO THE EXTENT THAT THE
LAWS OF THE STATE IN WHICH THE LOCKBOX BANK IS LOCATED GOVERN THE LOCKBOX
ACCOUNT, THIS LOCKBOX AGREEMENT SHALL BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS THEREOF.
18. Counterparts. This Lockbox Agreement may be executed in any
number of counterparts which together shall constitute one and the same
instrument.
328
8
IN WITNESS WHEREOF, each of the parties hereto has caused this
Lockbox Agreement to be executed and delivered by its duly authorized officer as
of the date first set forth above.
[NAME OF BANK],
as Lockbox Bank
By:____________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:____________________________
Name:
Title:
EV INTERNATIONAL, INC.
By:________________________________
Name:
Title:
329
SCHEDULE 1 to the
Lockbox Agreement
LOCKBOX ACCOUNTS
